There has recently been talk about how the start-up world is in a
bubble. As can be imagined opinions vary widely, and unless there is a crash in valuations of start-ups we cannot really be sure there is a bubble. Bubbles can only be defined after they burst. What can be said is that we are in a time of start-up mania, entrepreneurs and the guys on the street all dream about being the next
Instagram. The climate is very similar to people telling me to invest in AOL and Netscape fifteen years ago.
How things are similar is the way things are valued. When the Internet Bubble was expanding in the early 2000's it was all about page views, not actions, not purchases but about page views. Page views were the bees knees since the primary model of revenue was display advertising. The days of getting $50 per thousand banner displays were a heady thing, analytic software really didn't exist and people really did surf, unlike now where the spend there online time in self-constructed
silos of social media and blogs. The new yet similar way things are being valued is the app download metric.
Companies send out press releases as to how many people have downloaded their app. Again, it is all about real estate not how the real estate is being used. It is a strange model when potential is worth more than real earnings, and risk is downplayed. We also never hear about daily usage, we just hear about registered users and downloads. I want to know how many minutes a day an app is used by a user, and what kind of media is consumed and what is purchased. One million installs of an app means nothing if it is only used for 10 minutes a day by 20,000 users.