What’s in your basket?
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If there's anything Silicon Valley is good at, it's staying on message. We've seen it with recent attempts to reframe a Wall Street Journal investigation into the biotech company Theranos as an attack on innovation, and now, a similar strategy appears to be afoot to defend tech companies against fears of a bubble.
Earlier today at the Fortune Global Summit, venture capitalist Marc Andreessen was asked whether unicorns (the pet name for companies deemed to be worth a billion dollars or more by their investors) are over-valued.
"Oh, I don't think we're in a bubble, I think we're in a bust," Andreessen shot back. That response is exactly what Y Combinator president Sam Altman wrote in a blog post yesterday entitled The Tech Bust of 2015. "Maybe instead of a tech bubble, we're in a tech bust," Altman argued.
"Bust" is a catchier framing for a point investors have been trying to emphasize: That the upside of technological disruption is so enormous that even if the next few years leaves a unicorn graveyard in its wake, tech companies are still undervalued by the public market.
I think technology has been under-valued ever since 2000 and it's still under-valued. So the nature of venture capital and the nature of venture investments is that some companies are going to work and some companies aren't ...The entire basket of unicorns is worth like half of Microsoft — like the entire basket of all the unicorns. Microsoft is a fine company, but you need a couple to really take off and it becomes very clear that retrospectively they're under-valued.
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