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2012 is the new 2007
In my last post, I linked to something that First Round Capital’s Josh Kopelman wrote in 2007. His post was prompted by — wait for it — a New York Times piece declaring that “Silicon Valley’s math is....
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This doesn't really address any of the issues the NYT article merely states that there were some similar arguments made in an article five years ago that ended up not being true, therefore this new article is completely invalid.

Its like saying the Weather Service predicted 5 hurricanes in 2007 and there were none, therefore this year's prediction of 5 hurricanes is completely invalid.
This article would make sense if 2001 never happened. But it did. The bubble at the time burst. So it's easy to say that a few fearful examples in 2007 didn't come out the way one author feared, but it's wrong to conclude that bubble fears that are based on 2001 are groundless.
I think "bubble or not" is a discussion at such an abstract level that it's hard to get much meaning. The value of something is whatever a willing buyer and willing seller agree. Buyers need to judge the likely future benefit to them -- e.g. what's the cash flow, and/or strategic value's cash flow. When buyers do their homework like this, things tend to work out fine overall; mistakes tend to cancel each other out in the aggregate. But when sufficient buyers get lazy and presume other peoples' judgments for the value of things, then it gets speculative. It becomes people speculating on speculation. That's a bubble. And/or anti-bubble (crash).
As a fledgling VC, you have every right to take the contrary opinion. The fact of the matter is people are spending way too much money on companies that will never make money. Are there exceptions to the rule? As you pointed out, you can certainly take some companies and scream "LOOK - no bubble" in your sarcastic style, but just reading the tech blogs we can see people are dumping money into companies that are features at best, bad business models with no avenues for monetizing at worst.

Are you right about the bubble? Maybe. Are you wrong? Maybe. No one knows. It's safer to bet that history will repeat itself though. Of course that should scare the crap out of the VCs, even though they are the ones pressing the handle on the toilet that is flushing their money away.
A bubble just doesn't mean every Tech Start-Up would crash and burn but it merely indicates that bloated evaluation of many of those companies which are on very weak financial credibility, may not sustain forever.

The concept of free service offering may be good enough but it may not be good enough for ROI as a Premium/Freemium service. Alternate revenue mechanisms must be attempted in such cases which may fundamentally lead to going back to dashboard and rethink the business model.

At one point market correction will ensure the reality check kicks in. Until then VC's will have a field day.
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