Bubbling Up at All Things Digital Conference

I wasn't able to attend Walt Mossberg's All Things Digital conference this year, but I've been watching the reports on the sessions.  Just yesterday, I was having a discussion with a colleague, who is just back east from Silicon Valley, about the whispers of a new "bubble" and then I read the account of Marc Andreessen's interview on the same subject.  Here's the line that caught my eye:

"If a very large number of people think there's a bubble, that makes us think there isn't  a bubble because a key characteristic of a bubble is that everyone thinks there is a bubble," he said."

I've read that quote three times and I'm still trying to puzzle it out. 

Here's how the reporter covering the speech explained Andreessen's view that he is not worried about a bubble:

"Andreessen, 39, who helped invent the Netscape browser and now runs venture capital firm Andreessen Horowitz with his partner Ben Horowitz, reasons that bubbles tend to be a psychological phenomenon. He says all the angst about a bubble is reassuring and that he only gets frightened when other people get euphoric."

Okay, I think that's a little less murky.  Not much, but a little.

Recognizing that Andreessen is an investor in LinkedIn explains his view a bit more, although he says that one company cannot create a bubble.  However, when pressed about the similar internet companies lining up to go public with anticipated huge valuations based on scant revenues, he didn't completely answer, but offered the following: 

"Take all of the later-stage companies, all of their theoretical valuations, add them all up and collectively the whole universe is still worth less than Google."

Then he made a statement that seemed, if not bubbly, a bit fizzy. Chalking up the failure of start-ups to bad timing, he said: "Almost every dot-com idea from 1999 that failed will succeed."

I guess when you've had the incredible early success of Andreessen and you've amassed a $1.3B venture fund for promising startups, you don't have to make perfect sense in interviews. 

I think my colleague's views, based on discussions with less heady VCs on the West Coast, about the potential risk of what they called a "bubblet" in the gaming and digital markets, makes a bit more sense to me.

I'll keep watching the coverage from D and other sources to see if the story gets any clearer.