In 1990s, we had a generally upbeat economic environment around the country and there was a sense of naive optimism around the internet. Then came the gold rush and later the malfeasance. Right now we have a country that is facing an unending economic uncertainty, especially for a large swathe of people. As a result, the Bay Area stands out and finds itself living under a microscope. There is no naive optimism; just gross entitlement and that is what’s wrong.
Our industry has boom and bust cycles that are much faster that any other industry and at the same time have unsaid but distinct barriers to entry. The internet-speed cycles lead to many more startups and more people becoming millionaires faster and at a much younger age than any other industry — even the older version of the internet industry. We also forget that the same speed which thrills, also kills. The recent retrenchment of technology stocks is a good reminder that the craziness doesn’t get to mania levels anymore.
This bubble is similar to real estate brokers offering agents 120% splits.