This week’s Economist cover story, “A New Tech Bubble,” has people abuzz once again about how Silicon Valley is ripe for another fall. According to the article, irrational exuberance has gripped tech industry investors, and it’s only a matter of time before the general public is left holding the check, just like they did in 2001.
But the latest bubble warnings seem to be missing the mark. Are some Internet companies over-hyped and over-funded? Absolutely. But let’s not throw the baby out with the bathwater by making generalizations about the entire industry based on a few flashy examples. I’d argue that the silent majority of businesses and investors in Silicon Valley are much more responsible than they get credit for. For every headline-grabbing Webvan 2.0, there is at least one current startup running a real business by providing a real service. Overall, a healthy amount of the companies that make up the web scene today are built to last.