When a bull market is new reality

As a startup insider, I hear a lot and read a lot about the “2nd decade” of an “unprecedented bull market”.

I also read about the gloom and doom from VCs with PTSD from 2001 and 2008, warning startups about “caught swimming naked when the tide goes out

Even a broken clock is right twice a day. There’s some kernel of truth here. But Billion dollar companies go bust even in the best of bull markets.

Why? Mismanagement, bad decisions, unsustainable growth, fraud, you name it. But not because the market didn’t exist.

Technology and the automation software brings with it is now mainstream. and global. Every business is a software business. Even hardware businesses are actually software businesses.

And that is a brand new reality that wasn’t true in 2001 and wasn’t true in 2008. Infrastructure investments, global bandwidth / spectrum allocations, increased throughput in networking, and just the power of smartphones brought over 70% of the worlds population online in the last 10 years.

And now that software is mainstream, startups are too. Angel investors who seek alpha in trends are lamenting that software startups are not “innovative” anymore.

Instead they either seek higher forms of primary technology — biotech, aerospace, AI, ML, core networking, neural nets, pharma, robotics..

Or they seek applications of core technologies to massive, trillion dollar industries — fintech, marketplaces, manufacturing, insurance, storage…

So when the inevitable “downturn” comes to stock markets, what will actually happen is more of a slow air release, than an abrupt bubble pop.

And the worst performers will always be left with their pants down.