06 Jun 2007, Posted by Matthew Reinbold in Thought & Theory, 5 Comments

The Burst Is Coming. Deal With It

Marc Andreessen, former grand pu-ba at Netscape, is only the latest tech luminary to weigh in on whether or not Web 2.0 is “in a bubble”. It is only the most recent in a long string of industry navel gazing whose only purpose is satiate lousy reporting with fickle quibbles. But if the question is irrelevant then why is it repeatedly asked?

It’s asked because people are desperately seeking that clarion call at which they’ll put aside their childish ways and “get out while the gettin’s good”.

Party psychology, surprisingly adept at explaining a number of life’s foibles, is incredibly apt here. Being first to a party carries with it its own risks and rewards – you get the first crack at the snacks, are able to use the bathroom before most of the other unwashed masses, and can work into a groove before being called upon to lay down. However, that also means you may end up making uncomfortable conversation with undesirables because they’re the only other ones there.

For any company attempting to appeal the early adopter crowd or to be first on a new trend the situation is the same. Sure, the room is yours but the audiences are small.

Conversely, everybody tries to exit a party at that sweet spot – that exact moment when the fun has just ebbed over to exhausted hash. To exit early means missing out more mirth and hilarity. To exit late means you needlessly endured increasingly drunken (and unfunny) antics when you could have been doing something much more worthwhile.

Ever notice that its never an individual or solo couple that leaves a party? People almost always leave in groups despite having perfectly working free will. As Clay Shirky describes, this is the ‘Paradox of Groups’:

You were at a party and you got bored. They you don’t leave. Why don’t you leave? But 20 min later, someone gets his coat and everyone leaves. Everyone else was bored too, but the triggering event let the air out of the group.

Why is everybody so obsessed with ‘Are We in a Bubble’? Because they’re all looking for a triggering event. Nobody wants to be the last one left at the party, compelled to clean up after everybody else’s mess. As a result everybody is looking for that sign that its time to head for the door.

A better strategy than casting about for news of impending doom is to behave like the ant from Aesop’s Fables.

The ants were spending a fine winter’s day drying grain collected in the summertime. A Grasshopper, perishing with famine, passed by and earnestly begged for a little food. The Ants inquired of him, “Why did you not treasure up food during the summer?’ He replied, “I had not leisure enough. I passed the days in singing.” They then said in derision: “If you were foolish enough to sing all the summer, you must dance supperless to bed in the winter.”

Ants understand that things are cyclical in nature. Whether it is the seasons or business it is the nature of our world to change. Ants prepare for famine even while feasting. They are able to endure even when the climate grows cold.

The bubble might not burst next month, next quarter, or next year. But at some point things will turn dour. The burst of some sort will always come. Those that are smart have already dealt with it.