G5 CEO Dan Hobin

In April, the tech-savvy car sharing company Zipcar finished its first day of trading on the Nasdaq at $28, nearly a 30 percent rise from the starting price of $20. In May, social networking company LinkedIn’s stock jumped from $45 to $94.25 on its first day of trading. And in its debut last week, the real estate website Zillow closed at $35.77, nearly double the initial price of $20.

Those are just three of the more than 80 companies that have gone public so far this year, many of which have Internet or other high-tech elements built into their business models.

Then there’s Facebook. While not public yet, an initial public stock offering of the social networking company is expected next year and the company’s most recent market valuations, according to media reports, exceed $100 billion. A Facebook IPO could be the biggest since Google’s in 2004.

Add to that, a 78 percent increase in the Nasdaq composite index in the past two-and-a-half years and a familiar — and concerning — pattern starts to emerge.

These facts echo similar market occurrences in early 2000 when the dot.com bubble hit its peak — and then crashed.

These similarities have some Americans and media outlets speculating about the possibility of another tech stock implosion. The cover of the July 25 issue of Fortune magazine shows a big pink bubble-gum bubble popping in front of the mouth of Facebook CEO Mark Zuckerberg.

But even as signs are cropping up that a tech bubble is forming, there’s little agreement over whether a second bubble for technology companies is already in effect or is about to burst.

In any case, any of those scenarios could impact Central Oregon’s small, but growing, technology sector. Technology jobs made up only about 1.2 percent of employment in Deschutes County in 2009 — the latest year for which data are available — so a slam to the local tech industry shouldn’t cause too much damage to the overall working picture here, said Carolyn Eagan, regional economist for the Oregon Employment Department.

But Ruth Lindley, marketing manager for Economic Development for Central Oregon, said her organization wants to ensure the health of the technology companies here, many of which are small and have room to grow. They also attract still more companies with a technology bent. Plus tech companies typically offer higher-paying jobs, she said.

So with all this in mind, what do local technology company leaders think about the trends toward a tech bubble? And if it bursts, how would it affect their businesses? The Bulletin checked in with a few of Bend’s technology leaders to see what they think of all the talk of bubbles bursting. The comments have been edited for clarity.

Dan Hobin CEO, G5, Bend

Company’s main business: Providing online search, social and mobile marketing services for companies in the business of student housing, self-storage, senior living or multifamily housing.

Financial fact: Raised $15 million from Boston-based Volition Capital last year.

Does it feel we’re in a bubble? It feels like there’s a lot of companies getting funded in the mobile and social space that may not have business models yet. … But I also feel like we are in a similar place to where we were in 1998, 1999, as far as a major transformation of technology use. First was the shift to just online from traditional forms (of media), and now we’re right back where we were again, (but) starting the shift to mobile and social.

It’s really hard to say (how a bust could affect G5). We’ve got to just try to make hay while the sun shines. … We’re spending money right now, investing in our growth. We could cut back if we needed to and still have a great business. …

I feel there will be a lot more money invested in startups in the next two years. (But) we’ve still got a way to go before (irrational) exuberance. We’re not there yet. But within the next year we could be there. …

It’s a fun time to be in the Internet space.

Mark Hinkle President and chief operating officer, Manzama, Bend

Company’s main business: Producing software that scours Web sources for information useful to attorneys.

Financial fact: Won the $200,000 prize at last year’s Bend Venture Conference.

I think in any recession, there’s a lot of pent-up demand, so companies stop hiring, they stop spending money on technology and … they just end up using older technologies or older systems and kind of limp through bad times. When things begin to turn around, they start to spend.

Most of the companies that are going public today that are raising money are being looked at with more of a discerning eye, and I think that they have a better idea in terms of business plans how they might make money, as opposed to, you know, 1999, when there was very little of that. I think investors hopefully have learned their lessons and are asking the tougher questions that maybe they didn’t ask previously.

However, that being said, I do still think that there’s this environment out there that is conducive to a bubble in that not only do you have companies that are increasing their spending on technology, you also have investors that have had money on the sidelines for a long time.

Do I think there’s a frothy environment? I think it’s frothier than it was a few years ago, certainly. (But the) fundamentals are a lot different.

When they find a good opportunity, after they’ve asked the tough questions, they are looking for a good place to place their capital. (Investors are) challenging you on your projections. They’re challenging you on your product ideas. Any sort of forecasts or assumptions they’re challenging. … Addressable market, competition — what are you doing that’s unique and protectable and hard to replicate? In other words, they’re not just sort of sitting there, passively listening to your story. …

We built in a buffer (of capital). … Nobody has a crystal ball, so you don’t know what’s going to happen. With our last round, we took in enough that we be confident that it would get us to our goal, which is profitability. … For us, we feel pretty good now. We’re not too worried about the future, you know?

Bill Moseley CEO, GL Solutions, Bend

Company’s main business: Producing regulatory software for state government agencies.

Financial fact: Has never taken in venture capital or angel investors’ dollars, but has made use of loans and lines of credit.

When we started, my father-in-law (guaranteed a loan for $100,000 through US Bank), and then the original owners of the organization took meager or nonexistent salaries for the first couple years to get us going. …

There’s a ton of money out there. (Angel investors are) finding places to get a good return on that money. High tech is notoriously risky, and everything is notoriously risky, because there’s no demand in the economy overall. … This is the new normal of consumer demand.

(With) a lot of (companies), you’ll go to a business meeting, (and you’ll hear discussion about) exit strategy. Death is my exit strategy. For me, it’s always been like, profits and growth are really important to our organization, in that they enable us to do other things.

The primary business focus is to help our customers and to create an environment where our employees can learn, grow and thrive.

It’s always been about having a work environment that I really enjoy. That doesn’t mean that we don’t want growth. We’ve doubled in past seven or eight months. On the profit side, you have to make money, there’s no question about it. (But) at the same time, … it’s just never been our game (to sell out to venture capitalists for millions of dollars.)

I think that whole play is a really important part of the tech sector. (But) sometimes I don’t think that game is the best strategy for Bend’s economic development.

When (Bend companies) are bought up or taken over by these outside parties, it just seems to be over and over again that we get these successful entrepreneurs who build these viable enterprises, (and) they sell out, and then the new company says, ‘we don’t want a dual facility in Bend, or, that line of business is fine, but we’re going to hold it steady.’ It just seems to kill those things.

Evan Julber CEO, SocialEatia, Bend

Company’s main business: Coordinating restaurants’ social media messages through the website SocialEatia.com.

Financial fact: Has been self-funded since establishment late last year.

Increased interest in Internet companies has brought people to our doorstep or has brought inquiries (from potential investors) to us. We haven’t worked with them. We just continue to push ahead on our own till we find the right opportunity. It’s always a possibility.

I think there’s an incredible amount of investment money on the sidelines as a result of the pronounced recession from a couple of years ago, and currently those funds are faced with very dismal rates of return from traditional cash investments, with interest rates at below 1 percent. And I think a result of that is that stale money naturally begins to gravitate to investment grade or to investments such as stocks and real estate. And with the profitability of certain companies, Internet companies, it’s natural to attract those investments.

Investment funds allow companies such as ours to hire the talent or hire the resources necessary for further success. And I think that’s ultimately good for Bend. And Bend is ideally positioned to become the Silicon Desert.

As long as a company strives to achieve profitability, it can withstand any absence of investment funds. Let me add that any company that can achieve profitability will always be able to attract investment money. Even in 2001. Because then we’re just back to the basic fundamentals of investment. …

Bend is just ideally situated to become a tech development mecca — low housing prices, an incredible quality of life, and, certainly for the companies that are located here, lower cost of resources and operations than if they were located in Silicon Valley.

Lisa Flynn Founder, whippersnappers studio; CEO, Krysalis Inc., Bend

Companies’ main businesses: whippersnappers operates photography studios; Krysalis produces proprietary photo-editing software for use in the studios.

Financial fact: Last year Flynn secured about $500,000 in funding from angel investors after presenting on behalf of whippersnappers at the Bend Venture Conference.

I think that if we’ve learned anything from the past 10 years, it’s to never say never and always be prepared if in fact there is another tech bubble coming. In Bend, we’re building sustainable businesses.

(A second tech bubble) would affect us in a lot of ways. It could affect the businesses that we are partnering with. If those businesses fail, then one of our paths to revenue shuts down. Obviously, that would impact us. (But we) will still have a business model that will continue to provide and produce. It wouldn’t affect as drastically as much as (other) companies.

We’re not fully a software company. We still have humans involved in the process. We still will provide jobs, and we have people actually working here. … And we actually have products too. We’re going to enhance, stylize, (and we’re) also going to sell. A gallery-wrapped canvas or a frame-matted print. Or a photograph book. It’s not just the tech here. …

It’s very attractive to create or develop something that doesn’t require, you know, humans to run it. (It’s a) tech model that people are making a lot of money on. (But) it’s not the space that we’ve entered for a couple of reasons. The product that we have doesn’t put us there. And it’s a very cluttered, albeit popular, space.

Illustration by Andy Zeigert / The Bulletin

Illustration and graphic by Andy Zeigert / The Bulletin