[wpietri]

Unfortunately, I think they're damned either way.

Making things that are actually fun is hard, and selling them is harder. Even if they succeed, they'll have a brutal transition period while they learn new skills and build a new market.

But the alternative looks no better. As you say, the well of credulous idiots is running dry. I haven't done any user tests lately, but a year ago our subjects were incredibly suspicious of any Facebook auth dialog. If you asked them why, it was clear that everybody had been burned, and Facebook had become too important a social context to end up looking like a fool.

The only upside I see is that we have a good reminder that that "you can fool some of the people all of the time" is not actually a good entrepreneurial strategy. Even if a hype bubble does get you to IPO.