Parallels between the dot com bubble bust and the silicon valley tech industry

In the late 1990s, companies such as theglobe.com were worth an immense amount of money despite not having a product with a viable business model. This bubble grew until it collapsed intensely in the start of the 21st century. In modern day silicon valley, we're starting to see similar trends. Apps such as SnapChat and Uber are becoming huge companies despite not delivering all that much. Uber, for example, reported losses of nearly 3 billion dollars in 2016, despite being valued at over 70 billion dollars [1]. SnapChat recently went public, valued at nearly 30 billion dollars at the peak of its IPO [2], yet has reported a net loss of 200 million dollars over the past two years [3]. Sure, SnapChat has advertisements and news now, but its real value remains to be its immense user base. Startups are often valued based on an estimate of $7 per user, which is incredibly high considering the difficulty of actually monetizing a user. For other startups, they are valued based on their growth, which is also an issue because simply growing doesn't make any money. In the case of Uber, growth actually costs an incredible amount of money, especially if it doesn't eventually lead to a sustainable business model. Although the bubble in silicon valley may not pop as dramatically as it did in the early 2000s, there is reason to believe that in the future startups may not find it as easy to be worth millions without any revenue.

[1]: https://www.bloomberg.com/news/articles/2016-12-20/uber-s-loss-exceeds-800-million-in-third-quarter-on-1-7-billion-in-net-revenue
[2]: https://www.theguardian.com/technology/2017/mar/02/snapchat-ipo-valuation-evan-spiegel-bobby-murphy-snap-inc
[3]: http://www.marketwatch.com/story/why-snapchat-is-losing-so-much-money-2017-02-08