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You sweet summer child! First, this thing hasn't even started. My fellow vets of the dot com bust will remember that period in the summer of 2000 where we all

You sweet summer child! First, this thing hasn't even started. My fellow vets of the dot com bust will remember that period in the summer of 2000 where we all called it "the correction": the sentiment was that some companies that never should have been funded in the first place would (obviously!) perish, but that those companies that "made picks and shovels" would endure. (A Gold Rush-era metaphor that I heard countless times.) At least in 2000, that optimism turned out to be misguided: when there are NO MINERS AT ALL there is little need for picks and shovels -- and the big tech companies all saw their businesses severely adversely affected by the end of 2000. And of course, it took years to find a bottom: the bust went so deep that EVERY significant tech company in ~2000 went through layoff after layoff after layoff over the first half of the next decade, as documented by the HN of the day, fuckedcompany.com[0]. Yes, the housing bubble started to form mid-decade, but tech itself hadn't really meaningfully recovered when 2008 arrived (and this famous Sequoia memo!) -- and it was only from the embers of THAT bust (broadly deeper but much less acute in tech) that the next bubble began to form. So in terms of now: it's hard to know where this thing is going, but there are more parallels (to me) to the Dot Com Bust than to the 2008 Recession. I expect this thing to run pretty deep in tech, and I think some sectors (ahem, web3) may well face extinction. If it does run that deep, you will only know that it's over in hindsight: it will take years to recover, and it's only when everyone stops thinking about it that the seeds of a true recovery will be planted. So, get comfortable: it may be a while. One final note. Back in the depths of the bust (maybe 2003?), I saw a bumper sticker on the 101 that stuck with me: "Please God, Just One More Bubble." I remember thinking at that time that there would be no more bubbles forthcoming -- that nothing could possibly be as frothy as what I had lived through. I was wrong, of course, and I really hope the driver of that car cashed out on their NFT marketplace or whatever! [0] https://en.wikipedia.org/wiki/Fucked_Company https://en.wikipedia.org/wiki/Fucked_Company

jupp0r 4y ago
Thanks for writing that up! I was still in high school during the 2000 crash but I still think some things are different today. There are miners (to use the shovel terminology). They are watching Netflix series, running businesses, drive electric bikes around, monitor airplane traffic and all sorts of things. The internet today is just fundamentally required for so much of the economy to function that tech companies are much less bound to crash than in 2000.
VirusNewbie 4y ago
I don't even know how you can compare the recession of 2001 to now. Apple has literal hundreds of billions of cash reserves and is printing money. Pets.com had almost no revenue. These are not the same thing.
- dmitrygr 4y ago
  Don't think Apple, think Open Sea or Bitfinex
  - babyshake 4y ago
    OpenSea has a fine business, just not a $50B valuation or whatever nonsense they are claiming.
- foobiekr 4y ago
  There are plenty of pets.coms running around right now. They have revenue but are structurally poor businesses with terrible unit economics which is why they constantly announce entry into new markets that will go nowhere. Uber, Lyft, … there are tons of these. Go look at the cash flow statements for many of the hype companies and realize they buying revenue isn’t the same as having a company.
subsubzero 4y ago
I was pretty young when that crash happened but lived in Palo Alto during that time period and knew a few unlucky souls that succumbed to layoffs that were everywhere. It was absolutley brutal to put it mildly, the exodus out of the bay area was so bad you could not even rent a uhaul truck as they had all been snatched up by people leaving. I remember stories of some people declaring bankruptcy on stock options that were worthless and owed the govt millions that they could never pay. Or other stories of engineers who at the time "foolishly cashed out"(why would you sell your shares when stocks keep going up!) and got lucky. For the survivors it left mental scars and a decent number of people left tech altogether as the experience was so bad. But it was mainly confined to tech so this drop seems similar, one huge difference was a majority of tech companies back then were not profitable and never would be, banking on "page views" as the golden metric which to rate a company, contrast this to today where many tech companies are printing cash and extremely profitable. So somewhat different and somewhat the same.
- rablackburn 4y ago
  > one huge difference was a majority of tech companies back then were not profitable and never would be, banking on "page views" as the golden metric which to rate a company something something "monthly active users"...

jupp0r 4y ago

Thanks for writing that up! I was still in high school during the 2000 crash but I still think some things are different today. There are miners (to use the shovel terminology). They are watching Netflix series, running businesses, drive electric bikes around, monitor airplane traffic and all sorts of things. The internet today is just fundamentally required for so much of the economy to function that tech companies are much less bound to crash than in 2000.

VirusNewbie 4y ago

I don't even know how you can compare the recession of 2001 to now. Apple has literal hundreds of billions of cash reserves and is printing money. Pets.com had almost no revenue. These are not the same thing.

dmitrygr 4y ago
Don't think Apple, think Open Sea or Bitfinex
- babyshake 4y ago
  OpenSea has a fine business, just not a $50B valuation or whatever nonsense they are claiming.
foobiekr 4y ago
There are plenty of pets.coms running around right now. They have revenue but are structurally poor businesses with terrible unit economics which is why they constantly announce entry into new markets that will go nowhere. Uber, Lyft, … there are tons of these. Go look at the cash flow statements for many of the hype companies and realize they buying revenue isn’t the same as having a company.

subsubzero 4y ago

I was pretty young when that crash happened but lived in Palo Alto during that time period and knew a few unlucky souls that succumbed to layoffs that were everywhere. It was absolutley brutal to put it mildly, the exodus out of the bay area was so bad you could not even rent a uhaul truck as they had all been snatched up by people leaving. I remember stories of some people declaring bankruptcy on stock options that were worthless and owed the govt millions that they could never pay. Or other stories of engineers who at the time "foolishly cashed out"(why would you sell your shares when stocks keep going up!) and got lucky. For the survivors it left mental scars and a decent number of people left tech altogether as the experience was so bad. But it was mainly confined to tech so this drop seems similar, one huge difference was a majority of tech companies back then were not profitable and never would be, banking on "page views" as the golden metric which to rate a company, contrast this to today where many tech companies are printing cash and extremely profitable. So somewhat different and somewhat the same.

rablackburn 4y ago
> one huge difference was a majority of tech companies back then were not profitable and never would be, banking on "page views" as the golden metric which to rate a company something something "monthly active users"...