Are We in a New Tech Bubble?

CDM Media’s Senior Director of Content & C-Suite Communities, James Quin is regularly cited in various media stories across a variety of industries. But leading up to these article inclusions are many conversations and insightful commentaries which don’t always make the publication. In this weekly (or more!) new section, James shares his responses to a myriad of tech topics he discusses with journalists. 

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VC investment exceeds $17 billion for the first time since Q4 2000, says the National VC Association. Are we entering a new bubble? Are investors funding too many firms with no real chance of succeeding? Is there any reason for caution? And are the things that went wrong in 2001 possible today? During an interview for Computerworld, James Quin had this to say:

On the surface it may look like we are in a new bubble given the volume of investment, but I think that if we look under the covers, we can see that this likely isn’t the case. For one, investors have gotten much smarter about the hit rate of their investments – they understand the math, diversify portfolios, and structure investment in a series of tiers. All of this serves to minimize the risk while maintaining a high level of investment.

The second factor that we need to consider is technology maturity. Back in 2000-2001 the Internet really was still pretty nascent as a business platform – it showed great promise but no one really understand how to monetize it because everyone was still pretty early-phase in terms of technology pervading everything. That’s not the case today. Start-ups may be bringing new technologies and new capabilities that leverage existing technologies to bear, but we’ve all become way more advanced in terms of our understanding and appreciation of technology. As a result we can find winners and losers more quickly, strengthening the impact of the former while minimizing the impact of the latter.

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