UK Startups, mini-bubbles and the VC

In today’s Guardian Victor Keegan writes positively about the solid, vibrant start-up boom that is currently percolating through the coffee houses of London and the other web/tech centres of the UK.
He …

By
8th March 2007 at 1:58 pm

In today’s Guardian Victor Keegan writes positively about the solid, vibrant start-up boom that is currently percolating through the coffee houses of London and the other web/tech centres of the UK.

He contrasts the frugality of this generation of start-ups like Last.fm with those of the dot.com boom like the infamous Boo.com.  As he says:

… it is 90% cheaper to set one up now [a website] than at the height of the last boom. This time it is not a bubble waiting to burst. These new startups make a virtue out of frugality.

I agree there is no big, over-funded bubble stretching its rather thin skin ever more taut.  What there is, in my opinion, is a shower of little mini-bubbles all ready to burst – hurting little more than the egos of the increasing number of hopefuls setting up specialist social networking sites.

Just look at the number of such sites that Europe’s version of Techcrunch, Vecosys, has documented of late.  Keegan himself highlights a meeting between VCs and two guys from Dublin who’ve put together a social networking site for people who enjoy fancy dress – http://www.welovefancydress.com/.  The last time I attended, albeit I was late, the Second Chance Tuesday events in London, three out of the four entrepreneurs I met had established specialist social network sites.

While I’m not disputing that there is a potential demand and that anyone with a passing knowledge of Drupal can create a site for a few hundred quid, I fear Dunbar’s number may rapidly begin to assert itself.  A mini-network of a few hundred is great news for the members of that network, but not so great news for business.

But VCs must be loving it.  They can bet small and often without any danger of losing their shirt.  Who knows, maybe welovefancydress.com will be the next big thing after all.  Personally I’d bet my money on Ning who’ll be cleverly aggregating and spawning hundreds of these little social sites.

Tags: , , , , , ,

#646464

Alex is the founder and editor of SmallBizPod, the UK's first podcast dedicated to small business, start-ups and entrepreneurship. Alex writes about topical small business issues, entrepreneurs and anything else that catches his eye here on the small business blog. http://www.smallbizpod.co.uk

comment on start-up tips

Commenting Is Easy

Do you agree with this blog post? Disagree? Have something to add that others might find helpful? Then please leave a comment in the box below.

If you'd like to have your image included next to your comments here, then you can set yourself up with an avatar in just a couple of clicks.

Leave a comment

Photostream

Listen to the sales podcast for SMEs Subscribe to the podcast on iTunes

BUSINESS PODCASTS

Click on one of the play buttons to listen to inspirational interviews with entrepreneurs from SmallBizPod.

SmallBizPod #81 - interview with Laura Tenison founder of JoJo Maman Bebe

SmallBizPod #81 - interview with Laura Tenison founder of JoJo Maman Bebe

PostedDetails | PostediTunes
play small business podcast now
SmallBizPod #82 - Budget podcast 2009

SmallBizPod #82 - Budget podcast 2009

PostedDetails | PostediTunes
play small business podcast now
SmallBizPod #50 - Martin Webb podcast interview

SmallBizPod #50 - Martin Webb podcast interview

PostedDetails | PostediTunes
play small business podcast now
SmallBizPod #66 - Dan Harple, entrepreneurship and the mobile web

SmallBizPod #66 - Dan Harple, entrepreneurship and the mobile web

PostedDetails | PostediTunes
play small business podcast now
SmallBizPod #78 - motivation, customers and sales in 2009 with Kevin Kelly

SmallBizPod #78 - motivation, customers and sales in 2009 with Kevin Kelly

PostedDetails | PostediTunes
play small business podcast now
SmallBizPod #71 - Alastair Mitchell of UK Web 2.0 startup Huddle

SmallBizPod #71 - Alastair Mitchell of UK Web 2.0 startup Huddle

PostedDetails | PostediTunes
play small business podcast now

PARTNER PROMOTIONS

If looking to boost your businesses performance with promotional marketing, travel incentives or incentive schemes get it touch with NDL Group