Salesforce CEO Marc Benioff Steps On Persistent Theory About Startups

Bubble? What bubble?

Marc Benioff just burst Mark Cuban’s bubble.

While the billionaire Dallas Mavericks owner and some other financial pundits believe that recent outsized valuations for startups are a sign that another dot-com bubble is forming, Salesforce CEO Benioff disagrees.

“I don’t think there’s a bubble,” Benioff said in a recent interview with CNN. “There’s a huge amount of innovation that has happened in Silicon Valley that is getting monetized.”

This puts the current market in stark contrast to that of 2000, when the dot-com bubble burst, sending stocks prices plummeting and closing down some prominent early Internet companies. The poster child for the dot-com era’s excesses was, which spent more money on shipping than it earned selling discounted pet food.

By contrast, ride-hailing app Uber, lodging service Airbnb and cloud storage startup Dropbox -- all of which are private firms with high valuations -- earn money.

Pundits like Cuban -- who argued in March that the market is in a worse bubble than in 2000 -- aren't convinced yet. But Benioff in his interview with CNN explained the difference between then and now.

"These are real companies with very significant revenue streams," he told CNN of Uber, Airbnb and Dropbox. “This is very different than 2000 because those companies in 2000 did not see revenue levels at the high level that we’re seeing with these new companies. ”

Benioff isn’t alone in his no-bubble view. In April, venture capitalist Tony Tjan pointed to the significantly smaller number of public offerings today than during the dot-com bubble -- indicating that businesses are developing mature revenue models before issuing shares. In 2000, 446 companies went public, compared to 275 last year, according to the market research firm Renaissance Capital. So far this year, just 78 firms have gone public.

“Back then, you’d have companies trying to do everything as crazy as sell 99-cent pet food in a $20 FedEx box and think that was a good business,” Tjan, managing director of the Boston-based VC firm Cue Ball Capital, told The Huffington Post in April. “You have a greater rationality and maturation of the business models, and a greater understanding of what’s going on.”

To be sure, both Tjan and Benioff have good reason to convince folks that there's no startup bubble: Benioff has invested in 59 startups, according to CrunchBase; Tjan's portfolio includes the commenting service Livefyre, legal data firm Lex Machina and the real estate analytics site SmartZip.

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