What I Saw at the Meltdown (Working for a Dot-Com)

The American Prowler ^ | /21/2005 | Paul Beston

[D-fendr]

Interesting and entertaining. Thanks, Nick...

[clee1]

I wonder if the author and I worked for the same company?

[Bernard]

Ah, the engine behind the Clinton boom years - investors throwing money into "companies" that had no revenue, let alone profits. That dot-com boom was followed by Y2K, which helped hide the economic bad news until the 2000 election.

I worked for a non-profit that dealt with many of the dot-coms during the mid to late '90's, and I was always amazed at the cash thrown into these places. One place burned through 250 MILLION USD in 3 years, and had about 2 million dollars of revenue each quarter to show for it.

Amazing doesn't even begin to describe it. I still have some souvenir t-shirts, though.

[backhoe]

See tagline...

[no_mm]

dam well written piece about what a smoke and mirrors period that was...

[beaver fever]

In 2000, at the ripe old age of 48, I decided to plunk down 7 grand for a Internet multimedia diploma.

I watched the whole new economy melt before my eyes as I rushed to finish the courses. Every new start up had the letters TV in its domain name and a one page press release for a business plan. Revenue? Who needs revenue when you get to cash in your options a month after the IPO?

I remember an old economy analyst who lamented at the time, "I don't know whether I want to live in a world where the P/E ratio means nothing."

Well three months later that world was gone and he was back on familiar terrain. Plus he got to laugh at all the Dot Com Wunderkinder who made fun of him for being an old fogey.

Me, I didn't even get a coffee mug with my name on it.

On the other hand I didn't lose a couple of Mill in rapidly depreciating options either.

[Tall_Texan]

There was a company that built offices not far from us. The name was "Agillion" (as in "how much money can we waste before people figure out we have nothing to offer?"). It was started by two men who had actually succeeded in past high-tech startups so the seed money flew in like manna from Heaven. They built offices in every high tech mecca, offering things to new hires like profit sharing and company-paid vacations in Cozumel.

Anyway, they built plush offices and met everyday to R&D, ummm, something (nobody quite knew what) and talked about alternate management styles apart from the rigidity of the old boss-underling corporate ladder structure.

When they went under, we bought their building for pennies on what it cost them to build it. But, then again, it didn't cost them anything because "venture capitalists" flooded them with money without seeing so much as a business plan since they never really had one.

No doubt, they felt they could live without accountability as they watched their President waltz through the White House with no accountability.

[thoughtomator]

Yep, I had a similar experience with a couple of companies... their behaviors had nothing at all to do with profitability, and everything to do with jacking up stock prices to fleece investors.

[spetznaz]

Bump.

[tom paine 2]

When the price to earnings ratios on good companies like Cisco, Sun Microsystems, and LSI logic got into the hundreds in December of 1999. I no longer considered this as investing but rather gambling and bailed out safely. I had friends who took out second mortgages on their homes to buy into this mess in February of 2000.

[Dont Mention the War]

Thank God that all these people - including the author - quickly got the comeuppance that they all so richly deserved.

Yeah, Mr. Senior Vice President for BS Development, I would like fries with that!

[xp38]

The only coffee mug that counts....

you can put your freeper name on it :)

[GodBlessRonaldReagan]

Great article! A typical dot.com business plan: "We'll sell dollar bills on the internet for 80 cents, and make up the difference with advertising and volume!"

[dyed_in_the_wool]

I don't see the author mention the r & d tax credit that expired as clinton's term ended.
While part of it was people throwing money down a rathole, another part of it was corporations getting big instead of paying taxes.
Which I am absolutely fine with.

[libs_kma]

"Ah, the engine behind the Clinton boom years - investors throwing money into "companies" that had no revenue, let alone profits."

Every time I hear a klintoon boot-licker talk about how good the economy of the Rapist-in-Chiefs years were, I ask them what was behind those years being so good. They'll do either one of two things...not have a freaking clue, or vaguely point in the direction of the dot coms. If they do the latter, I ask what Bubba did to make that happen.

Unless you consider that his veep actually invented the internet (/sarcasm), theres not a whole heckuva lot there.

[beaver fever]

Well it doesn't have my name on it but thanks a bunch.

It'll will go well with my Welcome to Hawaii coffee mug that I've treasured for the last 15 years although I've never been to Hawaii.

At least with the FR virtual mug I get to say I've been to FR.

Hey!....Wait a minute I can actually own that mug and personalized too!

Where's that product page again.........?

[xp38]

http://0cents.com/Merchant2/merchant.mv?Screen=CTGY&Store_Code=0CP&Category_Code=FR

[Lazamataz]

"We'll sell dollar bills on the internet for 80 cents, and make up the difference with advertising and volume!"

Good business plan, can I invest?

[kb2614]

Great article. Everytime I read an article of the 1990's economy, I am reminded of the movie 'Office Space'. It was more realistic the Comrade Olly Stone's 'Wall Street'.