The BBC’s Rory Cellan-Jones has officially declared that the tech party is over, which means “investors and entrepreneurs may be entering a chilly period when making money from new ideas becomes that much harder”.
The reality, however, that’s okay. While attracting money to finance new ideas is going to be more challenging, the technology world will continue to move forward with new, innovative products. Just because there’s economic volatility and uncertainty doesn’t mean everything will come to a grinding halt.
When times get more difficult, one thing that does happen is the froth disappears. It forces people to really focus on creating new, useful and innovative products and services that can establish a foothold even when there’s economic turbulence.
If there’s a lesson to be learned from the bursting of the dot-com bubble, it’s that it set the stage for the wonderful world of Web 2.0. Rather than kill innovation and great ideas because the IPO and VC markets evaporated, entrepreneurs hunkered down and focused on creating interesting and useful services. Some examples include MySpace, Facebook and Google Wordpress.
With tough market conditions, tech entrepreneurs are going to be more creative, more resourceful and learn to do more with less. Since it will become more challenging to make an idea into a business, only the best ideas will float to the surface. The upside is they will have to deal with far less competition to establish a foothold.
The other thing to remember is it’s far less expensive to start and operate online business today than it was six or seven years ago. It means good ideas won’t be killed simply because there’s no way to finance them.
The bottom line is good ideas and innovative products and services will continue to thrive. There may not be enough activity to fuel the TechCrunch editorial machine but there will be enough activity to make things interesting.
For more, check out Dan Kimerling’s pep talk in TechCrunch. As well, Jeremy Toeman has a good post on staying positive. And here’s some very wise words from Hank Williams, who suggests the problem facing the tech industry is “not running out of money. The problem is not doing something that is worth any money.”. Well said, Hank.
Technorati Tags: web 2.0
4 Comments
The ‘IT Bubble’ gave way to the ‘dot com bubble’ which gave way to the ‘web 2.0 bubble’ … Do all these bubbles mean that I need to get a bathtub?
It’s a cycle: bubble, burst, bubble, burst. You hope that over time, people learn to manage expectations during both phases.
In theory, at least!
Google was created long before the Dot Com bust…
Good points Mark. And it’s interesting really that this story’s been picked up in Canada too. Would this have happened in quite the same way 8-10 years ago?
But agree with your points essentially – it’s a question of adjusting expectations and being a bit more pragmatic about business models.
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