1.) Near the end of the boom cycle, the smart tech investors stop playing the game as valuations get out of wack and puts money into reserves.
2.) The dumb tech investors, that joined at the later stages of the boom, play as long as they can and then the write downs start happening.
3.) The incumbent tech companies also start slowing down and letting go of people indiscriminately and the top talented engineers now become free agents who sell their highly appreciated stock options.
4.) No longer beholden to golden handcuffs, the free agents are free to execute on their side projects while living off their stock option cash-outs and severance. And many perhaps even convince former coworkers who are bored and struggling through multiple rounds of indiscriminate layoffs as well as other engineers laid off from the competition and other flailing startups to join them on this new "cool idea".
5.) The next generation is born as the business plans and prototypes around those "cool ideas" start to come together and the smart VC money sees more realistic valuations.