Every now and then I get asked if we are going through another Internet bubble.
My answer is a definite yes.
Why?
Just read TechCrunch or SiliconBeat daily and you will understand. Every second day you read about a new photo or video sharing site that just got a 7 million dollars investment. Do you really think they will be able to return that investment?
Do you really believe face book is worth more than 2 billion dollars?
The moment I realized every time I seat in a coffee shop I can recognize at least one bunch of kids sitting with a laptop and designing their next blogs/photo/video/reviews site, I knew we are already in the bubble.
So why in the hell do I open my own start up right now? Am I crazy?
Well... maybe. But the main reason is that today bubble and 99-00 bubble are very different in nature.
In 99 the spread of new start ups was like trying to sell new ways to print and write books to a bunch of people who don't know how to read.
Try to think back - how many of your non technical friends had email back than? How many right now?
How many of your friends was willing to buy something on the net back then? How many right now?
The Internet changed but more important, people changed. Today we already have a critical mass of users surfing the web (and we still just scratching the surface. Think of what will happen when the TV and our computer will finally become one).
So again, why I believe we live in a new bubble?
Well, if we will stay with the above allegory, today start ups spread is like trying to sell 1000 books bundle every month to the same guy (who just wanted to read Harry Potter). If in 2001, there were a lot of start ups with great ideas that got closed after the bubble bursts because there was no market to sell to, today is different. In today Internet, start ups with new good ideas will prevail. But most of the copy cats will die.
The Internet is very different from the physical world. In the real world, you can have 10 hamburger chains because each one will be built in a different location, selling to different people.
But in the Internet everyone are accessible to everything. There is no notion of distance, so everyone are also competing with everyone.
Do you really think the world needs 30 photo sharing sites, giving us exactly the same capabilities?
Do we really need 200 different music services?
The answer is no.
If in 2001, the good and the bad start ups went down the toilet together, today the good will stay with us. All the others will need to wake up and dream on the next bubble of opportunities.
