Who lived through first Dot Com Bubble? Any stories to tell?

New / Mktg
jDaC21

New Mktg

BIO
Gadget guy Silicon Valley
jDaC21more
Aug 30, 2017 51 Comments

Just reading through Boo Hoo, a book written in 2001, illustrating the largesse of e-commerce startup Boo.com and how they spent $170m in less than two years most of it just to launch their first website.

Also watched startup.com a few years ago (https://youtu.be/ibuiUXOTE4M).

As a two time startup founder (post-2000), I find these stories fascinating.

Just wondering what differentiated those that succeeded / survived from those that failed
?

Some of the things seem ludicrous these days like:
- going IPO just after product launch
- outsourcing most of the tech development to over a dozen companies without proper version control
- going big from day 1 with TV commercials and multi country offices, and feature creep.
- hiring like crazy without any real revenue even for positions like customer support (Boo.com hired like 30 customer support staff in London before even launching)
- BD and managing consultant guys managing R&D

I realize that the concept of going lean was only a lesson drawn much later, but I'm curious if it's that what distinguished some of the winners (like Amazon) or was it just pure luck?

Would love to hear some stories.

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TOP 51 Comments
  • Microsoft / Mgmt FUDOne
    Invested in one venture with 50% of my savings.

    Sold it to another company for a neat profit. Invested all that money (roughly $5 mil back then) into a 2nd venture by a Kansas based Indian guy (talked into it by a common friend), along with 4 other people, lost everything and the indian chap is absconding since. Friend who talked me into investing ended up taking his own life, he lost all his savings and investments in this.

    Moral of the story: never invest in IT ventures with co-founders who are from the southern part of india
    (I know I'm gonna get hate for this, but I've seen a series of such things happen repeatedly with others, with chaps from the same regions of india)
    Aug 30, 2017 11
    • Microsoft / Mgmt FUDOne
      So you're blaming for accredited investors for being scammed? Wunderbar!
      Aug 30, 2017
    • Microsoft / Mgmt FUDOne
      So just FYI, this thing happened in Europe. The scammer was/ is a US citizen who is absconding, has a international warrant out for his arrest.
      It was an actual legit business, so before you jump to conclusions and be judgmental (which you so obviously seem to be), ask more questions and listen: read the answers. Don't be a jerk.
      Aug 30, 2017
    • Microsoft / Mgmt FUDOne
      Racial profiling? Read the last paragraph I wrote. 10 times. Then come back and provide your not so expert comment advice.
      Aug 30, 2017
    • Microsoft LaborDay
      India is the second most populous country with 1.2 billion people, so odds are, there are more Indian scammers than American scammers.

      This doesn't mean that you're any more likely to run into an Indian scammer.

      Sounds like you just had bad luck and have a bad case of confirmation bias. If I'd been scammed by a Brit, chances are, I'm likely to pay closer attention to stories about British swindlers. Human nature.
      Sep 1, 2017
    • Microsoft / Eng
      Gintama

      Microsoft Eng

      PRE
      Microsoft
      Gintamamore
      The way is described sounds like those Nigeria scams . Of course I have several Nigerian fiends and they are not scammers ( although I notice they never pay for beers ....)
      Sep 16, 2017
  • Facebook public
    It was fun as hell, I miss it. Will likely never see anything like it again. Money was meaningless, parties were epic, execution was optional. I bought a boat.
    Aug 30, 2017 4
    • Microsoft / Mgmt FUDOne
      ^^winner
      Aug 30, 2017
    • Facebook public
      Not even close. Think of it this way, goog since ipo is up roughly 10,000%? Msft was up 65,000% by '99. Everyone was overnight rich and the future seemed infinite for most. Today people are focused on real business outcomes, things like diversity, and PR. In the 90s you could raise 10m with a 10 slide powerpoint and later that night hit a party with a list performers, tons of "refreshments" at some ceo of terrible.coms house and raise another 1m. Another example, I bought my first porsche from the office admin. It was only 2 months old but she decided she wanted a different color. It's hard to describe but it's not even close to today. One piece of advice: be saving for the rainy day. You party during the boom but get rich during the recession :)
      Aug 30, 2017
    • Amazon Flux
      How do you get rich during a recession?
      Aug 31, 2017
    • Facebook public
      What do you mean? During a recession everything is on sale and money is cheap. You take all the cash you've been hoarding and buy up businesses, real estate, and stocks at bargin basement prices.
      Aug 31, 2017
  • Amazon
    7Zark7

    Amazon

    PRE
    HP Inc, Juniper Networks
    7Zark7more
    Lots of stories, though a few would out me, but some of my favorite anecdotes include: 1) nearly being fired for asking my dot-com CEO if we were ever going to evaluate our projects for strategic purpose/ROI instead of just 'doing' everything; 2) going to the same company's holiday party the day after the first big round of layoffs, and figuring out how many salaries could have been covered by the ice sculpture budget. Oh, and FuckedCompany was a great site - the day my company appeared there was ironically celebrated. I could go on and on...
    Aug 30, 2017 2
    • New
      jDaC21

      New

      BIO
      Gadget guy Silicon Valley
      jDaC21more
      OP
      Seems like another story of wrong people raising a whole lot of money for the wrong sort of reasons.
      Aug 30, 2017
    • New Wumm63
      Ah, good old FuckedCompany. Wonder what Pud is up to...
      Aug 30, 2017
  • Microsoft Borg 37B
    A lot of people borrowed against the future value of their MSFT options. Two million dollar houses when that bought you waterfront mansions. Ferraris. Fractional jet ownership. All financed on the future value of stock options awarded at $50, $60 and so on. The bubble burst after MSFT lost the antitrust case and the judge ordered MSFT broken up. Obviously we settled and didn't break up, but the stock plummeted. Homes lost. Marriages lost. I know a guy with a 28 car Porsche collection who had to sell all of them to cover his margin loans. I know a guy who went from a 8000sq foot Lake Washington mansion with indoor pool, dock, and 50 foot boat to living in a lightly remodeled 1300 foot 1952 flat top in Lake Hills neighborhood (think Mtn View off Middlefield Road south of San Antonio). Me, I lost a million in the market. Thank god for bonds.

    There are a lot of people today borrowing against the RSU grants. Dumb. Counting chickens before they hatch.
    Aug 31, 2017 2
    • Microsoft / Eng fucov
      Yeah, this feels like another bubble. I am actually looking forward to a collapse. I miss the days when people who were in software engineering were in it because of the passion. College students now only take it for the money
      Aug 31, 2017
    • Microsoft AchieveMo
      Yup and those are the software engineers who suck too.
      Aug 31, 2017
  • Apple oldjackson
    Small IT team working for facilities. Corporate IT wouldn't give us access to the data center to put in our server. They didn't realise our facilities coded badges opened any door. We put out server in there and a fridge full of beer. Which they could see but couldn't access. Periodically we would swap it out for a different beer so that they knew we were in and out all the time. Really pissed them off because they didn't know how we were doing it.
    Aug 30, 2017 0
  • Chase / Other
    qcRX88

    Chase Other

    BIO
    Quality Assurance with emphasis in Accessibility Compliance
    qcRX88more
    I worked for a DSL network provider (provided DSL to ISPs who resold to consumers). This was still the age of small mom & pop ISPs. It was amazing to see the ripple affect in the market. People were losing jobs, cancelling their internet service in mass, causing these small ISPs to go out of business so the company I worked for lost revenue and layed everyone off en mass in a matter of weeks. The real nail in that company's coffin was a merger deal with Verizon who backed out at the last minute.
    Aug 30, 2017 3
    • Amazon Flux
      What were causing people to cancel their Internet?
      Aug 31, 2017
    • New / Other 9tzgr8
      I worked for that company, too!! Bay Area? Those were the days... Until they were no longer the days.
      Sep 12, 2017
    • Chase / Other
      qcRX88

      Chase Other

      BIO
      Quality Assurance with emphasis in Accessibility Compliance
      qcRX88more
      It was new, people were getting hacked and lost faith in online commerce (for about a year). And other things were happening to the economy I general. It's called the Dot Com crash, but it was a recession that hit many markets.
      Sep 13, 2017
  • Microsoft Friederich
    Sitting across the table from one of the richest three men in the world explaining where his $500M went... In retrospect, actually kind of a funny story, but was a horrible day at the time.
    Aug 30, 2017 10
    • Microsoft / Eng Trotwood
      ^ Gates and Windows Phone?
      Aug 30, 2017
    • Microsoft Friederich
      Not Gates. :-)
      Aug 30, 2017
    • Microsoft / Eng Trotwood
      Well I can see why you're at Microsoft now after a story like that with most likely Jeff Bezos. That's one of those don't stay to tell about it stories. I once had an hour of his time when we won a big hackathon, and we got happy post lunch Jeff, but glad to say I never had to sit with him and explain how an equal amount of $$ to what he paid for jet.com dissapeared into thin air.
      Aug 30, 2017
    • Amazon Flux
      Walmart bought jet, not Amazon.
      Aug 31, 2017
    • Microsoft / Eng Trotwood
      Sorry I meant diapers.com. Bezos and Blackburn bought it after a price war, and then the founder left after a while to start jet.com. There's a nice chapter in Everything Store that talks about it.
      Aug 31, 2017
  • Gen!x / Eng
    XPbr65

    Gen!x Eng

    BIO
    Mehy
    XPbr65more
    Everyone was a genius trade during the dotcom bubble. Even this 21 year old "trader" from Midwest.

    I was making more money trading part time as a 21yr old college grad so I quit my job. Went all in daytrading carrying 10-1 leverage.

    Someone told me about writing options so I would write naked calls/puts on companies about to release earning after hours.

    Wrote puts on MSTR. It whiffed on earnings (remember after hours). Shit went sideways. Hard. My heart was beating so loudly I could hear it. And the options market closes at 4 EST.

    I needed an OD of NyQuil to sleep that night. Lost 70% of my networth on that trade.
    Sep 6, 2017 2
    • Microsoft Facts
      What was your net profit /loss after all that ?
      Sep 7, 2017
    • Gen!x / Eng
      XPbr65

      Gen!x Eng

      BIO
      Mehy
      XPbr65more
      I believe the trade cost me 30k. The rest of the dotcom collapse cost me another 35k (some before MSTR, like COMS & JDSU, some of that after. Even AMZN fucked me then). I walked away from trading with 5k networth
      Sep 8, 2017
  • Scality zRqq57
    I did, working in tech, lost everything after it burst, it was a fun time though.
    Aug 30, 2017 1
    • Microsoft Facts
      How did you lose everything? You'd still have had some money in the bank, right?
      Or did you invest entirely in stocks ?
      Sep 7, 2017
  • Apple oldjackson
    Everybody daytrading too was a huge think. Thinking they were stockpicking geniuses too because everything was going up. Oh and on margin
    Aug 31, 2017 0
  • Microsoft bradste
    I can't top some of these stories, but I was in MBA school from 1998 through 2000. Several of my classmates quit in the summer of 1999 to stay on at their dot-com internships. A couple years later all of them but one were out of a job.
    Aug 31, 2017 0
  • Microsoft 31337h4X
    Good thread. I was an intern at an Amazon pre-cursor and learned that the money came from old rich dudes who had no idea what they were getting into. Hearing "Internet sales" and "website" made them go bonkers to blow their dough on young kids with unproven vision.
    Aug 31, 2017 0
  • Microsoft AchieveMo
    I was in high school and a summer intern at a .com in San Francisco. My last day was a Friday, but they said I can still come to the company picnic on Saturday.

    I showed up for the picnic/party. No one was there. I try calling everyone I knew. No answer. So I went home. Later found out they failed to get the next round of funding. So instead of the party, they just shut down the business.

    Drank and smoked for the first time that summer at company parties. Remember I was in high school.
    Aug 30, 2017 0
  • Microsoft Mtee
    I was an intern. Salary plus free apartment plus free rental car plus stock options. As I was leaving that August of 2000 was in a meeting where I was told the numbers for the quarter were horrible. Same is happening in the crypto currency market right now.
    Aug 30, 2017 0
  • Microsoft / Eng
    Gintama

    Microsoft Eng

    PRE
    Microsoft
    Gintamamore
    I remember I entered a board room meeting and two execs ( both married but not to each other ) they were having sex . They wasted all the companies money with crazy trips abroad ( guess to do what ) and disappeared at though times . I should have used it to get a business holiday in Hawaii goddam it !
    Sep 16, 2017 0
  • Amazon port98
    this is disappointing. during the whole dot com nonsense I worked for a medium sized ISP. it was run by people with a clue so we didn't spend much money at all and actually made a profit.

    no fun at all, unfortunately.

    we did end up getting bought by a larger ISP who had been living the dot com dream. they had been spending money like it was going out of fashion on TV advertising and so we expected them to be massive on the tech side because they appeared to be such a huge company. but it turns out they had 3 servers and their setup was utter crap.
    Sep 5, 2017 0

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