An odd occurrence took place this past week in the “Land of Unicorns” aka Silicon Valley. The first of what was once described as the “future of social media” canary’s Twitter™, was suddenly struck by the “Where’s The Money” kingdom aka Wall Street. Suddenly, what was once the dulcet tones for acquiring investment capital “eyeballs to monetize” is now being answered by the investment crowd in a much more sobering tone of “Where’s the monetized money?!”
This isn’t just some play on words. As I’ve stated over the years you’ll know that everything has changed when you see the first of these so-called “darlings of Wall St.” within the social media space called out on the carpet (i.e., investors will begin selling or dumping their shares) and their management teams will be pressured to either be; replaced, or the company sold, spun off, or any combination there of.
It’s a little bit ironic that the first would be fitting the proverbial “canary in the coal mine” analogy. Yet, although it’s the first, it’s going to be far from the last. For if awareness, with a reinvigorated quest for generating real profits are not followed immediately by others within this space – the enveloping hazards now forming around, and within the Valley are going to catch a whole lot of them flat-footed with the possibility for disastrous results. For there’s real tragedy beholding for a great many of today’s Unicorns around every bend. (or Quarter)
Many in Silicon Valley for the last 5 or 6 years have felt (as well as acted) with somewhat of a near invincibility not only for their enterprises, but also to the idea that their “social metrics” matter more than basic economics. i.e., Eyeballs trump actual net profits.
This was the storyline that worked when “free money” flowed via The Fed’s QE open spigot. However, since that source has now been closed? The only story line investors want to here is an answer to “where’s the money?” It’s a far cry from what Silicon Valley has come used to these last few years. And this narrative as well as tone is going to get a whole lot harsher, as well as quicker for anyone who forgot, or never went through the last dot-com bubble.
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