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"Startups are raising huge rounds of financing. Valuations are rumored to be in the billions. Everybody and his dog has an eye on (or a hand in) the social media scene of web apps.\nSo are we headed for another cyclical bust, or aren't we?\nWhile some of the numbers being floated around \u2014 Groupon will IPO at a $15 billion valuation! Facebook's worth $50 billion! Zynga raised $366 million! \u2014 are dizzyingly high, high enough to make us wonder if investors, entrepreneurs and journalists aren't all a little out of their minds, there's another set of numbers that balance out the picture. Numbers that, as this journalist and others recall, one didn't hear a lot of during the first dot-com boom-bust cycle: real revenues.\nFor example, Facebook made $2 billion in 2010 through a mix of advertising and virtual currencies. And Groupon's annual revenues, which come from profit-sharing splits with the local and national brands that run daily deals on the site, are between $800 million and $2 billion. \nOf course, naturally, a lot of these reported revenues are likely inflated. But they still represent a pretty big difference from the kind of revenues and business models we saw in the 1990s and early 2000s.\nRare is the startup that continues to operate and raise money without a business model. (Twitter and Formspring are notable exceptions.) No longer is a huge user base enough to net popular support and a ton of funding. No longer is a really great idea alone an adequate foundation for a business.\nAnd no longer are developers and eager entrepreneurs indiscriminately bagging every offer of funding that comes their way. In fact, bootstrapping has become a cool new cult in the startup world. And if they're not bootstrapping, many entrepreneurs might not be interested in taking money for an unprofitable side project. Even Chatroulette, one of the simplest flashes in the pan that is the Internet, has shied away from funding offers, instead trying to find a way to make money.\nAs a group and as a culture, we've learned from our dot-com mistakes, both on the investor side and on the entrepreneur side. We've learned that a little more skepticism and a lot more realism are the best kind of preventative medicine to ward off another crash. We've especially learned, with a few exceptions, to look for business models and find the revenue first.\nStill, the startup market is on shaky ground as we head out of a national recession and into uncharted technological territory. In many cases, it's nearly impossible to say what will make money and what won't. After all, if you'd asked me a couple years ago to invest in a company that sold cartoon livestock, I would have had you locked up.\nSo, what's your take on it: Is the web startup ecosystem headed into troubled waters, or will it be smooth sailing for the foreseeable future? Vote in the poll, and let us know your full thoughts in the comments below.\n\n\n\n\tAre We Headed For Another Dot-Com Crash?online survey\n\n\n\nImage courtesy of iStockphoto, ahlobystov"^^<http://www.w3.org/2001/XMLSchema#string>
<http://mashable.com/2011/01/14/are-we-headed-for-another-dot-com-crash-poll/>