The problem is that not all of these big cash investments are going to pan out as good – some of these firms are gong to fail spectacularly and expensively.
“There is no fear in Silicon Valley right now,” Mr. Gurley said Sunday at the South by Southwest music and technology conference. “A complete absence of fear.”
But some fear is what the Valley needs, he says, noting that there are simply too many unicorns out there right now – a unicorn being defined as a private company valued at more than $1 billion by investors.
“I do think you’ll see some dead unicorns this year,” Mr. Gurley said, noting that some of these unicorns – particularly things going head-to-head like Uber and Lyft or Square and Stripe – cannot all succeed at once.
Not everyone agrees with Gurley’s line of thinking. John Zimmer, president of Lyft, has noted that both his firm and rival firm Uber have experienced sharp concurrent growth.
It is worth nothing that Gurley does have something of a dog in the fight. Two of Benchmark’s (Gurley’s firm) portfolio companies are Uber and Snapchat – valued at around $41 billion and $15 billion, respectively.
