Bubble? Maybe, Maybe Not. Froth? Oh Yeah

John Dvorak, who loves to get a ruckus going, contends we’re now in a bubble. I’m not convinced by his particular arguments, but I’ve seen signs of a bubble for awhile now. It still hasn’t popped, mostly because the pop that would make noise—IPOs that go bust and catch individual investors in the implosion—hasn’t happened. There just aren’t that many IPOs yet. And it’s also true that companies don’t cost much to create, so it’s not as if even the pros are in big danger of losing a lot of money (yet).

But that doesn’t mean there isn’t some kind of bubble, or at least excess. The fact that you can start a company on almost nothing means there are a whole lot more companies all trying to get our attention. It’s virtually guaranteed that even more will fail, even if they do so more quietly. The fact that so many people spout the dogma that “it’s different today” frankly worries me. Maybe they’re right. But they seem rather over-eager about trying to tell us to pay no attention to the undeniable froth.

Scoble has it right here: We’re in an attention bubble. Sooooo many services require our time and attention today—MySpace, Facebook, Twitter, Pownce, you name it. We can’t do all this stuff at once. A whole lot of contenders are going to lose.

The Valley’s cheerleaders say this kind of creative destruction is a positive thing. Maybe so, in the long-term scheme of things. But there’s a whole lot of waste involved, and it doesn’t all fall on professional investors. We’re talking about the lives of real people here, not just abstract economic entities. Employees who hold useless stock options in their fifth startup employer certainly get hurt, for one.

For all that, I’m on the fence here: Is this kind of thing a bug or a feature?

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