For those who didn’t live through those heady times, the "Dot Com" days created the Internet Bubble that grew through the 1990s and peaked in March of 2000. I can’t begin to describe the mania of those times - a friend of mine in Silicon Valley said, “Venture capital-backed companies keep telling me they have to find ways to crank up their ‘burn rate’ to impress investors.”
Think about what he was saying: technology start-ups were looking for ways to waste money in order to create the impression they were more valuable than they really were so that they would get more money for company shares in their next round of VC investment.
Today, we have an improving economy, a stellar stock market and employment is growing. For example, there is a company in Atlanta with two job openings for computer programmers requiring only one or two years of experience in a specialized programming language; however, they can’t find anyone qualified for the job for less than $120,000 a year!
Perhaps the greatest indicator we are in the “Dot Com” days again is the astronomical valuations for venture capital-backed technology companies with no profits or even an idea WHEN they will be profitable.
So what does this mean for 2015? What can we expect to happen?
I had expected 2014 to be bigger and better than it was. The 1990s were driven by the rise of the Internet and the benefits of connectivity between all kinds of computers. The current frenzy is driven by mobile-based smartphone/tablet technology and the benefits of having “anything, anytime, anywhere” power 24 hours a day, seven days a week. Whether it’s depositing a check, making a payment or financing a car, some millennials simply won’t turn to a traditional financial institution if what they want can’t be done on their smartphone.
This has resulted in the rise of the alternative financial options we are seeing today, from PayPal to pre-paid cards and everything in-between. A friend said, “My daughter thinks PayPal is a bank.” To her, and a lot of folks, there isn’t a great deal of difference.
Many but not all of the existing financial technology infrastructures will be severely disrupted by new, mobile-based solutions that benefit consumers and the companies that create them. I believe we are looking at four more years of sustained growth at a minimum. We are only at the beginning of the mobile-based revolution and all of the benefits a “mobile first” eco-system will bring to society. We will continue to see the power of smartphones and the positive changes this revolution is bringing to us all.