Brij’s One More Idea

As if we are watching movie in slow motion.

Last couple of days I saw lot of bloggers turning sour on the state of Silicon Valley (by extension start-up ecosystem). Lot of this is credited to muddy macro picture. Yesterday's rare gasp by GOOG made some people go home early as well.

Om Malik has great analysis on why everybody should be worried now. Related to that is the Vallewag report on funding challenges faced by widget makers. Big hitter VC Kleiner Perkins is sending a big signal by pretty much leaving Web 2.0 market.

Now this is all cyclical and we will come out fine as overall economy shakes off current crisis. There is no denying the fact that lot of business models have added layers of froth and they need to trim down fast.

Ad revenue based online services, mobile applications, social media start-ups (and SaaS to some extent) will go through long slog before they are meaningful to mainstream consumers (and investors)? Deals are not happening fast enough and that has clogged the pipeline. It will take some time to clear up.

Also companies in Bay Area need to go global very fast. Google is now making majority of it's revenue from outside US (52% based on yesterday's call). There is only so much small company can do sitting here. They need to venture out and strike up partnerships and sign distribution contracts.

Markets are cyclical. Remember that.

[Photo courtesy Forklift]