Spot On 2.0

Having a (great!) regular job is keeping me away of the web and blogosphere both as a reader and a blogger (which is maybe a good thing) but I still have time to read my fav blogs and I have to share this great post by Paul Kedrosky with you. Paul is spot-on on the Web2.0 bubble.

Building companies for a supposedly fast-growing market without significant numbers of people getting stupidly wealthy shows that capital is almost certainly misallocated here. To justify so much money going into early-stage companies doing web 2.0-ish stuff, we should be seeing more hand-wringing about the absurd amounts of money being made by a select few entrepreneurs. But we're not.

Remember my rule: The venture business is a bubble business. The industry owes its existence to its participants' ability to find and exploit liquidity bubbles in technology markets. In this case there is a bubble, but it's entirely at the company creation end of things, not the liquidity end (i.e., IPOs and M&A), which makes it the strangest and least economically rational technology bubble I've ever seen.

Why? Well, what's the financial point of a biztech bubble where oodles of money goes in, but next to no money comes out? At least in the dot-com days we'd had a few moonshot IPOs before people really began pouring money at MBAs who secretly craved to run online cat food stores.

On another note, I ask you: why has the B in the orange square logo of Blogger been replaced by a dog? I thought they were Google, not Lycos. I need to find more about it. And if there is no reason, here is the true question: why not a cat?

Now you know I'm a cat person, I have an MBA. Should I start an cat-owner online community to sell catfood. Plus, there are two things a marketer can't resist selling: catfood and shampoo.

I'll be back with more tonight (more posts that is, not catfood...ntntntnt).

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