What’s behind the social startup decline?

Fewer and fewer entrepreneurs are starting social startups. Why? Fizzling IPOs and disappointing return on investments mean that social is no longer the investor darling it once was. The facade has fallen.

While some have warned against a coming social media bubble, it took volatile social startups like Groupon, Zynga and Facebook to make up-and-coming entrepreneurs think twice about starting a social-centric venture.

Social has traditionally been about user numbers first, business model second. It’s for this reason that analysts estimate Facebook stock to be at least 76% overvalued.

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