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 botomless 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 preceeding one (whoa, preceeding has two e’s, let’s grab the 2.0 domain quick!). 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 “lets 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 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.