Silicon Alley/Valley: Time to Lose Some Weight

Weight Gym The economic climate that we are in is having an effect on Silicon Alley/Valley. Many of the companies (dot com or others) are generating revenue through subscriptions, advertising, affiliate and such, which is being affected by the cut-back in spending both from consumers and corporations (ad spend or otherwise).

Om Malik posted on Why Silicon Valley Should be Worried which you should certainly check out. Upon Google’s Q2 announcement today, the stock plummeted 12%.

While I do not want to go through a long recession or have my family be negatively impacted, I do think that this is good for Silicon Alley/Valley. There is a lot of smoke and mirrors as to what is happening on the street level and who is really generating meaningful revenue. We’ve got top bloggers/Internet Celebs that walk around conferences like they are Brad Pitt and everyone wants to talk to them… but behind the curtains, their companies are having serious problems. Entrepreneurs are getting a false sense of what and WHO are real.

We all can read TechCrunch and other major startup news sources, but at the end of the day, many of these companies are going to become vaporware or face extinction fairly quickly. This is healthy and I welcome it.. .. and we all can learn from it.

When the economy picks back up, the strongest will survive as Darwinian Theory will prevail. For now however, Silicon Valley/Alley must tighten up and brace themselves for the economic environment. Lets see who survives, maybe I should launch my Dot-Com Vulture Fund sooner than later?