[sidsavara]

Very broadly I agree - but I don't think it's often "me-too" companies because people think "Oh Digg is cool, let's make another Digg."

Rather, I think people always look to RescueTime, or Digg, or Twitter and say to themselves "Hey look, this part of it sucks. I can make this better and make it my own."

In boom times, the competition (Digg/RescueTime/Twitter) is getting lots of funding and praise - so you in turn, marketed to investers as "RescueTime meets X" get funding because the market is already proven.

In bust times, there is culling of the herd, and if you haven't got something to show for yourself, and are very similar to another company - well, everyone prefers winners. So you get less funding, fold, or sold off.

There aren't 10 wannabe Techcrunches because they want to be like Techcrunch. There are 10 wannabes because they believe they have something different that's better.