Can we please get some sensibility here.
Sure the rich folk might have to tighten their belts; but you won’t be seeing them standing beside the rest of us in lineups to the foodbank. Yes people living the high life on trumped up paper valuations for stupid ideas might actually have to learn what a business plan is; but you won’t see them on the customer side of the soup kitchen counter. Along with this the stock market is beginning to resemble the deck of a ship in a storm with its up and down movement; but unlike the 1929 crash no one is jumping from windows or putting a bullet through their heads. Now that was a crash that forever changed the world; or at least the US, but to equate this shakeout of the market on the same footing is being nothing more than a fear monger.
In the tech world we obviously learned nothing from the dotcom bust of the late 90′s because in less than a decade later we find ourselves in the same place as before. While this current disturbance may have been caused by the greed of people involved in the housing market, the tech industry – especially the whole Web 2.0 sector can’t escape some of the blame. That doesn’t mean that for the majority of people in the industry that the sky is falling. As Duncan said here yesterday in a post
I see the glass as more than half full. Yes, Internet stocks are taking a dive, but only because the market had factored high projected growth into their valuations. The thing is though, not one analyst has yet predicted a decline in internet advertising, every single one of them is still predicting growth, and in double digits at that. More money is going to be spent online, just not as much as some had previously predicted. If there’s growth in web advertising, there’s growth in revenue to blogs and 2.0 companies that rely on advertising. That’s not bad news, that’s good news!
I agree with him and to the point that what is happening was inevitable and a good thing for the industry as a whole. For too long we have been led to believe that we can just waltz around creating business that have no tangible income stream. We have been lead to believe that advertising is the end all be all for business on the Internet when in fact it is and should only be a part of the business scenario. Even as we climbed the hill of paper valuations there have been more than a few companies that bucked the trend of empty business plans and actually built their tech business on solid foundations.
Early this morning Mark ‘Rizzn’ Hopkins who is another person who sees the upside to all this wrote on Mashable about some web businesses that will survive this downturn. In the post he says
I think that our business, that is the so-called Web 2.0 and Social Media business, is probably most suited to make it through tough times unscathed as compared to the rest of the economy.
We’ve fortunately made it past our tipping point. The world knows that they need to be on the Internet, they know they can use it to efficiently connect to new and existing customers (something they’ll be wanting to do more than ever, soon), and we have ironed out the ways to do it. Look at this as our distribution phase. We’ve been innovating for quite a while on the technology side, now we’ll be turning our attention on innovating and making more efficient the business side.
Businesses are going to have to realize that if they have a solid idea they equally have to have a solid plan to make money with that idea. We can no longer just whip up a few pages of HTML, plaster it with some nice colors and big buttons and plan on living off of VC millions in the hope that at some point in the future that advertising they plugged in will pay the bills. We need more companies like Thrillist which Allen Stern talked about yesterday and provided a great video interview with founder Ben Lerer. While Thrillist might not be your typical Web 2.0 company they are a profitable one because Ben had a solid plan that has already paid back their investor.
Mark Evans had a great post today where he also questions this “the sky is falling” attitude that is being promoted throughout the blogosphere by some of the big names. In the post Mark agrees that the current situation is volatile but people are getting carried away with the doom and gloom
Yes, the global economic landscape is volatile and there are dark clouds of uncertainly looming but everyone seems to be jumping to conclusions without offering much perspective.
The fact is that when even a report by bloggers about a possibility of a sub $1,000 laptop from Apple (which was first reported here by Duncan) can see the stock swing upward we have to realize that there is indeed positives to talk about. As Aaron Brazell notes in his post about the upswing there is something in this news that bloggers – especially the A-List ones need to realize
I am in no way suggesting people should go about trying to manipulate the market by creating stories or otherwise fabricating false positive pressure on the market. That is a crime. However, it’s important for blogger to recognize their ability to affect the market for the positive or negative.
And the pressure remains on the top-tier bloggers to use that power wisely and recognize that their words matter. If ever there was a “responsibility” at the feet of these bloggers, it is now.
What do we get instead? We get people like Robert Scoble who have for the last few days done nothing more than highlight everything bad going on. Even when people try and point out to him how this might be the wrong way to go about dealing with this issue he harangues them in public and being nothing short of idiots who don’t have a clue of what is going on. This was nowhere more apparent than on FriendFeed yesterday in an exchange between him and Mark ‘Rizzn’ Hopkins
Sure there are some hard times ahead, I don’t deny that but one has to wonder just how much of it is because those empty promises of massive fortunes to be made along with typical human greed has come home to roost. We can all run around like chickens with our heads cut off like Robert or we can stop the bullshit and give ourselves a good shake knowing that we will come out of this. The question is whether we will come out of it smarter or just to turn around and start doing the same of nonsense that got us here.
People like Robert need to stop the doom saying and step up to the plate and start using their personal soapboxes to help us through this trying time; and trust me it will try the best of us. That doesn’t mean though that we don’t have the ability and the power to change what comes next for the better. I just hope it won’t be another round of buzzword labels and powder puff businesses because that will only land us back in the same place a few years down the road.