8/4/2011 4:09:00 PM
Since most of Tensoft’s customers are technology companies - and because we’re a technology company ourselves - we follow news about the tech industry with a great deal of interest. The past year has seen a significant bump in tech IPOs, accompanied by a great deal of speculation about whether or not this presages another dot-com bubble. Rampant overvaluation heads the list of the symptoms cited most often, although there are plenty of other voices arguing that the recent tech IPOs are companies with solid businesses, not Webvan or Pets.com.
Thanks to this infographic by KISSmetrics and FeeFighters, it’s a little easier to see what’s been happening and how it looks compared to the dot-com bubble in the late 90’s. And, thanks, The Atlantic’s Associate Editor Nicholas Jackson, you don’t even need to sort through the data – he’s provided a pretty concise analysis, which I’ll quote herein full:
- Although it may seem that recently (2009-2011) startups haven't had problems raising capital, the level of venture investment currently pales in comparison to levels during the .com bubble. A lot of people are talking about an early stage bubble, but even in early stage deals, we're nowhere near the .com bubble.
- Even with the seemingly high number of recent tech IPOs, historical data suggests that the number of current tech IPOs is drastically smaller than during the .com bubble.
- When most people think of the .com bubble of the '90s, they think of the giant run-up in tech stocks. The pace at which the Nasdaq 100 index shot up (10x in four years) was impressive and every individual investor wanted a piece of the action. Fortunately, we don't seem to be approaching the craziness of that time.
- Today, tech companies have access to a relatively large pool of potential customers -- something that the tech companies of the .com bubble didn't have. In 2010, there were 10 times the number of Internet users there were in 2000. The current number of active Facebook users is equal to the number of total Internet users there were in 2002. (from “Infographic: Are We in the Middle of Another Tech Bubble?,” Nicholas Jackson, The Atlantic, 7/19/11).
What do you think?