John Dvorak, who admittedly is not particularly known for his business savvy (tongue, meet cheek), has an article up on PC Magazine talking about Bubble 2.0. It's one of those articles that I think you can't help but agree with. I mean, at least amongst those of us who are somewhat rational.

There is some really cool web stuff going on these days, and the potential that was seen before is still here (the potential probably always will be). Combine that with the fact that money seems to flow from stock to real estate back to stock. We're looking at a whole lot of money flying out of real estate and a huge surge in venture capital. It's really not all that surprising on a macroeconomic level. Rich people want to take risks and keep their money in play (don't we all.)

The real "problem" is that most folks follow markets a tad after when they should. Not only is the industry filled with the usual suspects, but it quickly becomes filled with all the "outsiders," most of whom are outsiders for a reason (tongue and cheek getting along nicely). Each idea is being pitched by someone who says that they want to make you a millionaire and they're going to do it overnight. The hype grows louder and louder as each entrepreneur tries to make themselves heard, each claim becoming more ridiculous than the last. The end result is a heck of a lot of noise and companies that don't live up to their own hype. Almost always they get so caught up in the game that they lack any plan whatsoever for monetizing. People forget, rather quickly, that ideas are a dime a dozen. It's execution, implementation and corporate survival skills (stay scrappy) that seem to matter most.

When this whole "web 2.0" (I just threw up in my mouth a little) thing started, there was a ton of discussion about what it actually meant. Was it the technology? How about user generated content? What about the drastically lowered barriers to entry and a focus on profit? The fact that anyone, anywhere can create something truly incredible codejammin' in a hotel over a weekend, or in the middle of a Chicago suburb, was truly inspirational. With TechCrunch posting about which widget took multiple millions in VC every day, I guess that lowered barrier thing is no longer part of the conversation. Nor is the "you-can-be-anywhere" aspect, as our friend C.K. "I'll Never Move to L.A." Sample just packed his bags for the west coast so he can be physically closer to Calacanis's wiki (I hope Thatcher likes dry heat and traffic, suckah! ;). We've taken a completely boundless, low barrier medium, and given it geographic boundaries and a thirst for obscene valuations. I disagree with Dvorak when he suggests that a pop is coming soon, I think we're just now seeing the start of it, but yeah, the party can't possibly last forever.

The inevitable "crash" (or correction, or adjustment, or whatever happens in retaliation) will flush out the pretenders just the same as it did last time. I think the companies that will survive will be the ones who are focusing on people and not the mythical, anonymous user. Solve problems that make peoples lives easier. Think through as many revenue models as possible just in case AdSense goes away (I can haz clickfraud?). Keep costs low, grow smart, stay patient, ignore competition (and haters) and listen to the people using your product. If your competition does in fact do something that you should be aware of, you'll probably hear about it through folks' feedback anyhow.

UPDATE: Posted a quick followup.