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The last time there was a slowdown like this one in Silicon Valley, it lasted three years, from 2000 to 2003. Back in 2000, many tech companies were buying pro
by cs702 4y ago
The last time there was a slowdown like this one in Silicon Valley, it lasted three years, from 2000 to 2003.
Back in 2000, many tech companies were buying products services from, and selling products services to, one another. When the flow of fresh capital from VCs and IPOs dried up in mid-2000, money-losing tech companies cut spending to conserve cash, reducing revenues at other tech companies, which in turn did the same, and this dynamic became self-reinforcing process affecting the entire tech ecosystem, first gradually and then "suddenly." Tech companies that had been growing at double-digit annual rates in 1999 found themselves with sudden, "unexpected," double-digit revenue declines a couple of years later. Many tech companies that couldn't make cash last for three years failed during this unpleasant period, including many which had good products and capable teams.
If the current wave of layoffs and revenue slowdowns gradually becomes a self-reinforcing process affecting the entire tech ecosystem, it could take a long while for the layoffs and revenue declines to end. These things can take a life of their own, and individual companies can't stop it, because they must cut spending to survive.
- gilbetron 4y agoWhile it may end up being like the dot com bust in the next year or two, right now it is nowhere near what it was like then, having lived through it. It was crazy and grim and just kept going. So far, this year, it just seems like a correction from the massive amount of money dumped into the economy in 2020, plus the insane idea that the changes to people's lives during Covid were going to be permanent. Now, within the Crypto market, yes, that is a lot like the dot com bust. I'm just wondering what the FAANG of crypto will be!
- ghaff 4y agoCrypto seems very reminiscent. Some, both grifters and otherwise, made out like bandits while most of the hoi polloi took it in the teeth.
- ericflo 4y agoI think you're forgetting 2008 and "RIP Good Times"
- ipqk 4y agoWhich lasted for like all of 6 months.
- theGnuMe 4y agoCan you name some example companies? I had thought that the .com implosion was more about consumer Internet sites (i.e. Portals) than business to business. There was a lot of VC funded advertising $$$ that went straight to Yahoo. The canonical examples being WebVan and pets.com
- ghaff 4y agoEMC, Sun Microsystems, Cisco... Where do you think all the companies selling to consumers got their (expensive) hardware from?
- theGnuMe 4y agoEMC, Sun and Cisco are basically still around in some form (Sun was acquired by Oracle in 2010; Dell bough EMC in 2015 for $67 billion) and the .com implosion didn't nuke them.