Chapter 7: The Dot Com Bust

If you are like me, a mid to late 90's baby, you probably don't remember the dot com bust that happened in the early 2000's. For most generations born from 1994 and above, the internet was simply just there. Forever a part of our lives, forever existing within our realm of being.

The internet hasn't been around as long as we might think, and much like trends come and go, the web also had its moment of fame. Instead of it dying out completely, it had what we call a "bust".

Some of the best lessons in life are through hardship and failures, and the dot com bust is a fantastic lesson to learn when it comes to innovation. I was first introduced to the dot com bust by one of my Professors for my Technical Communications major. He had fun and colorful slides that matched the energy of what the dot com bust was about. See, each slide was designed to mimic the craziness of the dot com era, where tons of websites were being created, investors were throwing money, and everyone wanted a piece of this growing trend.....until they didn't.

The slides started with the beginning, or "pre-1995" as the slide stated. This is before the world wide web, and tells of online services from Prodigy, CompuServe, AOL, and Genie. They provided limited online access, and were more of a project for some, rather than a profitable achievement. Then came the "boom" as my Professor wrote, where Netscape IPO was created in 1995 and companies could sell shares of their stock. It became extremely popular, and thus began the crazed selling of stock.

"Insanity" was next, an era between 1997 and early 2000, and people were investing like crazy. Venture capital was flowing in freely, and many smaller companies felt the need to put their business online early. This lead the era into the "bust", and by early 2000, most of the companies that were public went bankrupt. Majority of them blew through their venture capital since they couldn't make enough profit, and had poorly devised business models. By 2002-2005, companies were making a small comeback and were able to grow and spread into areas such as social media. 

So what's the lesson in all this? My Professor wasn't just making good looking slides to keep us entertained, he was showing us how hype and poor business planning can easily break a company. Any innovator who wants to take their innovations to the public, must be ready, and should take note of the lessons learned from the bust.

Some of the key take aways are:

1. Profitability Over Hype: Create a good business model, focus on real revenue, not just growth

2. Adaptability and Smart Spending: Manage resources carefully and be ready to adjust

3. Purposeful Innovation: Good ideas must solve real problems and be able to expand with social trends

So when you have a good idea and feel pressured to bring your innovation to public, take a moment to remember the dot com bust and the lessons that the world learned in that moment. 

Every great innovator starts with a good plan.




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