It's all Market Research. There isn't and won't be a bubble.

[rokhayakebe]

Please. Can they stop talking about Bubble this Bubble that. If you do not have a chewing gum in your mouth, then there is no Bubble coming anytime soon. What is happening is simply a change in Market Research. Yes. That is all. I am not going to give another expose on how Technology cost is so low compared to 3, 5, 10 years ago. This single factor allows entrepreneurs to test out the market before investing the big bucks. How is this any different than the 50k to 100k they pay focus groups and consultants to find if a market is feasible or not. Now for merely that same amount of money we see companies being created to test the market. If it works then fine, if not then NEXT. This is all it is Trial periods. the only problem is that we don't hear about the consultant who pocketed 200k to google, copy and paste and tell the corporations to go or not to go. If we did, they would scream Bubble for consultant too. We see hungry and creative youngsters who do it for themselves. So please, let's keep that Bubble talk in the wrapper until we need fresh breath, from what i see there is no shortage of creativity and users. Sorry if I offended anyone.

[akkartik]

Interesting. 3 rebuttals:

1. VCs opportunistically pick companies they think will do well. They don't have a grand problem statement that their companies fit into.

2. A company's failure can be due to market characteristics or just mismatches in the team. How do you separate the two?

3. Do VCs want to be in the market research business? Are they equipped to learn from failure? Arguably not.

[rokhayakebe → akkartik]

Are you a VC? 1. good for VCs 2. Failure due to market characteristics as well as team mismatches are simply the result of that Trial period. A consultant would come back after looking into the market and the team, and say " they don't fit" . 3. Because VCs don't want ot be in the Market Research business, they look for young people who have the time and energy and have been researching the market with their product in closed beta. Then if the result of that "market research" is promising, then they invest.

[akkartik → rokhayakebe]

I thought you were saying that investing in a company, especially seed investing, is equivalent to market research.

You can of course wait for the research before you invest. I'm not sure how that's an anti-bubble argument, though. The whole point of startups is that there's a risk-reward continuum for when you can invest, from highest risk at an early stage to lowest risk right before an acquisition. The bubble argument is that the threshold for risk goes up imperceptibly for a lot more people. Now how does thinking of startups as market research address the bubble argument?

And no, I'm not a VC.

[rokhayakebe → akkartik]

That is what I was saying.Several bloggers and professionals are screaming Bubble because money is being thrown at startups again and there are popping everywhere. My point is that 1-if you understand that the same amount of money is being thrown at consultant to research the feasibility of a market, then you understand that the money is not much, 2-Just because there is lots of startups out there doesn't make it a bubble.There are way more clothing lines, then startups and somehow the market is absorbing. What will happen is the same as in all markets, if your product doesn't offer any added value through (functionality, price...) you will simply end up being dead before you can even close one round. End of your market research there.