Silicon Valley: They assure that 95% of companies in the technological "Mecca" are not profitable

95% of companies in Silicon Valley "are not profitable", in a context that repeats the experience of the late 90s with a tendency to focus innovation and development in a few companies, said the world spokesman for technology at Telam Zoho, Raju Vegesna.

"Most companies in Silicon Valley are swollen, distorted and not working well, they have focused so much on finances and not so much on people," Vegesna said at a meeting with Telam as part of of his country tour. of the region.

He added that "95% of Silicon Valley companies are not profitable, that they are not well targeted and that, if their public papers are visible, the problem is that they will not be in the near future".

Silicon Valley is the cradle of companies such as Yahoo, Amazon, Adobe, Oracle, Apple, Cisco, Google, Facebook, as well as "unicorns", Lookser, Hassi Corp., Door Dash, Juul Lab, among others.

For Vegesna, whose company was established in 1996 and today employs 6,000 people worldwide, "up to age 60, its average life span was 60 years and its average is now 39. 17 years old ".

"There is a concentration and it is bad, it is not healthy that there are few companies," he added.

The situation of unprofitable companies, whose valuation now exceeds one billion dollars, is reminiscent of dotcom bubbles and their explosion in the late 1990s.

"We will not go in the end, we have seen this film," Vegesna said. "In 2000, Zoho had 304 unprofitable customers, and in 2002, 302 customers of the group disappeared."

Asked how far the industry should go to avoid repeating the crisis of the late 20th century, he said "the way is to focus on research and development, rather than thinking about society".

"70% of smartphone which today is bought corresponds to the expenses of the company marketing and sales, only 30% correspond to the value of the team itself, to research and development, "said Vesegna.

"You have to reverse this equation," said the business man.

He added that Zoho, which has 300 engineers in innovation labs, spends 80% of its revenue on these areas because "there is a long-term vision" and that's why "we exist longer that Google ".

The tour of South American countries responds to the search for investment opportunities in the region.

Vegesna said his teams had analyzed the relationship between the average age of populations and the development of their economies.

In Latin America, the average age is between 25 and 35 years; "The trend is not linear, there are cycles of two or three years, there are ups and downs, but if the average age remains below 40 years, the growth of l & rsquo; Economy is sustained, "he said.

According to his research, the average population of Argentina is 33 years higher than Brazil (32 years), Peru (26 years), Colombia (30 years) and Mexico (28 years); "But the fertility rate is 2.4% higher than that of Brazil", which would allow a "more constant growth" over a period of 20 years.