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January 28, 2006

Bubble V. Boom?

Heather Green

There is a lot of talk about how we should redefine what's going on right now with the Internet not as a bubble, but at a boom. But I can't help but think that the third B word we should keep in the back of our minds is bust.

We're all very close to the last bubble and so it might be natural to think that, because all the factors aren't the same (it's harder to go public now, so inexperienced investors won't get hurt, or it's cheaper to do a startup now, so even if companies fail, it's only a small failure), the notion of a bust can't be applied to both.

We have yet to see how this will play out. What we are seeing, it seems to me, is a rush to do the same thing, and plenty of these companies will go under. All I have to do is look in my email box to think that whether this is called boom or bubble, it's a little frothalicious out there. Since publishing on Monday a story about online video??he moment's hot trend?? have gotten 25 or 30 emails pitching young startups.You know all those film sharing companies can't make it, right?

Speaking on this a while ago, Joe Kraus said that seed funders, who are taking the funding place of VCs this time around, will get burned. And maybe like last time, as a whole group of startups go under, it will take time before people take some of these areas seriously again. Already people are beginning to wonder, after Dan Gillmor's apparent bowing out of his Bayosphere citizen media startup, whether citizen's journalism makes sense.

What seems true is that there are a lot of me-too companies that aren't quite sure what their business model is, beyond being funded by Google Adwords. That kind of seems like the definition of a bubble. I don't know, maybe I am just being a curmudgeon.

09:30 AM

digital media

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Heather

I have been observing the 'web 2.0' scene for a while, reading techcrunch and the like.

I agree with you that there are a lot of me too companies.

The common thread with the internet bubble of past is people focusing too much on striking it rich rather than on their services or product.

I started my small New Jersey Concierge business less than 2 years ago and i think to be successful you have to be patient and resilient which might not be american traits.

I see the same thing with my blog, 'Serge the Concierge', slow but steady growth.

For the advertising, I have used 'Google Adsense' and 'Kanoodle' but neither has generated significant revenue.

I think the content and the regular postings bring readers and I am now looking at advertising from affiliates programs and choosing things that might interest my readers.

On the citizen journalism side, I signed up with 'newsvine'. They are very user friendly and I like their 'seed the newsvine' tool which allows me to post my blog entries there as well very quickly.

Other new companies that I started using recently and like are 'Swicki'(Eurekster), 'Squarespace', Flock

Sorry for the lenghty comment but you covered many topics.

Have a good week-end

SERGE

http://www.njconcierges.com

Blog:

http://www.sergetheconcierge.typepad.com

Posted by: Serge Lescouarnec at January 28, 2006 11:54 AM

Citizen journalism is live and kicking and will overcome it's infancy problems and become a mainstream media.

Perhaps the main problem of the trend right now is that it is trated as a new way of reporting news.

My point of view is that news is objective and factual and isn't a good common denominator for citizen journalism. Citizen journalism should focus on areas where it can leverage a citizen reporters' personal view and opinion. News reporting does not fit this prerequisite.

An example is Linkadelic CoMagazine , where one can post website recommendations, articles, news or write a column, Users' votes serve as content filter, and the user experience as well as content is online magazine style. These kind of services fit better into the citizen journalism model as they empower the reporter in a stronger way.

Proper disclosure: the writer is associated with CoMagz

Links:

Linkadelic CoMagazine: http://www.comagz.com/webmagazine/

CoMagz:

http://www.comagz.com/

Posted by: Nir Ben-Dor at January 28, 2006 01:59 PM

??hat seems true is that there are a lot of me-too companies that aren't quite sure what their business model is ???Heather Green

Heather, I would most definitely agree with that statement. Perhaps one of the most on-point reasons is because technology makers and its decision-makers (inventors, innovators, patent holders, think thanks, etc., and, of course, the machinations of big business ) seem unsure of the purpose of it all, aside of making major $$$$. //// Consider the breakneck speed and ease with which technology is constantly shifting, expanding, collapsing, reshaping, metamorphosing, evolving, (I picked up a dictionary to check the spelling of “metamorphosing” and found another word I’m gonna add here) metastasizing (seems to fit,too) …Consider that technology, especially these days, seems to be running amok, even to the casual observer. (please, no more “were just trying to make things easier for mankind … ) Consider these observations as some food for thought, as to why creating and following a “business model” via traditional lines will be purposely avoided by all, if this isn’t how, for the most part, it already is. ///////////////// Unlike years ago (even just,say, 20 years ago), being unsure of a business model seems to be the best way to proceed in creating one; just form the basis of one and tinker with it … (through all this something more definitive will crystallize). All these crazy and rapid changes in technology, etc. almost demand this approach. ///// Going off somewhat on a tangent: it’s as if all this millennium-era technology had been prepared and ready to go -- long, long, long before being introduced to the world. And now that it’s here, it’s uncontrollably growing, from being caged too long. A creature with almost infinite tentacles, leaving nothing untouched … getting restless and turning on itself, regularly damn near choking or squeezing itself to death, realizing each time to loosen it’s death grip only to live its life repeating the pattern … … Damn, the creatures wonders, why I keep doin’ this?. He, too, like the average start-up entrepreneur today ain’t to sure.

Heather, you know the availability, accessibility, and manipulation of information via the internet galvanized the boom (the 1st “B word”) that led to that huge bubble (the 2nd “B word”) that violently busted, leaving a nation in financial disarray for a good minute. Something like this is bound to happen again. That said, Heather, I agree with your reasoning that “[you] can't help but think that the third B word we should keep in the back of our minds is bust. Regarding start-ups and investor makin’ moves to realize another internet bubble and huge pay-offs (no doubt with an precautionary measures in abundance) … It’s already goin’ down. Oh yeah, I could easily envision a huge “bust” going down some ways down the line. Exactly who gets busted or what busts? That’s where the surprises will be.

Posted by: D. Harry at January 28, 2006 02:18 PM

I guess, responding off the cuff to Steve's question here, that the overall problem with bubbles or booms is the euphoria that accompany them. It seems to undercut criticism and helps increase valuations of private and public companies. And I kind of think that it does matter if a company or investor overpays for a company based on boom valuations. And because Angels are taking over funding of ideas, it does matter if they are burned.

Posted by: Heather Green at January 28, 2006 05:12 PM

"Bubble V. Boom?" What kind of question is that? Obviously a Boomble:-)

Posted by: Zoli Erdos at January 31, 2006 04:44 PM

People will always follow the herd .. always have, always will.

Posted by: family history at July 13, 2006 09:22 AM


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