The late 1990’s gave us Ricky Martin, fears of Y2K, and the Great Dot-com Bubble. I was involved with a prototypical Internet startup at the time – the founder and I worked in his basement, and within a few years we had over 300 employees. We were growing by leaps and bounds with no end in sight. But of course an end did occur. Just a few months short of our IPO in 2000, the bubble burst, forcing us to pull back our plans. Our story did have a happy ending. Unlike many dot-coms that were essentially a name and a ridiculous idea, we had customers and revenue and survived the Dot-com purge.
During the Dot-com Bubble, I heard repeatedly that “this time it’s different.” Unlike previous times of insane valuation growth, this time there didn’t need to be fundamentals, this timethere didn’t need to be actual paying customers, this time there really was just more money to go around. It was the Internet, after all! It would change the future! I heard this from people who should have known better, but got caught up in the hype and the ever-increasing valuations.
Whenever I heard the latest iteration of “this time,” I would just remember what my dad, a child of the Great Depression, would advise, “You can’t just create money out of thin air – there has to be a real business offering real value to customers.” And his wisdom proved correct. The many Dot-coms that were hyped only on potential quickly withered and died. But companies that offered true value, backed by a strong team – like Google, for instance – were able to survive and thrive.