In Wired, Joanna Glasner covers the recent spate of funding in Social Networking. My comment hints at something I have been meaning to post on for a while...
More-extreme optimists, like Ross Mayfield, founder of social-software startup Socialtext, expect networking sites will soon begin taking away customers from more-profitable established businesses, like recruiters and dating sites.Others believe the enthusiasm over networking sites is overblown. At a recent Stanford University forum, participants debated whether online networking has a viable business model. Some said the sector is beginning to look like the latest Silicon Valley investment bubble.
Not so, said Mayfield.
"Right now everyone's an expert in bubbles, and there's more than a healthy dose of criticism for any new business that manages to get some level of funding," he said. In the case of networking sites, he added, "venture funding doesn't necessarily validate a space, but they're making these investments off of some good fundamentals."
I may be a more-extreme optimist, and I am not an apologist for being so. You have to be if you are an entrepreneur, build anything or generally believe in people. Now this doesn't mean my critical thinking skills have degraded or my bullshit-detector is on the fritz.
You see, its easy to be a critic. Especially when blogging. Most any post can be fisked. Most any argument belittled.
Back when I was on the debate team at UCLA, we discovered a competitive weapon, Lexis Nexus. Speech and debate at a competitive level is an execise in research and overloading your opponent with information. Literally, it having file folders of snippets ready to counter any arguement. Since your time to speak is on the clock and there is no rule against speaking illegibly, you bang out snippet after snippet, banging your chest to pace your breathing, overloading with otherwise random and barely related facts until your opponent has run out of answers. The ability to search for the exact phrase (e.g. terror within 5 words of Noam Chomsky) gave you answers to everything so long as you could physically move your file system. Now everyone has the power to string together snippets out of context to make any point they so desire.
Recent history shows our propensity to swing from extreme irrationality to extreme irrationality. We are still at the bottom of the barrel in trusting markets, VC, politicians, regulators and labrador retrievers. Its not that this lack of trust isn't baseless -- we have all been burned -- but unless we get over it, we won't trust each other enough to seize new opportunities.
I keep seeing great incremental advances. The only rational inexhuberance that is called for is with unemployment, a real and tangible pain largely unaddressed by the current administration. Aside from this one significant issue -- great stuff coming out of garages, cool products, new companies getting funded, VCs being active and IPOs on the horizon. If any of these things relate tangentally to blogspace they are met with extreme criticism, mostly by folks without domain expertise. This is not a cry for optimism, its a simple thought that criticism can be constructive and success can be encouraged.
Of course, whatever I just said will probably be torn to shreds ;-)
