Has the dotcom boom really ended? Or, did we not learn from the lessons of a not-so-distant past?
Promise North America recently attended the Tech Cocktail Startup Mixology Conference in downtown Washington DC and mingled with the likes of Steve Case, AOL’s founder and former CEO, Alex Ohanian, Reddit’s founder and former CEO who were sharing their wisdom and experience as former start-up companies. The room was filled with people with all kinds of ideas that they hoped to launch online in the near future. Entrepreneurs, tech geeks, social media gurus, and venture capitalists were swarming in the room while ideas were abounding; like an online service provided table seating arrangement services for events such as weddings, or an online service providing clients with business cards with a link to a private profile online. However, one wonders, is this not reminiscent of the dotcom bubble from the late 90s?
When the internet became a common household good, companies saw their stock prices rocket when they added a “.com” to their names. Venture dotcom companies experienced record-breaking rises in their stock prices; they took more risks at lower interest rates that flooded the marketplace with semi-viable business ideas. This combined with the increased availability of expendable cash, a high level of consumer confidence, and increased day-trading, created a lot of money to invest in the booming industry. The majority of these businesses, relying on “network effect” were then affected by the dramatic fall in stock prices that ultimately caused their demise. What was characteristic about this boom and bust was the sense of new economic invincibility that the World Wide Web imbued business owners, venture capitalists, and consumers alike until the day that it mattered what value the inflated stock prices represented.
Walking away from a day full of mingling with future business men and women inspired by the 28 year-old Redskin jersey clad founder of Reddit, and ever-present aura of Mark Zuckerberg enthusiasts, it made us wonder if the new obsession with social media and the mobile technology revolution does not stink of a future bubble. Perhaps these aspiring business people could learn to listen to consumers before they create and launch their new sites or apps, hundreds of thousands of dollars later. The whole industry could benefit from a co-creative approach whereby all the stakeholders have an input. If the venture capitalists, arguing that community-building is necessary for the sustenance of the tech industry maturation, the aspiring CEOs, and sophisticated consumers brought their heads together, maybe the San Francisco-based techy will better direct his life savings. Too many of these innovative business ideas are not taking into consideration what the consumer actually wants. Unfortunately, the conference, geared toward startups, advised otherwise – get your idea up and out there as fast as possible, get the right sponsors quickly, or else your idea won’t work.
Perhaps what we really needed was Steve Case to reflect back a decade on his own dotcom fiasco and instead say, “what you should really do is think about what you are actually doing”.
For question please email Jenny (jYazdi@pomisecorp.com)
This entry was posted on Friday, 1 Jul 2011 at 10:00 am and is filed under General.
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