Bubble-icious here in NYC
Went to a Tech Meetup here in New York City. I have to admit it was fun but a bit disconcerting, reminding me of our famous bubble from 8 years ago. You might suspect that the coming layoffs on Wall Street (carnage) would take away some of the froth. But it looks like the local correction hasn’t affected the tech sector yet. There were plenty of people talking about ideas that are applications, not businesses. Where are the unfair advantage that professional investors look for? Where are the network effects? What is the market space and what is the big picture growth story? Just because an app scratches an itch (many do) doesn’t mean it needs to have a team around it. Yes, there is a new-media/tech industry here, but it has more substance out in Silicon Valley.
The best time to be in an industry is really when others are (unreasonably) down on it. This means that talent is available and at fair cost. We have the opposite problem right now in new media (and have had it for the last 2 years). We’ll hit that sustained downturn in real estate in the next year, and that will provide savvy investors with good opportunities. I wouldn’t be surprised if the same thing happens in the tech industry with a decline in AdSense revenues and CPMs, hitting us in a year’s time.