It is too easy to feel almost invincible on Wall Street lately. After all, if earnings turkeys like Twitter an experience a stock surge, surely more obvious stock market pigs, with lipstick or not, will surely fly. There is a sense that we’re reliving the late 90s once again as the market’s seeming exuberance for stocks seems to have no end. If sad or iffy companies are gaining a lift, actually solid companies’ stock prices are shooting through the roof. One key indicator that we may be dealing with another tech bubble is the fact there is now a veritable business ecosystem for startups. From seed funding facilitators to networking services to other support services. While this is a healthy development in the sense that it brings order to an otherwise chaotic process, the fact that startups are now placed on a track where they can be worked on by different service providers does highlight the fact that there might be enough systemic incentives built into the tech space where less than worthy or outright bad ideas get turned into business plans and these get funded and rolled out to an investment-crazy public.
While the idea of selling shovels and jeans trousers to gold prospectors might make a lot of sense for Levi’s Jeans back in the late 1800s, the fact that modern day versions of such support services for digital gold minders have arisen seems to indicate a maturing yet speculation-prone market. Far from being a wholly welcome sign, these companies might just operate, in an inverse way, from the canary in the goldmine. Unlike the canary whose death from fumes signal an impending disaster, the rise of these tech startup support service companies might predict the impending disaster of a stock market correction of epic proportions. Considering the fact that the US economy is still on life support and buoyed primarily by the US Fed’s easy money policies. But as history has shown us, all parties, even the best ones, have to end sometime.