Megatrend Crosscurrents

It is an exciting time to be an entrpreneur and an investor in tech startups. The history of tech investing is a series of waves or megatrends that come one after another. Mainframes to minicomputers to PCs to client server to Internet, for example. But right now we are in the midst of a number of these megatrends all happening at the same time. There are at least four big ones going on at the same time:

– Mobile – yesterday I wrote that at least 16% of the visits to this blog are coming from mobile devices and that number is up from essentially zero six quarters ago

– Social – Facebook will have 1bn users in the next year or so

– Cloud – A third of Netflix' new subscribers are opting for the streaming only plan

– Global – companies like Skype, Facebook, Twitter, Google see upwards of 80% of their users from outside the US and these numbers are growing faster than ever

Each one of these megatrends would be an investable wave on its own. But we are in an environment when all four are crashing on the shore ata the same time. Twitter, for example, is mobile and social and global. It is the world in your pocket. And it is changing the world too.

All of this is happening in the context of a very frothy investment climate. Investors are acutely aware that this is a time of great opportunity in tech investing. Capital has come gushing into the venture capital and startup sector. Maybe it is appropriate given all the opportunity. Or maybe it is irrational exuberance. But as my friend Tom Evslin says, "nothing great has ever been built without irrational exuberance."

Investing in the midst of these megatrend crosscurrents is both exciting and challenging. And I certainly wouldn't want it any other way.