Tech’s Winter is Coming: Terrible, Wonderful, Necessary

The write-down, over the past few weeks, of a few of the current crop of cocoa puff unicorns has set off the expected wave of lamentation about whether this signals the end of everything that is good.

As the hoary headed survivor of previous tech revolutions, I have to ratify the chill news: This puffed up party was never going to last. In fact, it is nearly over. The wine is running low. A cold sun lurks on the horizon.

Winter is coming. But, while it will be terrible, it will also be wonderful and utterly necessary. What we are seeing in the cooling of the unicorns is simply the natural course of tech revolution.

Tech revolutions, however large—and the current social/mobile revolution is certainly the largest, an epic change in human behavior—traverse common patterns.

In the beginning, remarkable new technological opportunities emerge. Then, almost immediately, a vanguard of innovators seize these capabilities and create initial experiences that latch onto the sensibilities of adventurous souls or those deeply disenfranchised by the status quo. Human behavior changes results.

Seeing this change, entrepreneurs and investors react in droves. Suddenly, it seems, any idea related to the revolution can get funded, find customers, seek its place in the sun. Where there were no companies related to the revolutionary capabilities just a short time back, now they can be found in the thousands.

Ideas abound. Dominant players emerge from nowhere. The press is bewitched and investors are besotted. Exuberance gets irrational. While this lasts, it feels like the good time will go on forever.

But it doesn’t last. It never lasts. And it won’t last now, either.

Read the full article on LinkedIn