Technology Booms and Busts

Let’s look at the differences between when technology is in a boom-cycle vs. a bust-cycle, and what happens as things transition between cycles. 

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SHOW NOTES:

HOW CAN WE TELL WHAT CYCLE WE’RE IN? 

• Right now, it feels like we’re in a bust cycle, or at least a correction-cycle, but how do we know what cycle we’re currently in - and more importantly - how do we know when the next cycle will begin?

THE GOOD TIMES, THE UNCERTAIN TIMES, AND THE BAD TIMES

• History repeats itself, hence why it’s good to study history. 
• Follow the money. Is money cheap? Is money highly leveraged? What is motivating the money?
• Does it make sense to a layperson? 
• Can the technology create a sustainable business model? Does it create an expanding ecosystem, or winner-takes-all?
• Do the stories highlight the people, or the excesses of the people, or do they highlight value-creation? Stories are bolder in a boom. 
• Booms will start slow, will gain word of mouth, will sustain for a while, will begin to reach, and then crash hard. People are never quite sure when to jump into a boom. Reactions are faster in a crash. 
• Crashes happen quickly, as they are usually highly leveraged. 
• The winners in a crash are the ones with money to buy low, or are capitalized after a crash. 

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