I wish more of your colleagues in journalism covered technology businesses with this appropriately critical tone. A business is a business. I don't see why technology companies deserve different yardsticks to rate their viability. A completely admiring technology/business journalism scene and outright fanboyism/fangirlism on the sell side have been key enablers to what you correctly identified as a bubble in the sector that's been a long time building. Where else would you see something that is decades away from even generating a single dollar in profitability like fully autonomous cars hoover up hundreds of billions in funding? If that isn't a sign this has gone too far I don't know what is.

Companies in industries as different as cars (Tesla), to media (Netflix), to meal kits (Blue Apron) are treated as technology companies because they use similar business models and attract similar investor bases. Most are massive incinerators of capital and perpetually lose money to deliver the "growth" that the idiots who cover them on wall street covet. The truth is that most companies in most industries could grow at insanely fast rates if they were allowed sustain massive losses to do so (eg Shale Oil). It is only in technology, however, where this is considered acceptable indefinitely. Their main product is not their car/movie/app but their stock. The entire ecosystem that supports them, from the journalists driving hype cycles in exchange for access, to the VCs inflating valuations every funding round to book paper gains, to the bank analysts inventing new non financial metrics to justify ridiculous price targets all constitute a major systemic failing. When your business model is to constantly invent narratives to drive up equity valuations to keep investor capital coming in, your business is really just an elaborate, legal pyramid scheme. The VCs get out at IPO and the gullible sheep herded by the media/analyst/fund manager ecosystem take over funding the ever expanding bubble. When it pops as it certainly will, there will be systemic damage to the economy because of the amount of investor capital at risk in unprofitable companies that have never deserved the money the equity markets have thrown at them in the past decade.

alphaisbeta

https://www.ft.com/content/43d5e972-2098-11e9-b2f7-97e4dbd3580d

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