Analysis

Signs the boom is entering the 3rd quarter

3rd-quater-graph

The tech industry cycles very predictably, and somehow it always feels as if it’s for the first time.  Very refreshing in a way.  Eating lunch at the picnic table in the office, we were talking about what would be some signs that the tech boom is getting into the 3rd quarter…

1) high number of new G.P.’s being hired at VC firms, just in time for their investments to crater in 3 years.
2) more people with British accents around Silicon Valley
3) increasingly attractive people, both men and women, around Silicon Valley
4) VC’s you’ve never heard of, backing companies you think, eh? What the hell is that?
5) new HBS grads joining startups
6) guys in their late 20’s breaking up with their girlfriends rather than getting married and getting distracted from work
7) married couples delaying having babies so they can focus on work
8) pretty large and pretty swanky company parties
9) oversized marketing departments
10) PR companies growing
11)  decoupling of earnings from valuations (e.g. Aqantive, You Tube)

Another thought we had was that if a viable business model emerges for YouTube, justifying the acquisition cost and calming the IP lawsuits, the boom might extend because the markets might assume it means that the ad dollars from TV will continue to migrate online, and perhaps subsequently, the online companies could inherit the viewership from the TV companies, NBC, ABC, etc.  If a good business model cannot be found for YouTube… then maybe the party in our little corner of the IT world will end more or less on schedule in 18-24 months.

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