Most startup founders fear the tech industry is in a bubble, survey finds

Over the past two years there’s been a lot of talk regarding “unicorns”, or startups carrying US$1-billion valuations. While the buzzword still makes for catchy headlines, skeptics fear that there is a bubble developing within the tech industry.

This belief has been reiterated in a new report by US-based First Round Capital, which surveyed 500 VC-backed startup founders. The majority (73%) believe that we are, in fact, in a bubble or witnessing over-speculation of the tech industry. Specifically, industries such as wearables and bitcoin are believed to be overhyped, while autonomous vehicles and mobile are underhyped.

Prospects for the VC industry overall don’t seem that positive either, with over 95% thinking that it’s going to remain the same or get harder to raise capital.

Interestingly, enterprise company founders are very optimistic. Firstly, this group denies the bubble twice as often as its consumer company peers. Secondly, twice as many founders who fall into the former category also indicate that they’ll be profitable within the next year.

Other interesting findings by First Round include the fact that 44% of women-led companies have a 50/50 gender ratio, while only 25% of men-led companies do. Women-led companies are also more likely to have some initiative in place to increase diversity.

Read more: Ventureburn survey sheds light on SA’s tough, but pioneering startup industry

The biggest concern for VC-backed entrepreneurs, according to the survey, is finding and hiring the best talent. This is followed by concerns over revenue growth, acquiring customers, culture, raising follow-on capital, and so forth.

First Round also found that founders over the ages of 30 are 40% more likely to be solo founders than their younger peers. And that while younger entrepreneurs (under 30-years old) are more likely to have a “strained” relationship with their co-founders, they tend to be best friends — over 33% more likely than their older peers.

Out of the 611 entries for the “most admired leader in technology”, a massive 22% voted for Tesla CEO Elon Musk. He was followed by Amazon CEO Jeff Bezos (7.5%), Facebook’s Mark Zuckerberg (3.3%) and Google co-founder Larry Page (2.6%). Facebook COO Sheryl Sandberg was the most popular woman submitted with only 0.7% of the vote.

See the Slideshare below:

Image by Ferran Jordà via Flickr

Jacques Coetzee: Staff Reporter


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