What It Is
Dave McClure, founding partner at 500 Startups, has the explanation behind why unicorns are getting snapped up even bigger, slow-moving companies. It’s pretty intuitive: This effect happens on a slightly lower level, too. Replace the legacy tech companies with the larger, more stable recent versions, and you’ll see Microsoft getting LinkedIn and Skype, Google shelling out for YouTube and Android, or Facebook getting WhatsApp and Instagram while falling over itself trying to kill Snapchat after nothing less than a failed acquisition.
Which Means the Real Bubble Is Legacy Companies
Chalking up points to the disruptive possibilities at plenty of public companies, McClure holds that the real bubble lies with the overvalued and soon to be disrupted public companies: It’s a passionate argument, and an intentional counter to the narrative that we’re in a post-unicorn tech climate and that many billion dollar valuations will fail, topics that Tech.co has written on before. McClure points out that Facebook was very undervalued at 10 billion dollars, and the fact that companies are hedging their bets by making billion-dollar buys proves that they understand their own eminent deaths.
