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The fact that nobody's happy with a profitable, but modest bootstrapped company is causing them to abandon these smaller companies.

The abandonment feeds into the consumer mistrust and makes it that much harder to bootstrap the next company.

A good example of an industry that was utterly destroyed by a crisis of consumer confidence was the video game industry.

http://en.wikipedia.org/wiki/North_American_video_game_crash...

>Revenues that had peaked at around $3.2 billion in 1983,[1] fell to around $100 million by 1985 (a drop of almost 97 percent).

It would be extremely unwise to believe the startup industry couldn't be subject to the same problem. VCs are getting uncomfortable with the valuations, the constant buyouts and abandonment are burning out consumers.

Were I not working on a startup of my own, I'd be happy to take upon somebody's profitable but small red-headed stepchild business.



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