I concur with your counter-argument. I'll add that one of the reasons we've seen such a huge increase in startup activity and entrepreneurship in the last 4-5 y

I concur with your counter-argument. I'll add that one of the reasons we've seen such a huge increase in startup activity and entrepreneurship in the last 4-5 years is the fact that getting a startup from an idea to an Internet scale web service costs practically nothing now. 4-5 years ago a startup (like iLike) had to spend millions up front on server and infrastructure costs. Then the ongoing opex costs for serving millions of users were huge. This has shifted radically. $150k is TOO much money for many ideas and the opex costs have continued to plummet. The recent announcements by both Amazon & MS on lowering (almost eliminating for many scenarios) ingress and CDN costs (http://www.talkincloud.com/amazon-web-services-cuts-cloud-transfer-prices/ http://www.talkincloud.com/amazon-web-services-cuts-cloud-tr...) are just harbingers of this. In fact, it could be argued that any sort of economic contraction could increase the rate at which these costs decline, further enabling great ideas to get traction via startups.