New Rules for the New Internet Bubble(steveblank.com)
steveblank.com
New Rules for the New Internet Bubble
http://steveblank.com/2011/03/18/new-rules-for-the-new-bubble/
12 comments
I think the IPO will heat up with LinkedIn, Pandora, Zynga, Facebook, etc. With all the money made, what will people do with it? They will be looking to reinvest. This drives up valuation. This "bubble" seems like it's being fueled by real money (money made by profitable companies) in the hands of investors and that's what makes it different.
well the ipo market heating up would then in turn involve the general public. imagine people clamoring for facebook stock? coupled with resurging economy, you get an interesting bubble action, as people will invest more than they can afford to and risk more than they should.
I don't know - fund managers might well wish to pile in, but people in general still seem to feel burned by the recession and wary of the market. The tech bubble in the 90s took off from a position of much higher consumer confidence as I recall.
sigh We're in a bubble, we're not in a bubble...where are we, guys? If anything it feels like a VC purgatory. Blanks advice doesn't really amount to more than "keep doing Lean Startup, but think of companies looking to acquire as a type of customer as well." The 3/4 of both the blog post and the presentation will be nothing new to anyone who has been here for some time (and the last 55 slides are "backups"). The last quarter has some conflicting advice, "now's a better time than ever to be lean" but "seriously invest in PR so you can be acquired." It's a bit disconcerting that for a guy whose mantra is to create a lean business that is self-sufficient (i.e. without venture funding), he's advocating that people pivot their businesses so that they can be acquired. This article just feels like scaremongering.
I equate bubbles with cycles. So in that sense we're always in a "bubble" of some sort. The question is are we at the bottom of the bubble, the mid-point or the top. It's everyones job to workout at which point in the cycle we are so that they can adjust the risk that they are willing to take accordingly. Thus the constant speculation.
I think start-ups needs to get physical in some ways. Way too much information, nowadays. While Facebook and RSS feeds me like food does, I get enough of it that I don't want to try the next app. There is too much apps and too much information.
By physical, I mean startups like Wake Mate. They make use of technology, the web, mobiles, your computer... but they give you something more than just virtual-information. Something physical is happening. There is an important added value here.
By physical, I mean startups like Wake Mate. They make use of technology, the web, mobiles, your computer... but they give you something more than just virtual-information. Something physical is happening. There is an important added value here.
I've always disliked the idea that a physical good has more value than a virtual or knowledge good.
It's about creating value. A pet-rock is as valuable as a virtual rock.
If a competitor to wakemate was able to monitor your sleep without the wristband and was only a piece of software, would that make it any less valuable to you?
It's about creating value. A pet-rock is as valuable as a virtual rock.
If a competitor to wakemate was able to monitor your sleep without the wristband and was only a piece of software, would that make it any less valuable to you?
2011-2014.
Okay, looks like I've got three years.
Okay, looks like I've got three years.
I don't understand this:
During the the Lean Startup era, the advice was clear; focus on building the company and avoid hype. Now that advice has changed. Like every bubble this is a game of musical chairs. While you still need irrational focus on customers for your product, you and your company now need to be everywhere and look larger than life. Show and talk at conferences, be on lots of blogs, use social networks and build a brand. In the new bubble PR may be your new best friend, so invest in it.
The only justification Steve gives for hype-seeking is that this is a game of musical chairs. What does that mean?
During the the Lean Startup era, the advice was clear; focus on building the company and avoid hype. Now that advice has changed. Like every bubble this is a game of musical chairs. While you still need irrational focus on customers for your product, you and your company now need to be everywhere and look larger than life. Show and talk at conferences, be on lots of blogs, use social networks and build a brand. In the new bubble PR may be your new best friend, so invest in it.
The only justification Steve gives for hype-seeking is that this is a game of musical chairs. What does that mean?
The hidden message is he's eating his own dogfood: he's pivoting lean startups to maintain relevancy while priming for a bubble by finding the change in market as a way to re-advertise the Lean Startup methodology. It's a numbers game - the higher your exposure, the greater your chances of finding the company that just so happens is looking to acquire you.
I think we are in a bubble in the sense that none of this family of companies (facebook, zynga, groupon, twitter) increases the overall productivity of society as a whole (or even their user base for that matter) and yet still garnering such high valuations. Whereas if you look at the last generation of tech companies (especially google) did in fact increase the productivity of the overall society.
I think the overall emphasis on marketing is an outcome of commoditization of software. In an earlier hn news item, OReilly talked about the thing that is adjacent to whatever is commoditized becomes valuable. I think in the case of software commoditization, that adjacency is data. User data has become much more valuable because it is now the biggest moat that can protect a tech business. Its no longer the software and hardware The more ability you have to collect and monitize the data, the more defensible your business becomes. The only way to collect more user data is to have an effective funnel driven by marketing.
Thats my 2 cents anyway.
I think the overall emphasis on marketing is an outcome of commoditization of software. In an earlier hn news item, OReilly talked about the thing that is adjacent to whatever is commoditized becomes valuable. I think in the case of software commoditization, that adjacency is data. User data has become much more valuable because it is now the biggest moat that can protect a tech business. Its no longer the software and hardware The more ability you have to collect and monitize the data, the more defensible your business becomes. The only way to collect more user data is to have an effective funnel driven by marketing.
Thats my 2 cents anyway.
I disagree. What Twitter and Facebook both do is decrease the cost for new ideas to spread - HUGE value to society.
Twitter and Facebook are my primary news sources - and I'm not alone. I doubt the protesters in the Arab world would agree when you say Facebook and Twitter adds no value to their life.
Twitter and Facebook are my primary news sources - and I'm not alone. I doubt the protesters in the Arab world would agree when you say Facebook and Twitter adds no value to their life.
Yes, the Arab protester does show the potential of facebook/twitter for productive use. However from my point of view, facebook and twitter will be more like TV. On the surface it looks like it has a great potential for spreading of ideas, but I don't think it would actually reach that potential where it actually improves the overall productivity of society. I hope I am proved wrong...
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What's the likelihood we're in a bubble if everyone says we're in one and investors continue to pour money into tech?
People aren't always rational, especially with money.
http://en.wikipedia.org/wiki/Greater_fool
http://en.wikipedia.org/wiki/Greater_fool
I wonder how bad the first .com bubble was for big investment firms in toto.
I know it was bad for the market, but how bad was it really for the investors?
I know it was bad for the market, but how bad was it really for the investors?
Wow, I am going to disagree with Steve Blank but I don't think it is a bubble. In a previous comment, I referred to it as a bulge as I do not think it will be nearly as extreme as the previous bubble.
http://news.ycombinator.com/item?id=2336204
There's a lot to like here, including this: "Like every bubble, this is a game of musical chairs. While you still need irrational focus on customers for your product, you and your company now need to be everywhere and look larger than life."
But is it realistic to plan on the bubble going on through 2014?
But is it realistic to plan on the bubble going on through 2014?
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Not sure about the blog post, but the linked Johnny Cash song is worth a listen for the hilarious analogy and well, it's Johnny Cash.
On the other hand, if the IPO market heats up coincident with a strong economy, then watch out.