Mark Suster has had one of the best insights into the changing landscape of the venture capital industry I've ever seen: Amazon's technology platforms made it really cheap to build a tech company, and that changes everything: I still think it was Amazon that created this category not the other way around. Where open-source computing gave us a 90% reduction in our software, Amazon gave us a 90% reduction in our total operating costs. Amazon allowed 22-year-old tech developers to launch companies without even raising capital. Amazon sped up the pace of innovation because in addition to not having to raise capital to start I also didn’t need to wait for hosting to be set up, servers to arrive, software to be provisioned.
Are we in the incipient phase of a new tech bubble? Steve Blank and Ben Horowitz debate the issue in the Economist. Big IPOs, big early stage valuations, tight labor in Silicon Valley point toward yes, but if the valuations are still anchored to reality, that points to no. It's good that the question is getting asked and talked about this time around.
