This essay needs editing. At present it sounds like commentary on some cable financial news channel overheard yammering in an airport. "Is this a bubble, or is it a wonderful time to buy into things that don't make money?" What is the central idea? It is not about the financial news, I am sure.

The dot.com era began around 1993 and grew to a fever pitch by the end of the 90s. Companies were gaining huge investments with low interest rates which allowed them to grow even faster. A quick look at broadcast.com, the internet company that broadcasted different events, will confirm this trend. When broadcast.com was sold to Yahoo, it sold for $5.7 billion. It had millions of users and the general thought at the time was that once a company was big enough, it could charge users for services later. The problem was, many websites never got around to charging for their services. Instead, many sold themselves off to larger companies making their owners millionaires and billionaires. Of the ones who didn’t, many of them folded completely; the others took years for them to regain their stock value (Amazon and eBay for example).

In that era, investors in total gave billions of dollars to dot.coms and startups that were unproven. What is the difference between then and now? Some argue that this is nowhere near the same as then, others are not so optimistic.

Mark Cuban, one of the men who became a billionaire by selling broadcast.com, certainly thinks this era is as bad as or worse than the dot.com era. In a recent blog post he writes, “The only thing worse than a market with collapsing valuations is a market with no valuations and no liquidity” (http://blogmaverick.com/2015/03/04/why-this-tech-bubble-is-worse-than-the-tech-bubble-of-2000/). In his mind, the problem is even worse than the old era because now people are investing in completely private companies. At least back then, many were publicly traded so there was a way to stop some of the bleeding and recoup even a small amount of losses. Now, if (or maybe when) these huge tech companies capsize, there will be no safety net, no liquidity, absolutely no way for these “angel investors” to receive some of their money. The market is setup perfectly to destroy millions of lives IF it collapses. The salvation will of course be never experiencing the bust side of the boom and bust coin.

While Cuban may be preaching hellfire and brimstone, there are other voices that disagree with his sobering view. Amish Shah wrote about the subject in Business Insider (http://www.businessinsider.com/why-mark-cuban-is-dead-wrong-2015-3). His main point is that investments now are different than they were back then. In the dot.com era, investors were looking for huge payouts at a very quick rate. The market bent to that and eventually investors realized there was no money behind websites, causing trillion dollar losses. Nowadays, investors “know it takes on average three to seven years to exit, if not longer.” He argues that people invest in order to make large amounts of money. It is almost impossible to make such exorbitant amounts if you don’t invest in the early cycles of a businesses’ life.

That being said, I still do not think that adequately addresses the point being made by Cuban. Regardless of the reason these people are investing in the beginning, there is still no real value behind many of these apps; unless of course the value is that millions of people use it. Traditional value is people pay X for Y. It was easier to value what companies were worth because you could tell how many people were buying and using the product. In this era, these private companies often keep their user base number quiet in order to cloud what they’re actually worth (http://www.businessinsider.com/snapchat-active-users-exceed-30-million-2013-12). The “revenue” is in ad space instead of paying for a service.

The other argument against us being in another “bubble” is that investors are actually capable of correctly valuing a company. Brett Arends writes about this trend in a recent column (http://www.marketwatch.com/story/this-is-nothing-like-the-2000-dot-com-bubble-2015-03-25). He points out that there is not a huge amount (well, to the level seen in 1997-99) of real dollars invested into startups. He also writes that only Facebook is extremely valued at a rating of 75 times trailing earnings. Again, while these points may be true in that they don’t reach the level of investment seen in the dot.com era, I still do not see how this is an argument against there being a bubble ready to burst. Just because investors are now asking tougher questions than they once did, do they really know how to properly value an app startup? We are in an era that has never been seen before. Investors are making projections based on questions asked of young adults with no market experience. Sure, it is all good and well to map out a plan for monetization, but that doesn’t mean the users will take that route.

Take a look at Jay Z’s new music streaming app, Tidal. It is flopping tremendously because consumers are unwilling to pay for it when Spotify and Pandora are offering similar services for cheaper or free (http://rollingout.com/music/jay-zs-tidal-app-flops/). How do investors value Snapchat at $19 billion when the plan for monetization involves emojis or similar “premium” items (http://www.bloomberg.com/news/articles/2015-02-17/snapchat-said-to-seek-up-to-19-billion-value-in-funding-round)? I just do not see how this era is anything other than a bubble. There are billions of dollars invested in unproven companies with business models that have yet to be widely tested with sustained success. Maybe everything will fit together perfectly and everyone will be rich! Pipe dream, I know. The much more likely scenario is one Cuban painted in which the zero liquidity of these companies causes billions of lost dollars.