Showing posts with label bubble. Show all posts
Showing posts with label bubble. Show all posts

Friday, February 11, 2011

Validation From Fred Wilson: Froth

Glas of german "Würzburger Hofbräu" ...Image via WikipediaWatch the first video here. Fred has come around to using my word: froth.

But then I have also inched a little in Fred's direction. I recently used the phrase mini bubble burst.

I think we are both still blind men trying to figure out the elephant. But at least we are trying to figure out. Most others are simply making wild jumps.

Some real wealth creation is taking place. But every new emerging sector will necessarily be accompanied by froth. That is the nature of the beast.

There will be a slew of sob stories in a few years but I don't see any imminent collapse. We are in the first year of a boom decade.
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Saturday, December 04, 2010

Bubble Talk Goes On: It's An Overshoot

Bono at the Vanity Fair kickoff party for the ...Image via WikipediaFred Wilson: Invest In The Mess
New York Times: A Silicon Bubble Shows Signs Of Reinflating
The Day I Got Called Sean Parker
Did Not Meet Fred Wilson, But Met Mazy Dar
Angel Bubbles: No Bubbles
Bubble, Boom Or Froth?

Fred has said repeatedly that what we are seeing is a bubble. First thing I say is this is not a yes no question. Is this a bubble? If you force ask me, my answer is no. This is not a bubble. This is hyperactivity. Will many angel investors lose money? Sure. But that does not make it a bubble. Even a top notch VC like Fred Wilson expects one third of his portfolio to go down under. And these are companies that he did not invest in on day one knowing they will go down. You think you picked a winner, you give them sufficient money and guidance, you go to bat for them, and they still go down. If Fred Wilson is at peace with a 33% failure rate, there are VCs whose failure rates are 66% and 90%. Most VCs fail. Most entrepreneurs fail. By some estimates as many as 90% of new businesses fail within a year of getting launched. Looks like 10% is all capitalism needs to survive.