The next tech bubble? Thoughts about Yo and tulips ...
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Editor's note: Amy Huffman, the "data geek" for Exit Event, discusses bubbles, the emergence of Yo, and what's happening in the world of "apps." Exit Event is a news partner of WRAL TechWire.
DURHAM, N.C. - When I first learned of the app, Yo, and its $1.2 million dollar investment, I experienced a wave of nostalgia. In my more youthful days, I often greeted friends using popular late ‘90s phrases like “What up, yo?” or “Yo, dude.”
So, seeing the word ‘yo' enter mainstream culture again quickly sent me back to my youth. But after my initial reaction, I realized the app reminded me of something else I read about a few years ago—tulips.
In 17th century Holland, if you owned tulip flowers, you were considered to be important and successful. When a rare and particularly popular genetically-modified tulip bulb—called mosaic—was created, the tulip market bubbled because bulb prices skyrocketed far beyond their actual value. Merchants bought large numbers of bulbs with the intent to sell them the next season at a profit, further exacerbating the market. At the peak, one mosaic bulb could sell for roughly $90,000 in 2014 dollars. As more bulbs were grown and the market became saturated, the price of bulbs dropped dramatically, crashing the market.
Today, this series of events is famous as the first recorded economic bubble.
When Yo took the media by storm, I couldn't stop reading about it. Not because I was interested in the app itself, how it works, or why its security failed. But because it made me wonder what its popularity and large investment meant for the future of the app and tech economies.
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