Vinhod Khosla voices the concerns of many in Private Equity Week where he discusses a nanotechnology bubble.
In fact it is the second bubble, we had a small one in 2001/2002 where nanotechnology suddenly became the new economy. After a variety of investors and analysts jumped in hoping to make a quick buck, that particular bubble gradually deflated. The rise and fall of the quite appalling Nanotech Planet conferences and web site (their Boston conference is still remembered as being one of the worst speaker line ups ever assembled) illustrates the point very well.
The Nanosys IPO dooes pose a problem for anyone involved in Nanotech, that over promising and under delivering. We are already hearing rumblings of discontent, are we spending $3 billion a year of taxpayers money to make stain resistant pants? Clearly not, but Nanosys are an easy target as a company with n revenue (well, 3 million or so) and no products. The business model, and the IPO plans are very much based on biotech, a sector that has been consistently disappointing investors for almost 30 years.
As Khosla says “When people start investing in a technology as opposed to investing in an application [and] when people start hyping a technology, you’re sure to have bad things happen.”