A positive spin on all this market turmoil, and the “Unicorn” phenomenon, by Miguel Helft at Forbes. I absolutely agree that this is not a bubble. Of course, it depends on how you define “bubble”. But it’s clear what is occurring now with these super high valuations is altogether different to what happened in 1999 with the “no-revenue dot-com” tech bubble. Miguel writes:

But a bubble implies a systemic problem and an existential danger, and when you view these high-growth startups as a long-term portfolio, that’s simply not the case. Taken as a whole, the 93 firms based in the U.S. (Americorns?) are worth $322 billion, 14% less than Microsoft and a bit more than Intel and Cisco combined. Which would you rather own long term? Microsoft or a basket that includes Uber, Airbnb, Snapchat and Pinterest along with scores of others, a few of which will surely emerge as future PayPals, Twitters or Fitbits? Is that even a hard decision? And if not, what are we worried about? Quite the contrary: If you’re looking for growth, the unicorns minted in the last few years may well be one of the most attractive investments anywhere.

He goes on to emphasize that the majority of these Tech 2.0 companies are stronger, financially healthier, and sporting sustainable business models generating revenues that are not easily derailed:

But even a selective correction won’t trigger an across-the-board crash. Not a chance. Too many unicorns have proven they have growing, sustainable businesses. Despite the lackluster IPOs of Box, New Relic and Pure Storage, these are not dot-com-crash disappointments–merely healthy companies that were a bit overvalued. They’re not about to fail and could still soar past their IPO prices in a year or two (remember Facebook?). And even if investors get spooked and decide to stop lavishing cash on unicorns, most companies have the balance sheets and wherewithal to survive long winters. There might be some belt-tightening and some painful layoffs but not a sudden pop.

A voice of reason, and a reminder that cooler heads are required to properly think things over. The only thing the article missed, in my opinion, is the real risk these companies face. It’s the very thing that made them “overnight” sensations: the speed and ease at which a competitor can build a disruptive business is also unequalled. It wouldn’t take that much to build a better mouse trap if these unicorns are not careful. Of course, they have so much money that they can just buy their competition before they become a real threat (e.g. Facebook buying Instagram). But the risk lingers in the shadows…

To read the full article, go here.