Tech Bubble or Golden Age? (8VC)

Summary

• The authors argue that the private technology ecosystem is not in a tech bubble, and that the era is the early innings of a Golden Age of the information technology revolution.§1
• Following Carlota Perez, technological revolutions follow a pattern of eruption, speculative frenzy, collapse, a Golden Age, and a maturity phase.§1
• In 2000, before the iPhone came to market, there were only 50 million people on the web, versus 3 billion online today.§2
• Cloud providers and big data analytics let organizations process hundreds of millions of data points in seconds.§2
• The next generation of Smart Enterprise companies will create network effects by concentrating anonymized data across an industry.§3
• The most compelling opportunities will increasingly be scaling-phase platform ventures that raise large amounts of capital and grow at high rates for years.§3

Key insights

1. The money involved in startup experimentation is a tiny fraction of total economic output.§1
2. The smartphone is one of the inventions that has compounded the growth of the Internet era over the last 16 years.§2
3. The vast majority of the economy has yet to be transformed by the IT revolution.§3
4. Progress in deep learning, neural nets, and AI will oust more and more human middleware.§3
5. A layer of human decision-making in core business processes will remain necessary for the foreseeable future.§3