Innovation
Are we in a Bubble? Yes we are…
18/08/2008
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Loic LeMeur just posted a video on Seesmic (and a Blog post) asking to people if they think that we are in a bubble… and he says that there is no Bubble in the Web 2.0… Here is the video:

Do you think we are in a bubble? I don’tRelated blog post http://www.loiclemeur.com/english/2008/08/were-not-in-a-b.html

On my point of view I have to say that we are in a Bubble… is hard to say but it is so. Web 2.0 made companies save big money on the content creation, but even if there is a big reduction of the total costs some companies are still not able to survive by their own… they survive only with big investments and there is a big part of business that are not able to monetize and they close down.

Of course I’m not in San Francisco and I’m out ot the ring of the top bloggers, of the big web enterpreneur and of the web guru… maybe they know something that I don’t, knowledge given by them by experience and by living the “web-dream”, they probably know more on how it works, better than me…

But I have to make some consideration about that video:

  • How a Business should work? – From what I know about business, a business or a company survives and increase when it has a gain, a gain given by the mark-up provided by the selling of a service or a product… once a company manage to cover the costs and the investments becomes profitable and can start living by its own. Form what I can see form news and blogs a lot of money has been invested in Web2 services and companies, and for how much those were innovative and good very few of them managed to survive, there is still a lot of companies that goes on “deadpool” and that they disappear, or that wanna try to find some other company that want to acquire them. Lot of Web Companies are still surviving with the money that they manage to rise in funding, and with some millions of dollars on your pocket a company can survive for years… but there is the need for a company to make money.
  • Who don’t want the bubble? – Always from my point of view, there are people out there that don’t want to think about the bubble and discourage that idea for some clear reasons… Those people are web-entrepreneur, aspiring entrepreneur, “top” bloggers, some investors, anyway people that are making a living (and a good one) with the Internet and they are scared that everything can finish. If an idea regarding an “Internet 2.0 Bubble” ready to explode start to circulate, lots of people could lose interest in investing on the Internet Services, and if that does happen the only safe income for lots of companies would disappear, creating a lack of money that would make lots of company close and then the bubble would explode. That can be in some ways be considered as “Information Manipulation”, where media are used to create consent and make people see that the bubble does not exist. Below a scheme of what could happen and what people does not want to happen.

To survive there is the need to make money and to have a clear business model that can guarantee an income and a survival pond for the company itself. The bubble exist and is going to explode sooner or later, and will be a bigger mess than the last bubble. The investment rate regarding Internet Services and Web sites is decreasing, and Angels soon will start to ask for results and money back. When the bubble will explode only few giants are going to survive and the 90% of the internet services that we know is going to close down. The bubble exist, there is no need to cover it… anyway I hope for them that I’m wrong… but from what I can see around I will stay with my idea…

About author

Edoardo Piccolotto

Dad, husband, MBA graduate, I work as a Web Marketer on an Ecommerce Company, where I implement strategic decisions by using data and lean-organization methodologies.

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