Martin Cleaver, masterfully.

The Toronto Star carried “Tech bubble 2.0: vive la différence” from DAN FOST of the SAN FRANCISCO CHRONICLE today:

“I absolutely think we’re in a bubble, but the bubble we’re in is very different,” said Joe Kraus, Chief Executive Officer of JotSpot, a Web 2.0 [Wiki] company that provides software that businesspeople use for collaboration.

“A huge number of companies are being created and funded right now,” Kraus said. “It’s so much cheaper to bring a product to market these days.

According to venture capital research firm Dow Jones VentureOne, 49 Web 2.0 companies received $262.3 million in the first half of 2006, compared to 51 companies getting $199 million in all of 2005. VentureOne defined Web 2.0 companies as those consumer-oriented Web sites with open interfaces specializing in user-generated content and social networking.

But Web 2.0 still represents a tiny portion of where venture capitalists are putting their money. Overall, according to Josh Grove, a senior research analyst at VentureOne, firms invested $13 billion in a range of industries, primarily the more traditional tech mainstays like software, semiconductors, hardware, networking and biotech and medical devices.

The median size of a Web 2.0 investment is $4.63 million, Grove said, compared to $7.5 million for all venture investments. “While there is more interest than there has been in these Web 2.0 companies, it still hasn’t reached bubble proportions yet,” he said.

The comparatively low sale prices indicated to [Tristan] Louis [of Boo.com] that the air has not yet inflated this bubble. “The data does not support that conclusion yet,” he wrote on his blog at http://www.tnl.net.

And two key differences and similarities between 2000 and now:

Key differences:

• A new emphasis on social networking and connecting people, rather than e-commerce, which consumers did not trust in 2000.

Issues:

• Some analysts estimate there are more than 240 online video firms out there, and the number of social networking startups - read MySpace copycats - is in the dozens.

Technology is now cheap to produce, and this is fueling a hyper-competition with many companies vying to be acquired.

Collaboration is front and central theme, these tools are starting to deliver on the goals of Knowledge Management by being human-centric rather than technology centric. To take advantage of that will require a completely different type of corporate strategy.

This entry was posted on Sunday, December 10th, 2006 at 1:00 pm and is filed under Innovation, Business, Canadian Competitiveness, MBA, Knowledge Management. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.