Biggest difference between now at 2000 is companies have real customers and revenue. 2000 was a completely different beast and conditions that set that off aren't anywhere close. Doesn't mean it can't get bad but 2000 is not the place to look for a playbook.
- In 2000, people were talking about the future being about outsourcing engineering work to lower cost-of-living countries. To some extent that's happened, but companies also see tech as integral to their survival and have realized that their core engineering teams need to be in the same time-zone.
- In 2000, tech was for tech companies. Now, every large bank has a huge technology team. Every company in logistics has a large tech team. Every retailer needs good engineers. In 2000, there were a few niche websites online. Now, a strong online presence is essential even for stores like Home Depot.
There's no question that the market was overheated, but it's too early to call doom here. The NASDAQ is still up about 50% from where it was 3 years ago, before COVID, even after the recent drop. That's a 14% yearly average return... still a crazy amount. At it's peak, it was up over 100% from May 24, 2019... a level that just wasn't sustainable.
This is true. The biggest issue imho is people expecting their comp to be unimpacted. A company like DoorDash or Uber has a ton of revenue, for sure, Uber just loses a ton every quarter. They won’t go out of business but they may drop another 90+% in value from here.
Some companies can certainly justify their frothy valuations, and a bunch certainly don't. Many of these companies need the capital infusions to stay afloat, and I can see a bunch folding as capital market risk tolerances start to contract.
