Empires, tech bubbles, and other stuff I didn’t plan to write about
Before I was a business nerd or a tech junkie, I was a huge history buff. The latest issue of Foreign Policy was standard bathroom reading, I consumed political narratives like a fat kid eating comic books (my favorite: the Peloponnesian War), and aspired to become Jared Diamond.
But there was always one observation from my time as a history buff that glued itself to the back of my head: History is reciprocal — an extension of the magical & immutable fact that there is a “certain underlying order” (Stephen Hawking, A Brief History of Time) to the significant events & movements of human history. It might be a story you’ve heard before - that history repeats itself - but that’s not exactly true. History is not repetitive, but it does tend towards parallels. Similar actions result in similar reactions… Empires rise, expand, overreach, self-destruct & so it goes. Thus, whenever I get an opportunity to apply a historian’s eye to emerging technology trends, I jump on it, and lately there have been plenty.
Obligatory mention of the B-word
The one that’s gotten the most attention, by far, is the comparison of today’s technology boom with the irrational exuberance of the ’90s dot-com bubble. To be honest, the question of whether we’re in a bubble is uninteresting to me. My thoughts on this issue are similar to those of most venture capitalists (here, here, and here): We have a decent sample of data points in history for identifying & tracking bubbles, and today’s tech industry is on its way there… but not for 2-3 years.

Image: 4 phases of a bubble
Tech valuations in the public markets are actually priced at historical lows, relative to earnings, implying that overall risk-taking & speculation are below saturation levels (actually, the fact that we can even talk about earnings would be a decent argument for this not being another tech bubble). In the private markets, there are certainly examples of overly-optimistic valuations at the seed and Series A stages, but I view those as the growing pains of an early-stage funding ecosystem that’s trying to become more institutionalized via angel investors turned VCs & a surplus of startup incubators/accelerators, rather than an overall divorce from reality.
But for me, the most convincing piece of evidence against a bubble is the immense gap in the technological capabilities of our private lives versus our professional ones. Using my smartphone, I can access relevant, real-time data about markets, customers & current events, faster and easier than I would working at 99% of Fortune 500 companies where I’d run into any number of problems like system redundancy, bureaucracy, poor information-sharing, etc. With a $500 laptop, anyone can power a full-grown online business from the cloud, at processing speeds & scale similar to any big corporate player.
Some would observe & proclaim this newly even playing field between individuals and corporations a “new paradigm (!!!),” but I believe it’s inevitable that enterprises will figure out how to leverage Web 2.0/3.0 technologies to re-shape big business & restore their competitive advantage. And when they do, our high expectations of today’s tech industry will finally play out. Will there be a bubble before or after that moment? Well, as we know from history, pretty things tend to rise & fall like empires — I expect nothing less this time around.