In the 90s, cell phone companies were privatized and concessions were auctioned because the potential market was huge in Brazil.
In 1968, Intel was founded, a company that turned sand into processors. A potential market and unimaginable profit margins.
The two examples above show what was at the time a fantastic addressable market and that in both, in different proportions, it happened. Both were also invested by Venture Capital until the IPO thesis, late stage and closing of the cycle.
One took 50 years and the other 30.
The potential market is over;
Intel making cuts and at a loss. Unthinkable. Telecom with marginal growth, same in profitability.
The world has changed the time of cycles, drastically reduced. But they exist and should be applied in any Tech business. The potential market currently exists is exponential. The past is just a reference for us to think that even a company that transforms sand into money has its cycle numbered.
And yours, when will it end?
Text by Alon Sochaczewski, founder & CEO of Pipeline Capital.