It’s coming back, but this time, it’s a 2.0 bubble. We will not likely see hundreds of millions of dollars burning in bottomless pits, as VCs are being more rational about their release of funds, but no doubt a good many companies jumping on the bandwagon will not survive.
Take social networks - there are a myriad of them
appearing, each an even more boring copy of the preceding one (whoa,
preceding has two e’s, let’s grab the 2.0 domain quickly!). It looks like
anything with two vowels in line can be The Next Big Thing. Andrew Wooldridge
has created a very handy Web
Two Point Oh! name and product generator for your shiny new
company - endless fun. Want a 2.0 bullshit generator? Go
here. The tools are available, the VCs are waiting with the cash,
what are we all waiting for?
I read a few weeks ago an article that defined this
bubble as more controlled, in the sense that investments are made after the
business model is somewhat proven, so the old “let's get 100.000 users and
figure out how to make money later” is definitely out. Here is a great list
of 11 suggestions to survive the 2.0 bubble -
sobering read.
My opinion is that bubbles are a necessary evolutionary
process, they sort out the weed from the golden nuggets. The 3.0 bubble will be
way bigger than this one - why? Because the 2.0 bubble will be more of a pop,
with dozens of $10 million investments going down the drain, thus VCs will say
“hey, the last bubble wasn’t that bad, we can risk more money this time”.
History has proven that history always repeats itself.
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