Thursday, April 26, 2012

Will innovation outrun the Social Media Bubble?

Have we become immune? 

Are we just desensitized to our surroundings? 

Do we really understand the implications of the era we are currently living in?

These are a few of the questions I find myself asking. I see what has gone on in the last decade and it floors me. These times will be in the history books of tomorrow, but when we look back will it all just be a blur? We have all become so accustomed to the incredible speed of innovation that it has become the norm. It has especially become the trend for tech bloggers and reviewers to become bored of things only a few months old. It is harder to find products that stand out and excite people the way they used to, as before an item is even released, it is already outdated with something better already on the horizon.

There are a few exceptions to this, but those days will be numbered. We look at the TV for example. Nothing really major has come to the TV in quite some time. Sure, there the amazing OLEDS announced back in January, but I still feel it missed the mark. The current phone and tablet market can show proof of this. We have phones and tablets at higher resolutions than our flat screen televisions. This laziness is going to catch up to the companies in these markets. All it will take is one great product and these companies will be left behind and unable to catch up. We are constantly witnessing the kings of yesterday being overthrown practically overnight. Just look at Blockbuster, Kodak, Yahoo, MySpace, and Blackberry to get an idea. We could easily see some of the big names of today become a thing of yesterday.

This brings me to the dot-com bubble of the late 90s. The bubble eventually burst and brought havoc to the internet. The values of these companies just became so overblown that it was bound to happen. These were companies who were not making any money. The news of the recent Facebook IPO and their evaluation being in the hundreds of millions has had me thinking. We see Facebook buying Instagram for 1 Billion dollars, which is a company that has been around barely a year. It just seems 1 Billion for a product that simply adds filters to photos is a little ridiculous. To put this in perspective, this makes Instagram more valuable than the NYTimes. Is this the beginning of a new bubble? It sure looks like it is, but my question is this, does it really matter?

I recently wrote a paper on classic management, but it appears that business styles of the past are not always the best choice as much more emphasis needs to be placed on constant innovation. The innovation is coming at such a fast rate that there really isn’t a chance for a bubble to burst. Facebook will not go under by a bubble burst, but by another company that comes along and makes a better product. You could see this as the reason Facebook was willing to pay such an insane price for Instagram. I believe they saw it as trying to stay above the innovation curve. It truly is innovate or die in this market…. err innovate or buy in some cases  Instead of a bubble bursting we are going to see more and more companies being overtaken overnight. Innovation is simply going to outrun this bubble, and in the process lay foundations for more innovation. We are going to see many companies get dethroned, but with a constant forward motion that is getting exponentially faster. I believe there are most definitely similarities between the late 90s/early 2000s bubble burst, but the internet has matured a great deal since then and the forward momentum is much too great for another dot-com incident.


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