Here Comes Another Bubble - The Richter Scales

In all the Blogs there is currently the Bubble-talk going on. Regarding Don Tapscott (Author of Wikinomics) - the industry is now mature, and overvalued companies won’t happen again. Because the thing with ‘innovation which comes outside of the industry’ and ’shared IP’ within the industry.

In today’s Web 2.0 age with all its YXZ start-ups it’s the opposite of 2000 - where there was less money to spend on a good start-up than today. And sometimes wasted. We have today so much VC capital and early seed angel investment which is spend in an other way - more intelligent one, related on a rock solid business plan/model. Because everyone - hopefully - learned from the mistakes we did.

I think there has been talk of a new bubble since the day that VCs began investing in consumer internet technologies again. The bubble of the late 90’s felt great on the way up and horrible on the way down. But it was inflated drastically by a public market for highly risky Internet stocks. This time around, although there is a great deal of enthusiasm for consumer Internet startups in the Venture Capital community, there is no public market to further fan the flames. So to the extent that money is lost, it will all be the money of professional investors. And, to my mind, that will never constitute the sort of bubble that causes far reaching pain in the event that it pops. (Source - Dave Hornik)

And what differentiates the post-2000 Internet industry with toady’s one is - that more and more blue chips see and embrace the change from the old model to the new networked, web-based/enabled infrastructure as a new business environment. Also called Enterprise 2.0. But we know that this business is volatile, unpredictable, very competitive and tough business environment too. The corporation as we know it is fundamentally changing. I think that another big influential factor - why some services have so much value - is that they compete against established markets (Office Software, IM, e-mail, communication, advertisement) but they have less factors of cost. And some SMB’s and other company’s take that offering from the guys who have the better product and have real value and better ROI. And by taking that market share away from the cake - brings the big bucks.

I would consider as another factor of growth - as we tap in more and more in the consumer market and into the business market in general which is dependent on the relationship to the overall economy. What I want to highlight out is that - in case - there is a recession due to the credit crunch, the weak dollar, the overheated economy of China, the troubled politics in the far east and the changing one in Latin America. This will have an definite impact on the growth of any industry.

And for the sake of all the talks (or not to miss it out) - there are people who search for investments because the industry they worked in is in a downturn. I personally think this won’t affect the industry because the holes in the sieve are already big enough that it won’t disturb the growth.

Releated:

• bill-gates-says-internet-bubble-is-back
• Subprime Fallout Could Help Venture Capitalists
• todays-globe-column-what-bubble
• AnOpenLettertoCEOs
• enterprise2conf.com/2007/presentations/

PS: Here is the guys sub-prime song.