The bubble is coming back…

Its been a fast paced  week.   On Monday morning  I had 3 separate VC’s contact me and pitch me their firms/banks before it was even lunch time!   I was also contacted by 7 or 8 new adnetworks in the past 2 weeks not even out of beta!     Personally I wouldn’t trust a company with more then $50,000 a month in advertising revenue unless they have at least 2 or 3 years operating history, all these fly by night companies are here one day and gone the next. 

On top of the deluge of emails from people seeking to get rich off my massive user base  I see other companies like b5 media  getting funding.    Starts to remind me of the last bubble where I saw  bar tenders become project managers in a matter of weeks.  Although with b5 media  journalists becoming executives at a blog network is probably a good thing. But it reminded me of a trend in the last bubble where people who know nothing about computers or programming were rushing into companies and taking executive positions.

The other trend i’ve been noticing is companies stocking up on people.   Does digg really need 15 people?   If i can create a system by myself to serve 20 million dynamic pageviews a day on plentyoffish using a single web server and 1 database server  why does digg need 30+ servers to serve 8 million pages/day that take little to no resources to create?

What is everyone else seeing?   Are other people seeing people who have little to no computer background starting to take more and more management positions?

20 Responses to “The bubble is coming back…”

  1. Dave Dugdale Says:

    Just as a side note, i have notice that Digg has been running slow over the past few weeks – that does not say much for their 30 plus servers.

  2. mad4 Says:

    Digg has been dog slow for months. So much so it stops me using it on an 8Mb connection. Maybe its something to do with the shed loads of JS they load.

  3. Ozzy B. Says:

    “But it reminded me of a trend in the last bubble where people who know nothing about computers or programming were rushing into companies and taking executive positions”
    🙂 I like your style🙂

    Hopefully this time round, the bankers are more savvy and can spot a web-charlitan from a mile-away.

  4. Paul Montgomery Says:

    Some executive positions don’t require programming knowledge, like sales and bizdev. However, I agree that some people are becoming executives without being properly qualified and/or competent.

  5. Rush Says:

    Digg wasn’t written in .NET thats why its crap.😉

  6. ZF Says:

    It would be fascinating to know what in the world a VC thought they would have to offer you. The more you know about VC’s, the less obvious the answer is to this question.

  7. Andy Says:

    When Bubble 2.0 Pops, the only sites left will be the one man shows, like us. The 800 social bookmarking sites will sink, most of the social networks, and on and on. Let me go get the bow and arrow to speed up the process…

  8. threz Says:

    Running a SF based social news network is completely different from plentyoffish, for a start you would need at least 5 people to wine and dine the Silicon Valley crowd to get your name mentioned in every other tech blog.
    Then you’d need at least 3 executives to go to TechCrunch parties etc.
    Plus you have the advertiser lunches/dinners and cocktail parties where all the behind the scenes “special” deals are made..

    All in all, it takes alot of effort to run a PR machine.

  9. Sergi Says:

    Maybe they need 30 servers because they are not as good as you programming. I work for a website, and with our current structure we’d need at least 10 servers to serve 8 millions pages/day. I can’t even imagine how do you server 20 milions a day with only one server. A lot of caching?

  10. Andrew Johnson Says:

    The AP reports Google is in talks to buy YouTube for over $1 billion. Many of these valuations are targeted for a best case scenario — in any market or industry that tells me there is a bubble.

    Sure, the cream of the crop might be worth these prices. Myspace probably was a fair deal at $600 million — but does that mean Facebook and every other social networking site is worth at least that much and more? Probably not.

  11. Marc Says:

    I see the same problem this time around as the last time around. It’s the culture of the VC and pseudo businesses that clamor for them. Anytime, someone in Silicon Valley has a start-up idea, they treat it as a project. They pitch it as a project and hype it as a project. Then the VCs fund it as a project. These are not businesses! They have more in common with government pork barrel projects than profitable going concerns. They are fully funded from the get go, and by fully funded I mean they have plenty of money for all the trappings of a highly successful business, yet are not actually running successful businesses. I think a lot of these executives know plenty about running a big budget project inside a big company, but that has nothing in common with growing a business from scratch. Just hilarious how so many of them never realistically crunch the hard numbers of profitability and hope funding continues with a buyout offer. Tell me what value has Yahoo gained with all the acquisitions in the past couple of years? Seems like they have just been running an overly generous employee recruitment program. Business is about making money, not about being clever and shiny in silicon society.

  12. John Chow Says:

    According to How Stuff Works, Digg has 75 servers.

  13. Duncan Says:

    Just a note Markus, as much as we have bought in a journalist to our fold at VP level, the rest of us aren’t journalists, we’ve got a MS certified engineer, a minister who who happens to now alot about SEO, a trained physcologist, and myself with a tertiary qualifications in Marketing and E-Commerce. A pretty fair balance in tech, people and commercial skills I’d argue🙂

  14. Chris Dorward Says:

    Yep, it’s dotcom 2.0🙂

  15. The Blogging Times » There are no rules Says:

    […] The guy behind Plenty of Fish said it indicated a bubble. […]

  16. ann michael Says:

    I know nothing about VC – I’ll leave that to the experts here.

    But, it seems to be one facet of human nature to try and “win the lottery” and we’ll pay big bucks to get in the running. In my opinion, that mentality is what causes bubbles to rise up (and ultimately pop). Are there lottery winners – of course there are. But what percentage of the players win – a very small percent!

    To me there’s nothing wrong with playing the lottery (and taking big risks) – but you have to be smart about it (and honest with yourself). When we get sucked in and become able to rationalize anything to ourselves to make what we want seem obvious as the best course of action – that’s a sign we’re in (or heading for) trouble.

  17. Jonathan Frate Says:

    “Are other people seeing people who have little to no computer background starting to take more and more management positions?

    Management is about managing people, not managing lines of code. If you want to build a plentyoffish in your basement and run it as a one man shop – plenty of power to you.

    But if you want to build a google, a yahoo, or a (insert any other successful tech company), you need to bring in people with the experience and skills of managing people – and 9 times out of 10, that means bringing in non-tech people.

    No need to demonize the non-techies.

  18. Fez Says:

    I too wonder why Digg needs so many servers.

    Especially when it’s written in PHP, which is (these days) supposed to be the darling of performance for web apps.

    Ruby on Rails gets a bad rap and it doesn’t even have a Digg-sized site to see how many servers it needs, relative to a PHP app like Digg.

    BTW – I’m incredibly surprised at how many pageviews you serve / day on a .NET platform. You’re definitely a kickass coder b/c I’ve heard some real horror stories about scaling .NET architectures.

  19. Comment grossir artificiellement la popularité d’un site web Says:

    […] Markus Frind, CEO du site de rencontres canadien gratuit, est assez souvent très critique vis-à-vis de ce qu’il est commun d’appeler désormais la bulle Internet 2.0, avec toutes ces startup prétendant une audience en centaines de millions de visiteurs mensuels sans réel business model. […]

  20. BSG Says:

    Very True!

    “But it reminded me of a trend in the last bubble where people who know nothing about computers or programming were rushing into companies and taking executive positions”

    However I am impressed as well that you are running 20 million pageviews off one webserver and one DB server.

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