On the Next Bubble

Courtesy of Alean:

I'm definitely far more optimistic about startups than the video's message, but I totally agree that some companies are overvalued and unhealthy for future startup growth. I also see some of these more well known startups as the result of a "Dot-com Cold War", where people and companies throw money at so they don't get shut out from the next big thing. For example, Microsoft's measly $240 million dollar investment is chump change for the Redmond giant. Sure, Microsoft may potentially use Facebook as an advertising outlet, or even as a platform for future development, but I can just as easily imagine the board of directors whispering, "we want to be in... just in case". I see many of the investments done by large companies as similar in tactics to the classic "intellectual property patents race".

The nasty consequence of these large injections of capital is how it changes the public mindset. All the naysayers from the last bubble have returned, ready to criticize. Those who were laid off may start being lured by stock options and inflated salaries again. Many people have either forgotten or intentionally *chose* to forget all that happened a few years ago.

What do I think of all this? I fear for when people start riding the next wave of venture capital. The potential fallout could crush many great ideas and startups who really do deserve to make it. On the other hand, it motivates me all the more to get my act together and establish some roots so I can weather through the worst.

In fact, I welcome the worst. A fallout would weed out all those racing in to make a quick buck. Just don't let it burst too quickly :)