In finance, a bubble is too much money chasing assets, greater asset production and a herd mentality. In startup business plans, a bubble is too many entrepreneurs and too many investors chasing the latest “next big thing,” like Google search engine, Facebook social network, or Amazon e-commerce site. In all these cases, a bust is inevitable, and everyone loses.
The big question is how to spot these bubbles and jump to a better alternative, rather than get sucked into the vortex. I read a book recently by Vikram Mansharamani, “Boombustology: Spotting Financial Bubbles Before They Burst,” which gives some insight on the financial side, but I believe it can be equally applied to bubbles for startup ideas as follows:
1. Avoid the herd mentality. In theory, this is called the “emergence of group order” or swarm mentality, where everyone rushes in without regard to whether there is enough food to go around. For startups, investors usually toss business plans with ten or more real competitors, especially if a couple have the penetration of a Facebook or Google.
To read the full, original article click on this link: Startup Professionals Musings: Avoid Startup Opportunity Bubbles Ready To Burst
Author: Martin Zwilling
