The customer doesn’t care about bubbles and unicorns
Young entrepreneurs and China have a different perspective
It’s funny to see how perspectives can be totally different. Both in Europe and the US a great many people are talking about ‘the bubble’. Then a few weeks ago we were in China and there Silicon Valley is considered a cheap region. Company valuations in China are even higher so the Chinese still see the Valley as a place where great deals can be made. A different context offers different perspectives.
Most of those speaking about a bubble are in their mid-thirties or older. This is a group of people who remember the 2001 crisis very clearly. We all remember when the first internet bubble burst. Many of us took a hit at the time and we hate to think back to those days. The funny thing is that most entrepreneurs in the Valley don’t remember it at all because they were something like 12 years old at the time. As a result, their perspective on that whole situation is very different.
The customer couldn’t care less
The most important question is: what does the customer think? Is a customer worried about bubbles or unicorns? Not at all. The customer couldn’t care less. If the bubble pops, a lot of virtually rich people will lose a ton of money, but customer behavior will not revert to what it was.
Financial perspective versus customer perspective
If a bubble pops there are obviously severe financial consequences. Still, let’s look back to 2001 when the .com bubble burst. Although many people lost money, the customer didn’t revert to his earlier behavior. Consumers didn’t spend less time online. Consumers didn’t buy less on e-commerce sites. On the contrary, people increasingly embraced the internet. Back then, the financial market didn’t really follow at the same rate consumer adoption increased.
The same thing will happen now. Will consumers stop using Uber? Will consumers stop buying stuff online? Will people spend less time on their mobile phone because the valuation of a certain app decreases? Not at all.
So from a commercial point of view we shouldn’t focus too much on the financial evolutions in the market. Our focus should be on the customer. How is customer behavior changing? How are market expectations changing and how do we deal with them? That is the key question that must be answered if you’re going to survive if or when the bubble bursts.