AVC: Tough Times Ahead for the Web (...or not?)

I think we're all trained to expect a downturn after a sustained run of good times. It does not appear that tech will trigger the downturn (if there will be one) this time, but the question is how much will tech be affected? <p>Personally I believe that the solid business models will continue to prevail since internet traffic will continue to increase. However, marginal ideas and products will have more trouble finding the quick cash they are looking for.

Startups that make what people <i>really</i> want are likelier to survive the downturn when it does come. For example, Peter Lynch has said that downturns are a good time to invest in companies that make breakfast cereal -- people don't ever stop buying that. A case in point are the Indian outsourcing companies that saw their stock skyrocket during the last recession -- at a time when American companies were using them as a means to cut costs.

This ties into a question I was going to ask as a discussion item... how far "ahead of the curve" is best for startups, in terms of maximizing chances of success?<p>Obviously one can be too far ahead of the curve, and the market, and run out of cash before you can get profitable, but neither do you want to be a me-too player in a crowded market where differentiation is difficult (and the best-funded player wins).<p>Where's the sweet spot?

It's BS like this that helps actually create a downturn. Repeat the idea enough in the media, and people will naturally begin acting like it's a reality -- making it a reality.<p>The real cause? Our need to punish ourselves for doing well. "We deserve a good downturn right about now. Things have been too good. We need to feel some solid pain to keep ourselves in check."