This is starting to get scary:
“But what’s more likely is that the VCs involved are betting the team behind Color will come up with something worthwhile for that $41 million, and they don’t particularly care what it is.”
Consider that the founders of Color will benefit immensely from this funding even if the product doesn’t fly commercially, and even if the investors never get a dime back. If anything, this is throwing money away, and shows desperation among investors to get on the ever faster running social media train. If anything, that indicates a bubble. Are you still not convinced?
“One thing is for sure: Another photo-sharing app, regardless of its unusual features, probably isn’t going to cut it. And it’s probably worth mentioning that the Valley is littered with the skeletons of high-profile startups that launched with big ambitions and lots of money.”
This though hints it’s not a bubble at all, at least not yet: Silicon Valley is abuzz with bubble and recovery stories — too soon- – VentureBeat
“Tim Draper, managing director at Draper Fisher Jurvetson, said this week that there isn’t a bubble yet and that a recovery that could last five years is just getting started.”
Or maybe, after all: Warren Buffett- Social Networking Sites Are ‘Overpriced’
I’m leaning towards the bubble idea. Maybe not for Facebook and maybe not right now, but the investors and entrepreneurs are generally too optimistic about any new offering with a “social networking” label. Sooner or later investors need to become more discriminating. Just see how many check-in and group messaging services there are. Very few of them will survive.
This guy says (my interpretation) the hype and money is there, so go for it: Video- How Startups Can Take Advantage of The Bubble- Tech News and Analysis «
He brings up an interesting and valid point: He says that it takes weeks rather than years to develop and launch a new service, with very little investment (not due to agile development, but because it’s simple), and (my addition) marketing is mostly done virally. Then why pay e.g. Color 41M? What will/can that money be used for so early on? Is that even healthy for such a young company? Clearly the team alone is not worth 41M.