Bubble 2.0

Venture capital isn’t anywhere near the peak it hit in 2000 (when more than $106 billion was invested in various start-ups nationwide), but through three quarters of 2005 the National Venture Capital Association reports that $17.4 billion has already been invested in new opportunities.

Even John Battelle wrote in the New York Times today that the Internet feels exciting again.

Are we on the verge of another dot-com boom? Does that mean we’re about to create another Internet bubble?

Call me optimistic, but I think we’ve learned our lessons from 1999. The models I see receiving funding today have a real business opportunity, and are run by managers who understand long-term stability and profitability are drivers of their business, not flashy Super Bowl ads and large trade show booths.

This doesn’t mean innovation should be stifled. For centuries, inventors and companies have tried crazy ideas, with only a fraction of those panning out. We’ll still see plenty of dot-com and technology companies introduce far-out concepts with a flourish, only to wither.

But I believe more of those far-out concepts will be rooted in real customer and market demand, and will either learn how to hold out until the market is ready, or evolve based on a sense of fiscal responsibility.