Discuss!
1. Ramp up as quickly as possible. If there is a bubble than it will pop and funding will dry up. So you need to get funded as soon as possible.
2. Run Lean. Take whatever funding you get and figure out how to live off it for as long as possible. That means staying on Ramen for the time being.
Here's the reason for my advice. People treat the end of the first bubble like it was a dead period with no investments. That is not how I remember it. There was maybe 6 months where funding dried up but after that investors went looking for slightly safer bets. Companies that had survived the collapse and still appeared to be running well. Those companies had their pick of the VCs.
Most VCs will tell you their #1 criteria for funding is smart founders. Nothing proves how smart you are than out living your competitors. So if you can build a good product and survive the initial burst I think you're golden.
At least that's my 2 cents.
Startup/VC bubble seems to be a very popular topic in hacker circles, as if all web businesses might get wiped out when the bubble "bursts".
It's wrong to think of all startups as being susceptible to the same sorts of valuation bubble concerns -- tons of "web startups are just businesses with a web component". Tons of web startups are just retail outlets that happen to do most of their business on the web.
Airbnb, Etsy, Amazon, etc just connect buyers and sellers, which is something brick and mortar retail outlets have been doing for time eternal. The valuation of Color doesn't affect their (Airbnb's, Etsy's, Amazon's) business model.
Don't build bubbly products. Investors will always invest in cashflow, whether its web based or otherwise.
Edit: Clarify ambiguous referent.
Also, I don't want to build products to appease investors. Cashflow is the goal, investors are a less important detail if you want to go that route.
i.e. Who cares if some investments are bubbly, so long as you're building businesses that are less susceptible to bubble dynamics.
Editing previous comment to reflect the original intent.
Your point about building a business regardless is the key though.
Seems to me the smart play is to try to get as much startup funding as you can right now, build a really long runway and a huge, sustainable company.
I agree that the bubble exists on the funding side. When you take investments aren't you then participating and abiding by the rules of the bubble?
I was wondering if staying away from the funding (bootstrapping maybe) would let you make decisions that didn't include pressure from the bubble.
http://erehweb.wordpress.com/2011/03/17/what-are-the-picks-a...
Other than that, take advantage of the number of willing investors!
It is difficult to internalize how hard you need to work to hoard cash before a recession, especially when times seem great and money is easy. Even after surviving the 2001 and 2009 recessions it is easy to get sloppy when you have a lot of money in the bank account. We knew the 2009 recession was coming in 2007 and it was still dicey.
Also I dont think we are near another recession, this bubble will have some time to play out.
A bubble is a good time to build your reserves, especially if you're aware it's a bubble and stay frugal. This'll put you in a good position during the inevitable slump.
Stay away from things people think are easy to do and look at things people think are hard to do. And then figure out where people are very wrong about the latter, as they often are.
I'm not kidding. Find a way to supply something to the people seeking to get rich. And profit from their efforts whether they succeed or not.