Don Dodge posted an interesting article recently on his blog titled “Web
2.0 = Bubble 2.0“.

The part that really caught my interest are the four “stages” of a bubble
that he describes. Here’s a quick summary:

Stage 1: The smart money declares we are not in a
bubble.

Stage 2: People agree that we’re in a bubble, but declare
that there’s still a year or two left to make real money.

Stage 3: The bubble has actually burst, but people declare
it is just a “temporary setback”.

Stage 4: Everyone recognizes and agrees that the bubble has
burst, and life will never be the same.

Don believes we’re well into Stage 2 of the cycle this time around. I sort
of agree, but think we’re getting really, really close to being in Stage
3 — if we’re not there already. Though the Web 2.0 bubble may not have burst quite yet, I’d argue that folks
are not blowing a bunch more air into the bubble (i.e. so the expansion of the
bubble has started to taper off a bit). I could even argue that a little bit of
the air is being let out. I could argue that, but I won’t.

What do you think? Are we at a point now where the bubble has actually
burst, but we still haven’t acknowledged it yet?

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Original Article
Copyright 2007, Dharmesh Shah - OnStartups - Software Startup Blog

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