Ride Baby, Ride

It's wild to look at tech company valuations and market cap. As a creative, technologist, and marketer who's bootstrapped his way through a number of deeply intellectually enriching career and entrepreneurial experiences, I can tell you first hand that industry analysts are great, if they actually "know of whence they speak" and do their homework. If they're just phoning it in and rehashing press releases or riding the thermals from blog heat, then buyer beware. Thermal updrafts cool, and everyone enjoys a good climb, but as a Colorado Mountain School climbing instructor once told me: 'Never scale a challenge without gear. Going up is fun. Coming back down can kill you.'

During the tech bubble of the 90's a number of folks asked me about what to buy into. I was a young field service engineer for a quickly growing system integrator at the time, so I was in businesses all over the place. I was often asked what new companies looked promising, what existing ones looked good. Since I was in the business of engineering entire business infrastructures for companies ranging from NPO's to public utilities, city governments and agencies, my mindset about what was hot, and what has legs was a bit different than the "buy sexy now" sentiment that seemed to be the order of the day. Sometimes what was hot had staying power, too, sometimes not. No legs to go the distance. My "buy and hold" methodology wasn't most satisfying for folks looking for a get rich quick thing, but it's not like flipping a house. Hell, these days, flipping a house isn't even like flipping a house used to be.

Over the intervening years, though, my predictions (and those of thousands of others fortunate enough to be able to separate the wheat for the chaff, so to speak) have stood the test of time. Apple market cap and high valuations pegged for pre-ipo companies like Facebook and Twitter might seem unnaturally high, but that's a market thing, not a reality thing. So ride it if you can stomach it. Don't gamble with your lunch money, and don't play if you're afraid to lose. And, IMHO, sink some money in what all the hot current tech companies need to consume to survive, and need to leverage to thrive.

When I was a kid, my best friend was coming into his first inheritances. His dad told him he should sock some away, spend a little - if he wanted, but only a little - and invest. We'd never heard of such a thing: "Invest". He told me his dad explained that that's when you put some of your money in a company in the hopes that you'll make even more money the more successful that company is at doing what they do. His advice to his son: 'think of things you like, know a lot about, or that everyone needs, wants, and/or uses.' What great advice to give a kid. Young imaginations run wild, but the clarity of youth is often more prescient (and more mature than the muddled befuddleness of many adults) than many are comfortable with admitting. Everyone uses toothpaste! Everyone needs a place to live! Kids love movies and bikes and toys! Needless to say, from the outset, he did very well for himself.

In today's seemingly irrationally exuberant tech market, all the kids love their toys. But how much time do they get to play with them? I bet they spend way more time with fundamental, elemental stuff that make up the commodities of their systems' consumption and others that present the greatest conundrums to their continued success. I'd place some eggs in those baskets, after all, everyone needs toothpaste and a place to live.

Posted via email from thinblog