The investment world operates in cycles - things go up and get frothy before they come eventually down. It's the way of the world - always has been, always will be. So, I can say with some degree of confidence that we're heading for another bursting of the dot-com bubble. The signs of doom are increasingly evident - VCs are scrambling to get a stake in start-ups with limited track records; valuations in the M&A market are climbing, and 20-something entrepreneurs are being seen as cool and credible again. Take a look at the video market where several companies have recently raised VC money, including Veoh, which attracted $12.5-million from a group of investors that includes Michael Eisner.
    But perhaps the most troubling indication of  the impending dot-com meltdown is a story in the San Francisco Chronicle looking at the resurgence of the city's South Park district. During the boom, South Park was teeming with well-financed dot-coms willing to pay sky-high rent for office space - when they weren't burning money on open-bar parties and billboard campaigns. The Chronicle story talks about how people are moving back into South Park to the point where it's difficult to get a parking spot. If you're looking for a sign of the apocalypse, just read the first four paragraphs of the story, which have easily been written in 2000 or early-2001. Then, start running for the doors as quickly as you can:

The unofficial meal of the Internet comeback is a bowl of Kellogg's Crispix and some fresh-squeezed grapefruit juice - served with pleasure at the Monday morning "cereal bar" hosted by the six-person Internet start-up Rubyred Labs
A few dozen people gather each Monday at Rubyred's Brannan Street offices in the resurgent South Park neighbourhood, eating ceral and chatting about the latest conferences, latest blog posts and latest Flickr photos.
South Park once heralded as the "town square of Multimedia Gulch" and then nearly abandoned when the dot-com bubble burst, is making a comeback.
"All those companies are going back," said Scott Beale, proprietro of Laughing Squid, a Web-hosting service. "It just blows my mind."

    Well, it blows my mind there is so much enthusiasm within the dot-com world again. It's fun, it's exciting but it's starting to get unhealthy. The end is near! PeterMe, who worked in South Park during the dot-com boom, has an insightful post - including photographs - of what went on and what's happening now.

I just started reading Thomas Friedman's The World is Flat - partly because Steve Rubel had a post about it recently and partly because my father just finished reading it. While I have only read the first chapter, I was immediately struck by the book's fundamental thesis: today - more than any time in modern economic history - the individual is empowered (as opposed to nations and multi-national corporations).
   This is a powerful message, which goes a long way in explaining many of the exciting things happening today. Take Web 2.0 as an example. What makes Web 2.0 different from the dot-com boom is it's possible for individuals to develop a world-class service using a modest amount capital. This makes it possible for people such as 37 Signals' Jason Fried to work from Chicago and quickly create cool applications with little or no venture capital. The power of the individual has lowered the entrepreneurial barriers to entry so you can create a world-class application/service such as Skype by tapping the brain-power of people around the world.
   The power of the individual also explains why blogging has exploded (75,000 new blogs a day or one every second, according to Technorati). Blogs provide people with a digital way to communicate but they also let people build global brands and establish themselves as mini-corporations. This is why Nicholas Carr just "celebrated" his first anniversary in the blogosphere with a post that revealed blogging cost him $1425 (His explanation: "Welcome to the wacky world of citizen media where journalism is an avocation, like fox hunting used to be"). Other examples of economic empowerment are services such as eBay, which has taken garage sales and made them global, while allowing thousands of people to set up their own businesses. Ottawa-based Shopify is jumping into the "individual" market with e-commerce service for Web sites that can be set up in minutes.
    All of these things are tremendously exciting, which may explain why Friedman felt so compelled to write a book shortly after starting a visit to India two years ago. I suspect it will take some time to finish reading The World is Flat given there are so many ideas to think about, but it's not often you run into the right book at the right time.