Bubbling Talk About Bubbles

The Wall St. Journal has an intriguing story about whether Web 2.0 is another bubble. It features a discussion between Todd Dagres, a founder and general partner with Spark Capital, and David Hornik, a general partner with August Capital. Dagres believes Web 2.0 is a bubble and that “billions will be lost on Web 2.0 companies when all is said and done”, while Hornik takes a more pragmatic approach. Here’s another take on the whole Bubble v.s non-Bubble debate: it strikes me the biggest worry-warts/advocates of Bubble 2.0 are the media rather than investors. Whether it’s the WSJ or Time or BusinessWeek, the media is doing a wonderful job talking about Bubble 2.0 and/or the red-hot Web landscape. Of course, it’s difficult to have a bubble when the investors involved are still mainly VCs and large institutions – as opposed to retail investors who lost their collective shirts during the dot-com boom by buying into hype rather than substance. Of course, VCs are not immune from hype either but, in theory, they’re supposed to be smarter, more pragmatic investors..right?
For more thoughts, check out Paul Kedrosky, who describes Dagres and Hornik as “bubble babies”, and Ouriel.