Is this a joke? Do you realize many dot-coms went under because of the bubble bursting and not being able to raise money in the capital markets? Venture capital money dried up and they weren't profitable so they had no cash.
> Low interest rates in 1998–99 facilitated an increase in start-up companies
> In 2000, the dot-com bubble burst, and many dot-com startups went out of business after burning through their venture capital and failing to become profitable.
Sound familiar? It should, because history rhymes.
A lot of people realized that the dotcom bubble was a bubble well before it burst. The biggest sign was investors pouring money into startups that were sort of inherently incapable of generating the level of profit that would allow them to continue operating, e.g. Kozmo.com.
A big reason the dot-com bubble was bad was because normal people with more to lose were depleting their retirement savings buying stock in stupid companies that recently went public. There are no more IPOs. The public at large cannot participate in this bubble. This financial part of this bubble involves a bunch of rich guys and even richer investment firms. Who cares if these people lose .001% of their net worth betting on startups?
I wish I had more upvotes for this comment. Its crazy to me how many people want to cry bubble 2.0 when all of these companies are turning good profits.
The dotcom bubble was all about people throwing a bunch of money at companies that had no clear or proven plan of success
That sounds like they were a bit uncharacteristic as a dot com in the sense that they had intellectual property that survived the company that was actually worth something and executives that weren't half bad that Amazon later took over as well and a target market that was actually somewhat real. Sure, it failed and VCs got greedy and pushed for an IPO. But then ten years later Amazon acquires the tech, and the people, and builds a decent business from it.
A lot of dot com companies during the bubble had none of that. An MBA with a silly/incoherent idea and a half baked website were all it took to get funding. VCs were throwing money at anything that had a website at some point. They were desperate to get some of the action. Most of those companies were literally created to tap into that kind of stupid money. The dot com bubble was VCs throwing money at absolutely bat shit crazy stuff; and then losing badly when the bubble burst. This wasn't that bad in comparison.
I mean WeWork isn't that different. Or Uber. Or Air BnB. Rapid growth funded. Arguably all cases where the investors maybe got a bit too greedy but also companies that are generating real revenue out of markets that do exist with a service that consumers are willing to pay for.
VCs in the dot com bubble were not confused about whether companies should make money or not. VCs knew exactly what they were doing: making money for themselves. They were raking in millions by pumping up companies and dumping them on the public market. A classic ponzi scheme. Eventually the public market realized what was going on and the party stopped.
I'm guessing you think that because you didn't experience the dotcom era first hand. Companies that have raised huge sums of money can go under. It's not happened recently but when it does it'll be horrible to watch. I'm not suggesting that we're in a bubble either - the fact is that companies die for a bewildering variety of reasons, and it is inevitable that one or more of the unicorns will die eventually.
dotcom was a completely different situation. VC money flowed to companies that had no meaningful revenue. FAANG, on the other hand, are printing billions of dollars per month.
The bubbles are entirely different. In dot com days companies were founded, funded and even IPO'ed with no business plans, few/no customers, no product-market fit and mostly grounded in "build it and they will come" notion. Quite a large proportion of dot coms was made up of companies that should never have been companies in the first place.
While there has certainly been some optimistic investment (looking at crypto in particular), the problems are nowhere near as systemic as they were in 2000. By and large, companies have products, products have customers, customers pay money. Clearly valuations have run way too high and are correcting, but it's a different unwinding process vs "umm, turns out there's nothing here."
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