Intresting you mentioned DIGG APPARENTLY ITS NOW WORTH £200Million AND IT WAS SET UP 18MONTHS AGO WHY DO ALL THESE IDEAS always come from aAMERICANS
HERE IS AN ARTICLE FROM THE TIMES
Return of the hype
Much has changed since the dot-com bubble burst, but much has stayed the same. Jonathan Weber finds no shortage of hype in Silicon Valley
The great dot-com bust of 2001 left a lot of scars in Silicon Valley, and one of the consequences of that painful time is a seeming obsession with not making the same mistakes again. Yet the very nature of the tech start-up industry assures that many of the same mistakes will indeed be made again, and for proof of that proposition one need look no further than the latest issue of Business Week magazine.
Business Week, as its name suggests, is the most staid and sober of the big three American business magazines, but every now and again it gets in a lather and publishes something like its current cover story, entitled "How This Kid Made $60 million in 18 Months."
Never mind that the kid in question, Digg.com founder Kevin Rose, has done no such thing. Incredibly, Business Week takes the throw-away statement that "people in the know say Digg is easily worth $200 million," combines it with the assertion that Rose owns "30 per cent to 40 per cent of the company," and, presto, a sensational but fundamentally bogus cover line.
The story itself is an equally extreme exercise in breathless (and thoughtless) hype. "Some experts say" that YouTube, the wildly popular video-sharing site, "could easily fetch $500 million." Well, I'm sure "some experts" do say that, but I personally know "some experts" who believe the site is worth little due to its lack of a business model and potential vulnerability on copyright issues.
It's nice to think that "all it takes is a laptop and a $50-a-month internet hookup to make a kid the next mogul," as the Business Week story states. But no example of such a scenario is offered, and indeed it appears that Rose got to where he is with $50, an internet hook-up, a rich friend who was willing to write a $50,000 cheque early on, and $2.5 million in venture capital funding.
But it's the arrant nonsense about venture capital community that's most instructive, in an upside-down sort of way. Nowadays, supposedly, the attitude of entrepreneurs towards VCs is: "Maybe we'll let you throw a few bucks our way if you get it. Otherwise, get lost." Personally, the only entrepreneurs I know who are telling money people to "get lost" are those who already have money. I'd think this would be blindingly obvious.
One John Freeman, a UC Berkeley business school professor, is quoted expounding on all the "different pots of money" now available to entrepreneurs. Trust me: people who tell you how easy it is to raise VC money now or ever are people who have never had to raise VC money. After I wrote this I checked John Freeman's bio, and indeed, it contains no sign that he's ever sweated it out on Sand Hill Rd.
I have no doubt that Kevin Rose is getting more girls, which in a certain way is really what the story is about (Rose was "photographed signing a pretty brunette's cleavage."). And I don't mean to diminish his achievement. On the contrary, while I do wonder whether a site which depends on a mass of unpaid techies (94% male) to decide what's newsworthy is really the next New York Times ("some" think it is, according to Business Week), I do know how hard it is build even a moderately successful web business.
Yet in its peculiar effort to explain how 2006 is different from 1999, Business Week ends up reinforcing every silly stereotype about success in Silicon Valley and inadvertently making it all sound like, well, 1999. Now, as in 1999, VCs act mostly as herd animals which chase the latest home run MySpace is big, so let's fund a social networking play. YouTube is big, let's fund a video-sharing site. Now, as in 1999, there's a lot of opportunity because traditional barriers to entry in media and other industries are crumbling. Now, as in 1999, at least some of the business press is so eager to be up on the next big thing that it readily buys into the hype.
The truth is, there are a lot of differences this time around. For one thing, the public markets show no signing of buying into the latest internet frenzy, which creates issues for VCs but means any crash is likely to be more limited in its impact. The cost of starting companies is indeed lower, and a lot of the people involved do have more experience. But let's just say that when people start talking about the uniqueness of "the new brat pack" in Silicon Valley, you can bet they never spent a lot of time hanging around with the old one.
The Valley is a brutal, Darwinian, boom and bust economy, and always has been. That much, I'm sure, won't be changing anytime soon.
