I came across 2 articles this week, one on the tech industry being in a [valuation bubble][val] and one on how [Draw Something is doing now][draw].

Remember a few weeks back when [Zynga bought OMGPOP][omg] for a stupid amount of money because it looked like Draw Something was the next big thing. Well it seems that Draw Something usage is falling off. We are still talking about millions of users but they sold at the peak of the hype, so Zynga may have just bought a lemon.

Then there is Instagram which was just bought by Facebook for a stupid amount of money. The stupidest part about Instagram is that they don’t have a business model. You don’t buy their application (you actually had to pay for Draw Something so some money was made there) so how do you value Instagram?

I have a feeling that all this buying of companies will end up driving the pricing of applications with no business model up and up, then it will all come crashing down.

Yet another good reason to not use services [without a business model][nomodel].

[val]: http://sfard.posterous.com/we-are-in-a-bubble “We Are in a Bubble”
[draw]: http://www.theatlanticwire.com/technology/2012/05/decline-and-fall-draw-something/51792/ “The Decline and Fall of Draw Something”
[omg]: http://www.nytimes.com/2012/03/26/technology/draw-something-changes-the-game-quickly-for-omgpop.html?_r=1&pagewanted=all
[nomodel]: https://curtismchale.ca/2012/04/16/stay-away-from-services-with-no-business-model/ “Stay Away from Services with No Business Model”

2 responses to “Yes We Certainly are in a Bubble”

  1. James Strocel Avatar

    Do you think it’s better to have a slow but sustainable business model or to get filthy stinking rich off an overvalued product sale?

    1. curtismchale Avatar

      I’d prefer to have a slow steady business in something I love. Seems that most/many people are running a sprint to as much $$ as possible.

      I’m more of a long distance guy.