No we are not at the start of a Web 2.0 BUBBLE. We are at the beginning of the Web 2.0 investment CYCLE.
We are starting up the curve where investment, attention and innovation are rising. A BUBBLE is later up the curve.
A BUBBLE has a negative connotation and implies that negative things can or are happening. The question you would be asking in a bubble is "Everyone has made a ton of money, can this get any bigger or should I get out now before the floor crashes through?"
How much weight should we assign to the decrease in cost to entry between '99 and '06 in calculating the point at which we're saturated with startups? How many local event (and share your plans with your friends!) evite competitors do I need to have access to? It's getting a little out of hand.
When Web 2.0's cycle increases to the point of a bubble and explodes in a rainbow-reflective-gradient shower of glossy logos, it won't be the VCs that get burned, it'll be the little guys hunting VC (or profitability) who rolled their own and failed or didn't succeed in a stellar way. It'll be much, much quieter than the dot-com bomb.
I'm actually pleased to see projects starting to end up in the TechCrunch deadpool, and I'm waiting to see if traffic to FuckedCompany.com starts increasing.
I think negative things are happening. Too many "younglings" are living a false dream that they can make money by redoing a myspace, a blogger, a youtube. Seriously, there is no value addition between one project and another. Younglings are trying to figure out if they can do NOW what, say, youtube did 2 years ago. And other friendly younglings flock to these web sites for no apparent reason, other than friendliness.
I think the VC-s need to send these guys back home and request them to send a mail to, say youtube, on how it can improve its service, in stead of pouring other people's retirement money on useless idiotic-video-clip sites.
I think I can count really useful web 2.0 services on the tip of my fingers. Meebo obviously counts as first (and possibly a truly innovative service). But, most others better start reporting to f*ckedcompany.com soon.
We are starting up the curve where investment, attention and innovation are rising. A BUBBLE is later up the curve.
A BUBBLE has a negative connotation and implies that negative things can or are happening. The question you would be asking in a bubble is "Everyone has made a ton of money, can this get any bigger or should I get out now before the floor crashes through?"
I don't see anyone in that mindframe yet.