The Cycle of the Tech Bubble
It’s interesting to hear someone in the thick of the industry (Michael Arrington of TechCrunch) grousing on how there’s too much VC money flowing through Silicon Valley, causing people to lose sight of the products and the technology. And he’s right, when the big money investors (who may or may not necessarily be interested and knowledgable about the technology) swoop in, suddenly it becomes all about money and not the products and the good clean fun of entrepreneurship.
I’m not saying big money is always bad, but there are startup ideas that require big money, and ones that don’t. I would guess that most tech startups don’t need the millions of dollars that are thrown their way. My buddy Jeff’s Eqo mobile VOIP startup, which could completely change the telecommunications game? Sure, they need the millions. But a site like Digg, who’ve received, at my last count, $11M in funding — do they really need $11M to do what they do?
It’s pretty clear to me that we’re seeing another tech bubble — though not as severe as the last one, which was littered with countless IPOs and affected a lot of small investors outside of the industry. We’re a lot more cautious this time around. But we’re still seeing a lot of private investment money thrown around irrationally, and when the bubble bursts, VC money will dry up again and lavish launch parties will once again be a thing of the past. That is, until the next bubble forms and the cycle begins anew. 
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