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Blowing bubbles

From Business Week via /.: "It Feels Like 1998 All Over Again," an article that asks whether we have a new "Internet bubble" forming? The real question is whether investors will lose their minds again with "irrational exuberance." No bulls lurking in the stock market yet, and whole herds of entrepreneurs are bootstrapping, hoping to build "real" businesses rather than investment objects... so I'm not so worried about a bubble – I'm more worried that we'll fail to nurture innovative thinking, which is what it'll take to be globally competitive.

But the rising prices of Net startups are fueling a surge of me-too companies in hot areas such as social networking. With little investment required, these products are easily imitated. "We're in a company-creation bubble," says Joe Kraus, co-founder of Web publisher JotSpot Inc. "A lot of these companies will die."

Over the past decade entrepreneurs and investors have developed a peculiar tunnel vision about what works and what doesn't. That can hinder creativity. Financiers and founders may say they're looking for new Net ideas when, in truth, they're not. "They want only an idea that has been shown to work in the past with just enough twist to make it a new idea," says Edward de Bono, an expert on creative thinking.

jon posted this at 1:05 PM
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