Editor’s note: Bob Ackerman is managing director and founder of Allegis Capital and a leading expert in cybersecurity and data analytics. He sits on the boards of Apprion, DriverSide, Purewave and Shape Security.
As we enter a new year, innovation is advancing across a broad front — mobile, data analytics, virtualization, security, the sharing economy, payment systems and more. That’s the good news.
Here’s the not-so-good news. As in the period leading up to the dot-com bust in the late ’90s, enthusiasm for technology startups is running ahead of their reasonable prospects. We are, as Alan Greenspan said in 1996, in a time of irrational exuberance. The rapidly increasing valuations placed on a wide variety of private companies show that future expectations have once again come untethered from present performance.
Your broker may tell you that prior performance is not indicative of future results but historians know different. The past does indeed repeat itself and the specter of the collapse of the year 2000 is in the air. Or, as Yogi Berra said, it’s déjà vu all over again. The correction will probably not be as significant as 2000 given the qualitative differences in many of today’s startups, but gravity is immutable and omnipresent – and the startup community is on a path to re-learning some of the past lessons.
TechCrunch post on