When a forest fire burns down the bush woods, tall trees are left standing. This is the metaphor venture capitalists’ used in the Silicon Valley to explain why start-ups that were founded post-bubble, during the tech crash of 2001-2003 outperformed even the most established technology companies in the years that followed.
Google and Facebook both reached critical mass during technology downturns. Paypal and Skype both had sizable exits in a recession.
Silicon Valley’s vibrant ecosystem of intellectual property, venture capital and talent pool helped spawn these start-ups like no other region could. Good business plans found early-stage capital, albeit at modest valuations, while frivolous business plans died a slow, painful death. Brainy, engineering graduates joined unknown start-ups for stock options in lieu of staple career choices like banking and consulting. Some worked. Many failed. The net effect was extremely positive for the region and the entire United States.
To read the full, original article click on this link: Dubai’s evolution from exuberance to entrepreneurship
Author: Kartik Ram
