Bootstrapper.com - Confessions of Serial Entrepreneurs

While there is definitely a bubble approaching its not as bad. While there are companies getting overfunded and companies getting funded because of eyeballs or “we’ll figure out the model later” (like twitter) there are several important differences.

1) First and foremost is the valuations are all private, very few public companies are bubbling (except Google which is insanely overvalued) opposed to the last time around when the biggest bubble was public. When it crashes, the market and the average person won’t really feel the crash.

2) Eyeballs actually have value now. In the first bubble crash online advertising was worthless. I was running an online ad network and we built a social networking site - and we shut it down because we determined that in 2002, social network traffic was literally worthless - we couldn’t earn back our hosting bills and we were an ad network. This time around there is real dollars online. It’s hot. You walk down the street you hear people talk about online advertising. Back in 02, you said online advertising, they told you to get a real job.

While there is a bubble. Google is insane, facebook is absurd and Ning doesn’t make any sense. There are dozens of funded startups that are going to go to hell (iminlikewithyou) and ones that will likely never make a dime (twitter) its still not the pie in the sky gazillion dollar valuations of companies that converted cash into compost (webvan). We also don’t hear people saying it’s okay to spend $200 to sell a $10 bag of dogfood for $7.75.

Whenever there is innovation and people have money, bubbles will form but the same bubble rarely repeats itself twice in quite the same way. For example Oil in the 70’s stifled the country, Oil today is a pain but not a big deal - even though its all bubbly bullshit price rigging.

The same mistakes will happen all over again. We are human, we get excited. We want to live the dream. Investors want to live the dream vicariously and seek the alpha dog. Entrepreneurs seek the smell of success. Its life its love, its us. However while we always make the same mistakes, there are generally slight improvements each time.

So until the next sector goes crazy I’m not going to worry so much.

Now if you’re like me, you talk to way too many people and way too many entrepreneurs. I mean its nice to know I’m not the only lonely and crazy sole that can’t sleep at night because he’s found Santa’s secret sauce (psst: Rudolph invented it and Hannukah Harry added in sugar).

However, one thing that isn’t fun is everyone thinking their venture is web 2.0. Now I would like to make a bold statement. WHO CARES!

I don’t care if your company is web 1, web 2 or web whatever, I just care about one simple thing, well actually two….1) Are you making money / can it make money & 2) Do you have enough traffic to sell it to Yahoo before they realize it’s a bag of flees?

If you’re creating a cool new web2ish website to take make it easier to show off your socks online, I really don’t care and I doubt most people really do so unless you are building a web business that actually can be a business, please stop using web2 because everytime I hear web2, my mind drifts towards a sock puppet. (Now, get your mind out of the gutter!) Pets.com, that defined the bubble, will your web 2 venture define the next bubble or should I just buy a pack of Bubble Yum?