A Bubbly Education: How a Web 2.0 Collapse Will Create a Stronger Set of Entrepreneurs
People mark time personally and professionally by defining moments.
As a sports fanatic growing up in Washington, DC, I vividly recall the Washington Redskins three Super Bowl victories in the 1980s, as well as the crushing defeat to the Los Angeles Raiders in 1983.
Professionally, Q2 2000 was my initial bitter taste of reality. Strategic Communications Group (Strategic) rode the dot com bubble to our first-ever million dollar revenue month in March 2000. The technology correction changed all of that and in 12 years we have yet to make it back to that level.
Two articles I read this morning have me thinking about bubbles. This NY Times article by Nick Bilton reports on the current go-go days in Silicon Valley fueled by the public and private equity investor hype around Web 2.0.
One industry party I attended had a jungle theme. This included a real, 600-pound tiger in a cage and a monkey that would pose for Instagram photos. A prominent Googler’s Christmas party in Palo Alto had mounds of snow in the yard to round out the festive spirit. It was 70 degrees outside. Sean Parker, a founder of Airtime, threw a lavish, $1 million party that included models he hired to roam the room and a performance by Snoop Dogg.
The second piece is a Washington City Paper profile of social networker Peter Corbett and his efforts to champion the Washington, DC technology community.
Corbett has been the new economy’s biggest cheerleader, spokesman, and advocate. Part of the reason why is that Corbett sells cool for a living and sells the tech scene on the side, in ways that don’t always seem entirely separate.
Make no mistake…this is absolutely a bubble! Jungle themed parties…Snoop Dogg spinning tunes…selling cool for a living…I was here before in 1999 and 2000, and I promise you the dance track will soon end.
That’s because this enthusiasm is funded by the unrealistic expectations of public shareholders and private equity investors. They’ll soon get hip to the lack of financial return and refocus their money and interest on something else.
I actually believe technology bubbles are a critical component to the long-term health of the industry. They attract talent to the market and spur innovation.
Plus, the ultimate “pop” educates a new generation of entrepreneurs that a viable and sustainable business is based on a simple concept: you have to create and provide a product or service to paying customers, at a profit.