By 2000 everyone knew there was going to be a big correction. Few accurately imagined how big. It was like going to the doctors because you knew something was 'a little off' and finding out that you were going to die in three months. Then talking to all your friends and realizing that everyone you knew had the same disease.
Initially many thought it would be similar to the early 90s recession. I.E. A few layoffs with everyone getting hired back again two years later. It wasn't until 2002 that people realized that springtime wasnt coming back.
It wasnt just places like pets.com that crashed. You had every single non-tech company simultaneously scaling back IT initiatives. At the time there was still a large cohort of management types who considered the Internet more of a fad than a new paradigm. These types took full advantage of the shifting winds to cut deeply into anything tech related. This broad overcorrection did a massive amount of damage to the industry.
You can still see the impact crater. Remember the big talent shortages during 2008-2012? Thats because you no longer had a cohort of mid career professionals to draw from. Only the thin number of people who survived the collapse and a bunch of novices who were just getting started. Everyone was missing that valuable group of mid career 8-12 years of experience etc... Basically a generation of careers strangled. Which is why you'll often see no sympathy for the 'talent shortage' complaint. Five years after cutting everything and leaving people to starve you have the same cohort of managers demanding to know "where are all the people with five years of recent experience"
Your cohort point is particularly insightful. I had just started my career in 1999 .. I had a bad feeling about the situation and went to grad school right away (after a year). Was a good move at the time because a year or two after I started, good programs had a crazy number of applicants (which of course, raises the bar to get in). Other than the grad school crowd and people who braved unemployment, what did these professionals do? Get out of tech completely?
Yes in many cases they got out of tech. One of the nice things about tech careers is that your floor is most other people's ceiling. Having tech skills in the early 2000s created a large gap between you and other office workers. Imagine if being able to read/write was a rare skill. It would make you generally competitive in many areas, because you could learn and communicate better than your peers.
I went into banking because I already knew a few people in the field and they were desperate for people. Did really well, set a bunch of performance records, put on track for various promotions/advancement. Strongly considered never returning to tech despite it being my passion. Eventually I couldn't stay away from tech, but it took some time.
It also discouraged many new students from entering CS programs. This is why the 'talent shortage' lasted so long. It wasn't just a mass exodus of existing tech pros, but also a sharp decline in people pursuing tech careers. The high school class of 2002-2004 was much less likely to consider pursuing a tech degree. This is the reason you can't find piles of skilled/cheap early career programmers with 5 years experience in 2012. That means they would have graduated in 2007 and selected their undergrad program in 2002-2003.
Dot-com I worked for went down hard. Sysadmin was reading management's email and telling people in advance they were going to get fired. Went from massive office to nothing in just a few months.
Practical advice: save money and live below your means. This will let you survive the next bust, whenever it happens, much better. It will also help you survive a non-systemic layoff, and will help you find better jobs... it's pretty much always a good idea.
The biggest issue right now is rents. I have 2-3 friends who just signed 1 year leases for north of 3K for 1 bedrooms. My own evil apartment complex (shitty place but Mountain View so what can you do) raised my rent and said I could go back to the lower one if I sign another lease. While your advice is sage, it isn't practical.
People say there is a bubble, but Marc Andreessen is right that the situation is completely different now. When we started in 1998, our whole startup was on one dialup line, as a T1 was really expensive. We had to take turns downloading files. This was in San Mateo, California, not the middle of nowhere. The sysadmins once put out a request to the developers one time to physically show up and help move all of the servers. Our colo site got mad at us because we packed so many servers in that it overtaxed their air conditioning. Who buys their own servers now?
Now everybody is connected. You really can expect a huge number of normal non-technical people to be able to use your website to do everyday mundane tasks like hail a cab or order food. As Marc points out, all the stupid ideas from the bubble all work now. In 2000, selling pet food online was stupid. Now people buy so much online that physical retail businesses that sell generic stuff like pet food are going out of business.
Not sure if I can can communicate how utterly strange the internet was to most people in 1998. There had never been anything like it. People knew it would change everything, and they were right. It just needed a decade and a half for everyone to get network, get a client machine they liked (iPhone), and learn how to use it. I think Marc is right: this is the deployment phase of the technology. I do not think there will ever be another internet bubble. The next bubble will be in some new technology that does not work yet, like biotech or self-driving cars.
Or, maybe people are now so well-informed and information is in such a tight feedback loop that there will never be that kind of bubble ever again. Bubbles come from ignorance and a slow feedback loop. People forget how hard it was to find information in the past: you literally had to know where to physically go to get it. Now some dude in rural China can find out more about the meeting schedule of subcommittees the North Dakota legislature next week while sitting on the toilet than most people in North Dakota could in 1995 without at the very least making a bunch of phone calls all the time or living in Bismarck and going to the capital ever day: http://www.legis.nd.gov/ I was so confident of that sentence that I guessed that to be true and only searched for the site after writing that sentence: yup, there's an app for that.
Who buys their own servers now? Well that is funny in a sad way. You may be looking at this in ten years and hopping to another lily pad.
Anyone who needs 4 9's or better has some kind of hardware presence even if they are heavily invested in the cloud. Full stack (hardware->development) SAs are a vanishing
breed but I am one of them. I can spend 24k a year on colo with 150K invested in hardware and beat the hell out of cloud providers long term...for now.
So because 10 years later the business models worked, the dot-com bubble doesn't count? All those failed companies didn't happen, all those jobs weren't lost?
We have same human nature, same economic system as back then. Crashes will happen, people will lose their jobs, and "this time is different" is just another symptom of a bubble.
> As Marc points out, all the stupid ideas from the bubble all work now
This is the thing I try to explain to people when they talk about bubble. Back then, Internet was this weird new thing. Now, it's as much a part of our daily lives as eating food.
I was a technical sales manager at a fast growing ISP focused on selling T1, DS3 and "business grade" DSL. The money was good. It felt like we were on top of the world. Embarrassingly, looking back, the movie that best describes our culture/ environment back then was Boiler Room. It's one of Vin Diesel's last movies before becoming a star w/ the Fast & Furious series and it's streaming on Youtube if you're ever interested. Different industry but same vibe. Most of us were recent grads from no name schools. There were also a few dropouts and a few who never attempted college. Depending on where you live, this would be the equivalent of coming out of school in your 20's w/ very few skills to make a doctor's salary almost 20 years ago.
Towards the end, every week for a few months, we'd talk/ read about mass firings or competitors shutting down completely. The writing was on the wall when the CEO brought in the PE guy (who still maintained his role at the PE shop he came from) in as a VP to "tighten things up".I was too young and naive to recognize what that meant but his role was to come in and get the company ready to be acquired or parted out like an old car at the junkyard. Yup, we were being prepared for the slaughter.
That last day was tough. We knew it was coming but didn't know when. Working under that type of environment is a tough feeling to describe. Big cardboard boxes on everyones desk one morning, along w/ an offer to take or leave was devastating & relieving at the same time. I took the offer and used the cash to start a company.
Some never recovered. Some had picked up bad habits (cars, alcohol, coke, fast life) while the money was flowing, making it harder when the cash dried up. I always lived a low key existence. I never appreciated it more than when our world stopped spinning.
A magazine (Fortune, The Industry Standard?) ran an article about the declining prices of dotcom IPOs and included the sentence, “It can go down to zero.” That was correct.
The highways were empty and I spent my time playing Vampire LARP in downtown Palo Alto , or talking with my friends about larping. There were no jobs anywhere and I almost moved out of state. However, I decided to stay and take the consequences. It worked out for me, but I occasionally see some people I knew from back in the day. They never bounced back.
Commercial yes, but housing no. Houses leveled off briefly. It meant that instead of having to make an offer 50% over asking and literally beg in a personal letter to the owners, you could make a 10% over offer and leave it to the agent.
I was in college at the time. I remember people saying during that time, once you graduate with a Computer Science degree, you'll get 45k a year starting salary, easy!
And then the bubble popped and they were like "Oops! Nevermind!"
I was 18 in 2001 and started my first job as a programmer at the nadir of the bust (October '01).
I got the job via some personal contacts, it was in an academic institute and I was making barely over minimum wage (probably why there wasn't much competition for it). It wasn't really even an open position but when I asked around they had the budget to hire someone to help the physics phds with their non-research tasks.
I started studying CS at uni the next year ('02) and it was much easier to get in than previously, cause there were far fewer applicants. By the time I got my first job with a more decent salary it was 2005 and the worst of the bust already cleared away - so I guess I somehow managed to skip it altogether.
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Initially many thought it would be similar to the early 90s recession. I.E. A few layoffs with everyone getting hired back again two years later. It wasn't until 2002 that people realized that springtime wasnt coming back.
It wasnt just places like pets.com that crashed. You had every single non-tech company simultaneously scaling back IT initiatives. At the time there was still a large cohort of management types who considered the Internet more of a fad than a new paradigm. These types took full advantage of the shifting winds to cut deeply into anything tech related. This broad overcorrection did a massive amount of damage to the industry.
You can still see the impact crater. Remember the big talent shortages during 2008-2012? Thats because you no longer had a cohort of mid career professionals to draw from. Only the thin number of people who survived the collapse and a bunch of novices who were just getting started. Everyone was missing that valuable group of mid career 8-12 years of experience etc... Basically a generation of careers strangled. Which is why you'll often see no sympathy for the 'talent shortage' complaint. Five years after cutting everything and leaving people to starve you have the same cohort of managers demanding to know "where are all the people with five years of recent experience"
Btw ... love the hn handle :)
I went into banking because I already knew a few people in the field and they were desperate for people. Did really well, set a bunch of performance records, put on track for various promotions/advancement. Strongly considered never returning to tech despite it being my passion. Eventually I couldn't stay away from tech, but it took some time.
It also discouraged many new students from entering CS programs. This is why the 'talent shortage' lasted so long. It wasn't just a mass exodus of existing tech pros, but also a sharp decline in people pursuing tech careers. The high school class of 2002-2004 was much less likely to consider pursuing a tech degree. This is the reason you can't find piles of skilled/cheap early career programmers with 5 years experience in 2012. That means they would have graduated in 2007 and selected their undergrad program in 2002-2003.
Practical advice: save money and live below your means. This will let you survive the next bust, whenever it happens, much better. It will also help you survive a non-systemic layoff, and will help you find better jobs... it's pretty much always a good idea.
https://codewithoutrules.com/2016/08/08/living-below-your-me...
I'm guessing you have some other budgeting issues?
Now everybody is connected. You really can expect a huge number of normal non-technical people to be able to use your website to do everyday mundane tasks like hail a cab or order food. As Marc points out, all the stupid ideas from the bubble all work now. In 2000, selling pet food online was stupid. Now people buy so much online that physical retail businesses that sell generic stuff like pet food are going out of business.
Not sure if I can can communicate how utterly strange the internet was to most people in 1998. There had never been anything like it. People knew it would change everything, and they were right. It just needed a decade and a half for everyone to get network, get a client machine they liked (iPhone), and learn how to use it. I think Marc is right: this is the deployment phase of the technology. I do not think there will ever be another internet bubble. The next bubble will be in some new technology that does not work yet, like biotech or self-driving cars.
Or, maybe people are now so well-informed and information is in such a tight feedback loop that there will never be that kind of bubble ever again. Bubbles come from ignorance and a slow feedback loop. People forget how hard it was to find information in the past: you literally had to know where to physically go to get it. Now some dude in rural China can find out more about the meeting schedule of subcommittees the North Dakota legislature next week while sitting on the toilet than most people in North Dakota could in 1995 without at the very least making a bunch of phone calls all the time or living in Bismarck and going to the capital ever day: http://www.legis.nd.gov/ I was so confident of that sentence that I guessed that to be true and only searched for the site after writing that sentence: yup, there's an app for that.
Anyone who needs 4 9's or better has some kind of hardware presence even if they are heavily invested in the cloud. Full stack (hardware->development) SAs are a vanishing breed but I am one of them. I can spend 24k a year on colo with 150K invested in hardware and beat the hell out of cloud providers long term...for now.
We have same human nature, same economic system as back then. Crashes will happen, people will lose their jobs, and "this time is different" is just another symptom of a bubble.
> As Marc points out, all the stupid ideas from the bubble all work now
This is the thing I try to explain to people when they talk about bubble. Back then, Internet was this weird new thing. Now, it's as much a part of our daily lives as eating food.
Towards the end, every week for a few months, we'd talk/ read about mass firings or competitors shutting down completely. The writing was on the wall when the CEO brought in the PE guy (who still maintained his role at the PE shop he came from) in as a VP to "tighten things up".I was too young and naive to recognize what that meant but his role was to come in and get the company ready to be acquired or parted out like an old car at the junkyard. Yup, we were being prepared for the slaughter.
That last day was tough. We knew it was coming but didn't know when. Working under that type of environment is a tough feeling to describe. Big cardboard boxes on everyones desk one morning, along w/ an offer to take or leave was devastating & relieving at the same time. I took the offer and used the cash to start a company.
Some never recovered. Some had picked up bad habits (cars, alcohol, coke, fast life) while the money was flowing, making it harder when the cash dried up. I always lived a low key existence. I never appreciated it more than when our world stopped spinning.
And then the bubble popped and they were like "Oops! Nevermind!"
Nowadays that number seems low.
I got the job via some personal contacts, it was in an academic institute and I was making barely over minimum wage (probably why there wasn't much competition for it). It wasn't really even an open position but when I asked around they had the budget to hire someone to help the physics phds with their non-research tasks.
I started studying CS at uni the next year ('02) and it was much easier to get in than previously, cause there were far fewer applicants. By the time I got my first job with a more decent salary it was 2005 and the worst of the bust already cleared away - so I guess I somehow managed to skip it altogether.
After: Ads for used routers and switches and office furniture.