We started the course at eToro after 40 employees (out of 200) asked to join. I had to split the team into Winter and Summer sessions. I made sure the group included programmers, product guys, marketers, sales people and players from every other department. Some companies’ CEOs would run a sales course. In this company I run a course teaching people how to dream and disrupt.
We opened the original course notes Class 2: Party Like it’s 1999? Everyone in class was able to edit and add comments as we went along. Prior to the course I’d asked the students to read the course notes and add one comment.
This second class deals with the Dot-com bubble, and implies that in order to understand the current (social) boom you need to understand the past. We started the class with the funny video Here Comes Another Bubble . We continued with a quick overview of the ’90s. One of our employees who was born in East Germany told us that until the Berlin Wall fell they had never seen a telephone, TV set or computer that this technology on the other side of the wall was mind-boggling.
Then the mania started: September 1998 – March 2000. I remember those days. I was 17 and had started trading in the biggest bull market in history. Everyone believed that the “New Economy” would replace the old “brick and mortar” economy and a lot of people started believing we were entering a brave new world. Check out this amazing CNN Special Report on dot.com Bubble of 1999 .
The PayPal mania specifically is really interesting, in that PayPal’s original idea involved beaming money to people over PalmPilots and other PDAs. It was voted one of the worst 10 business ideas of 1999, which is saying a lot. Their salvation was simply giving away $10 for opening an account and for each referral, and the rest is history.
Then the bubble burst, destroying a lot of companies and leaving a lot of scars for people who were once, if only for a short while, rich or ultra rich. I learned my lesson during this time, having lost most of the money I made. Once I was able to repay all my loans I took to trading options on the NASDAQ, and kept some profits for the coming winter.
Everyone in technology was devastated. Their world had collapsed. Outsiders largely proclaimed, “We told you its a bubble!” and went on to create a much worse real estate bubble, and we all know how that played out in 2008. But the interesting long-lasting effect was on the Silicon Valley, where the old beliefs of thinking huge and building big were replaced with cautiousness, practicality, leanness, avoiding advertising budgets and a focus on viral coefficient, computer experiences rather than human interactions (which changed when Facebook started), 100% product focus and reinvesting. But the most horrific lesson by far was :
“Finally—and this was the overarching theme—you shouldn’t discuss the future. That will just make you look weird and crazy, and, well, you just shouldn’t do it.”
I think it’s just a matter of time until a new generation starts dreaming again, thinking and talking about the future and changing the world. When that starts we will see the new economy emerge, this time for good, with a focus on replacing old values of P/E and operating efficiency with great products that focus on social interaction and openness.