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back to article Bubble 2.0 startups will crash out before they cash out

It's possible your next startup idea will earn you $1bn, but don't count on it. While there are some stand-out success stories in Silicon Valley, there is also a raft of startups pushing product features masquerading as companies. Some of these will be acquired by the likes of Zynga and Amazon, and some will go public. But …

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  1. Anonymous Coward
    Anonymous Coward

    This has always been true though

    The classic question always comes up-is it worth buying a company or finding a way to steal their ideas?

    And actually, I think life might be getting better for innovators because of cloud computing and cloud services. The more locked in to a service a user is, and the more 'social' it is, the less easy it is to switch to switch to someone else's, and the more tempting buying up a company with its embedded user base and mailing lists becomes. So Yahoo knew that they could never build a Facebook killer, they had to buy Facebook and integrate it into themselves.

    (Side note: goodness, what would have happened if Zuckerberg had let himself be talked into selling his company into Yahoo's soiled hands?)

    What I find amusing if not sad is that now there's even less interest on the part of young companies in making a profit, though, because of the need to grab lots of customers. Instagram made itself free in order to get millions of users in order to be valued at billions and bought by the Zuck. I don't think it ever saw itself as a revenue-earning company, just a giant piece of bluff.

    I think the big question here is what Twitter's plan is. How much longer can they keep losing money? Do they have a path to profitability or do they hope to be bought up by Microsoft or someone?

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    1. Anonymous Coward
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      Anonymous Coward

      About time people invested in tangible goods rather than vapours held on some server.

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  2. Eddie Edwards
    Happy

    What does this article really say?

    ANY strategy is a losing strategy for the vast majority of companies. That's the numbers game. One in ten become profitable. The question is, which strategy is best? And that's going to depend on your product.

    You're not going to make a billion dollars with a ten-million-dollar product. Unless you're Instagram and you sign on the dotted line while Zuckerberg is half cut.

    OTOH, there are still billion dollar businesses to be built. They're just not going to be built in someone's garage in 3 months, on top of someone else's product. Because it's not like anyone got rich using someone else's microprocessor, or software stack. *cough*

    But there is still a big difference between writing a Facebook app and making a product that changes the way the world uses computers. Except when it's a Facebook app that does that.

    So, business as usual then :) Contradictions all round. If anyone actually *knew* how to build a $1bn business, they'd just do it, time and time again.

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    1. Anonymous Coward
      Reply Icon
      Anonymous Coward

      Not a lot. To draw an apposite parallel, "Open and Shut" articles are like the startups referred to here - there's plenty of 'em but most don't have much to add.

      just need to resist the urge to keep reading them... got to get some interesting work to do instead, arrrgghhh...

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  3. Chris 3

    Could we make Matt's CV a bit longer?

    Is it just me, or is it growing each week. I want to know which middle school he went to.

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    1. Anonymous Coward
      Reply Icon
      Anonymous Coward

      Re: Could we make Matt's CV a bit longer?

      I'll settle for knowing what he smokes when he writes most of his articles ....

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  4. Andy Fletcher

    As I see it....

    most of the buys have been far more about user base than technology. Google Video wasn't really any different from YouTube technically speaking, it's just YouTube had the enormous and (probably most importantly) loyal user base.

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  5. asdf

    another advantage of open source

    It always has been very dangerous for software companies to play around exclusively in Microsoft's ecosystem. If you get too wildly successful count on them burying you by spending a few billion to build a clone but extended so they can extinguish you. As well never count on their flavor of the month technology being around for the long haul (cough Silverlight).

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