We need to talk about startups…

We’re partying like it’s 1999 all over again.

“Man, Kevin Systrom really fucked up selling Instagram for a billion.” I was at SFO, about to fly home after a couple days in San Francisco, and couldn’t help but overhear the guy behind me talking loudly to his nodding friend. There’s a weird phenomenon happening right now in tech: a billion dollars just doesn’t seem like a lot of money anymore. A couple years ago, our collective jaws would drop when a startup got acquired for $25 million. Now, people don’t even bat an eye until well into the billions.

Maybe a billion really is the new million. After all, the world is changing at an accelerating pace. The internet and mobile computing have taken hold, and it seems like a new era of exponential growth has arrived. Every day, entrepreneurs are unseating taxi czars and hotel magnates using little more than smart phones and a healthy disregard for the rules. In this crazy new world, it seems like just about anyone can build the next billion-dollar startup, whether it’s Uber for dry cleaning, or AirBnB for dogs.

If this seems strangely familiar, that’s because it is. In 1999, at the height of the dot com bubble, there were billion dollar IPOs and acquisitions happening weekly, often of startup companies with non-existent business models based on “eyeballs” or “stickiness”. Who can forget Yahoo’s bonehead acquisitions of Geocities for $3.57 billion, and Broadcast.com for $5.7 billion? Or food delivery startup WebVan, which with just $5 million in revenue and negative margins, went public and achieved a market cap of over $8 billion before floundering and declaring bankruptcy just two years later.

This time it’s a little different. Most of these companies have some revenue. Some even have a little profit. Fewer companies are rushing to IPO, and instead staying private for longer. But in many ways, it’s starting to feel like we’re partying like it’s 1999. We may not be there yet, and it may not take the same form, but something is most certainly brewing. As Mark Twain once said, “history doesn’t repeat itself, but it does rhyme”.