Dare I use the “B” Word

mcrock dec 30 2020 dare i use the b word

It is the end of December and the weather is grey. I look out the window from my makeshift home office with a green screen behind me and a big bright light in front of me while I type on my laptop which sits on my homemade games table of cribbage, backgammon, and checkers. Who would have thought that this is how many of us would be ending 2020…nine months of lockdown and still counting?

We all knew there had to be a global market correction because the world has been on a tear. Our investors had been cautioning us since 2017 but no one would have guessed it would be a pandemic that would reshape how we live, work and play. Did I actually write “play”?

At the beginning of the pandemic, I thought the irrational hype of tech would subside like it did in the two previous recessions I had lived through as an adult. I could not have been more wrong. The irrational hype of tech has only accelerated.

Competition for deals was higher than I have ever witnessed in my career. Entrepreneurs, especially in California, had more swagger and ego than before, which I thought was incomprehensible.  

Valuations soared. It has been the year of irrational exuberance on steroids for the tech sector.

But the question I keep asking myself is whether it is a “B”ubble or a new era of how we use tech to live, work and stay connected? There…I cut out the word “play”.   

I believe the world will continue on its torrent path of using tech. I also believe the longer this pandemic lasts, the more entrenched and reliant we will be on tech to remotely monitor, manage, and control our operations. It is not to say that we will never be there in-person, but this pandemic is providing us with software alternatives that help us operate better and keep production up, even from afar. 

I believe the acquisition of tech companies will soar in 2021 and it will be known as the year of acquisitions. This will not just be the acquisition of tech companies but the acquisition of many large super incumbents in traditional businesses. The reshaping and reemergence of companies and industries will be fascinating. 

Many are predicting that the 2020’s will be the liveliest decade of our lives. This prediction comes from examining the decade after the Spanish Flu subsided. The roaring 1920’s was a decade to live large and unabated. This was arguably the decade where real risk taking emerged in the Industrial Era.

I do not believe we will be living lively in 2021 or even 2022 but I do believe what we do in the next few years is setting the stage to live lively for the remainder of the decade. The race is on and what we are witnessing is an acceleration and reshaping of economies and markets. In other words, this is not a bubble. We are entering an accelerated Digital Era that is impacting every industry on earth.

Author: Whitney Rockley, Co-Founder & Managing Partner of McRock Capital