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2008 anti-prediction ;-)

Greg Linden writes in a recent blog about his one prediction for 2008: The coming 2008 dot-com crash.

Early January is the time we see many predictions for 2008. I have not played this game since 2006, but I want to chime in this year.

I am only going to make one prediction, but one with broad impact. We will see a dot-com crash in 2008. It will be more prolonged and deeper than the crash of 2000.

I love it ;-) Yet, I’m much more optimistic about the coming year.

So I think things will continue at the pace they are, and even pick up, at least until late 2009 to 2010. Here’s my reasoning:

  • The "broader" economy and investors have not been investing as bubbliciously as in the late 90s
  • As long as there are big exits from tech startups, investor interest will only grow – this will cause the late majority and laggards (as far as investors, press, etc.) to get excited about the tech economy, and then throw money at the situation
  • As there are good companies out there with real revenues, when these companies exit, it will continue an upwards trend in interest. For example, if the tech industry started a slump but then Facebook exited, wouldn’t it only cause renewed interest?
  • HOWEVER, as these good companies exit, then all there’ll be left is bad startups (at least percentage-wise) – thus causing more bubble-like trends to occur

The question then, is how many good companies are left in the ecosystem, and how long will it take before they exit? As long as there’s a stream of exits, I think everyone will be happy.

Based on what I’ve seen out in the SF tech scene, there are at least a dozen or more startups with revenues beyond $10MM, growing at a significant rate. And IMHO, their revenues are coming from sources that are not likely to crash in 2008. A large percentage of these will take 2-3 years to exit, and beyond that, bubble conditions might be ripe – but not before then ;-)

What do you guys think??

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