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Dot Com Crash – Duh the Market is Expanding January 4, 2008

Posted by John in Technology.
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There is a well written post by Greg Linden predicting the upcoming crash of 2008.  The problem is that Greg is “all wet” on this.  His post is laced flawed assumptions.   There are bubble tendencies but we are not fully in a bubble.  You have to be in a bubble for the bubble to pop.  All the leading indicators in tech show expansion not crash. 

Advertising spend is increasing online – will expand the market

Modern Web Infrastructure is evolving – real opportunities for viable companies

Global communications and collaboration – lower costs to operate a business

New targeting based infrastructures (eg social networks) – increase targeting capability for advertisers

Many more…

I’ve lived through a few cycles and we are on the upswing in technology ventures across the board.  

Bubble indicator:  I would start getting nervous when you see more rollups in sectors combined with a viable liquidity market.

Comments»

1. Chris Wilson - January 4, 2008

I happen to agree with you on this point. I see some ideas that are hairy brained but overall the market is growing. I concur. The reason why we see stupid stuff on say techcrunch or other sites is that most of those ideas aren’t funded. They are build on freeware packaged goods hiding behind a buzzword.

The VCs need to be smarter and from what I can see they are.

2. Alan Wilensky - January 5, 2008

It may not be a bubble in the classic sense (there have not been as many IPOs), but there has been a feverish and undisciplined dumping of capital into duplicate business models. I’ve beat this so hard in comments here and there, that I will just leave it at this:

How many undistinguished social networking models can raise and lose 2-7M? YASN.

How many video sharing sites can clone each other, each raising 2-10M? YAVSS.

How many free phone plays can come and go. YAFPP.

You see, something has to give. I point blank asked a VC partner why they gave money to a YASN startup (absolutely no model for revenue):

“I have to take what we have, and put it to work, regardless if the model has been repeated before, regardless of the revenue model, or lack thereof”.

I had just presented this…man…with a well researched vertical with paying clients eager to get a service off the ground. Good due diligence. “So why not my pitch?” His answer:

“If I bring in a deal for an automated dispatch system for towing or anything service related to automotive, I will be laughed out of the room”.

Gawd….


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