Salesforce CEO Marc Benioff says Mark Cuban is wrong: There's no bubble
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Cuban has been one of the most vocal investors warning against a tech bubble, even penning a blog post titled, "Why this tech bubble is worse than the tech bubble of 2000."
He basically says there's too much investment being made in the private market - as opposed to the 2000s when it was done in the public market - thus creating no liquidity for the investors.
But when asked about Cuban's assertion during a CNN interview, Benioff simply shrugged it off, saying, "I'm not [on the same page]...I don't think there's a bubble. I think there's a huge amount of innovation in Silicon Valley that's getting monetized."
Benioff says the highly valued startups now are generating real revenue under a strong business model. The biggest knock on the startups from the early 2000s was that they failed to generate any meaningful revenue, merely relying on vague web traffic metrics to justify its high valuations. By contrast, Benioff said companies like Uber, Dropbox, and Airbnb are solid businesses generating real money. "These are real companies with very significant revenue streams," he said.
Benioff's comments are in line with what many tech entrepreneurs and investors have been saying. For example, Slack's CEO Stewart Butterfield told us in a previous interview, "If you look at Uber, Airbnb, or Dropbox, they're growing revenue way faster than anyone has historically, in a matter of years versus decades."
Andreessen Horowitz, a top venture capital firm, recently published a slide deck that illustrates this point even further. It says the internet market size and people spending money online is significantly bigger than in the past. Plus, it says even though public tech stock price is growing significantly fast, its P/E multiples, a common metric to gauge how overpriced its shares are, have remained pretty stable. Rather, it's the actual earnings that's driving the tech market growth, it says.
Andreessen Horowitz
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