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Two bubbles, visualized
Below is the performance of the S&P 500 (via the Vanguard index fund), as graphed by Yahoo Finance:
This graph speaks volumes. My professional career has spanned 14 years, and in that time two major bubbles have grossly inflated the market, then suddenly popped. Inevitably it raises the question: for all of us mid-30-somethings who lived through the dotcom years, and now the creditbomb years, how much of what we saw - and did - and created - was for real? How much would have really existed had it not been for those two brief shimmering mirages?
See also: The Onion's Recession-plagued nation demands new bubble to invest in
And how much of what went wrong did you think was your fault? I don't know about you, but I joined 2 start-up companies just after the peak of both of those curves, and it's definitely enough to shake your confidence.
I've been a developer since 1994 and have been apart of both cycles as well. In the past year or so I've given considerable thought to just how expensive software is to develop and to what domains the development costs are justified.
It occurs to me that the web app space is not near the top of that list. Sure you have Google with their add revenue but honestly, what activities on the web would you actually pay for directly on a continual basis. Personally, I can't think of many outside of Gmail and I'm a Geek.
While there's been some interesting software to come out of the dot.com bubble and the web 2.0 bubble, sometimes I think it's been more about massively over funded/indulgence of mental masturbation.
Excuse me while I tweet that I'm taking a shower ;-)
Good question about the Web apps. We'll definitely see which ones have enduring value as the economy continues to shrink. I'm reminded that back in 1999 we had what, a dozen different well-funded dotcoms selling pet food? There was a real reckoning over the next few years for dotcoms... wonder if that will happen for Web apps, too. (And I say this as a Web app creator myself: https://www.gootodo.com )
I think you could make the case that there has been no real US economic growth in the last 30 years, that it has all been a giant shell game. FWIW, I think even Google and Amazon are a house of cards, and they are the success stories of the last decade. Ultimately, they are all incredibly dependent on sustained high levels of consumer demand, and that demand is tapped. The model of Web2.0 is not fundamentally different from the last go-around, just with lowered expectations. But in order for advertiser-funded companies to be successful, you need a lot of excess consumption, enough so that advertisers don't seriously question how effective their ad buys are.
I think the only web-based app's I would pay for (for personal use) are Safari (already do, because I hate buying tech reference books), Hulu (especially if they improved performance and expanded their offerings) and if the New York Times started requiring payment to read their content. Even gmail would be very easy for me to replace; its main draw is that its free and I don't have to maintain it.
I am immersed in interwebs. I think its a great medium for commerce, and I think the B2B infrastructure has really matured in the last 8 years. That maturation has really allowed companies with real products to manufacture and sell (or in the case of content, acquire and sell) the ability to be far more productive, scalable, and distributed. But I think the highly visible toys which get all the cachet are complete masturbation.
(Which doesn't make them useless, but I would never invest in facebook or twitter).
Funny, most people remark positively on the work I did in the valleys of the graph. Here is looking to some great work...
At some point, subscription based web services and content will fall by the wayside as unscalable and unable to maintain meaningful revenue.
I think we'll eventually have a web app service account, similar to a phone bill or cable subscription, where we tack on web services like tv channels or caller-id. when you can really pay what an app is worth to you (maybe $0.35/mo), folks will be much more likely to do so, esp if all their stuff is wrapped up in a tidy $29.00/mo auto-renewed bill.
But hey, I don't sell'em, I just design and build'em, so I could be way off =]
The old truism applies: If something can't go on forever, it won't. Still plenty of money to be made in bubbles if you get out at the right time. And there will be more bubbles in the future. Simple fact of life it seems.
to much money being speculated... 95% more is traded a day on forex than is needed for us to function