The Period and the commerical domainI finished reading a book called Dot.Con - The Greatest Story Ever Sold by John Cassidy. It analyses the crazy period from 1995 to just before the 9-11 attacks and attempts to answer the retrospective question: What was everyone thinking?
Cassidy wades through the mass of numbers (that causes people like me to see white haze) and the alphabet of the stockmarket to explain how almost everyone in the US seemed to be pouring money into ventures that were valued higher than the giants of industry and yet seemed to have nothing more than a webserver, a plan to sell items ranging from pet food to canned fruit but with a colossal talent for burning money at astronomical rates. The reasons were some sort of self (and peer inflicted) mass hypnosis causing a breakdown of judgement, a massive feedback loop and a misguided belief that the "paradigms" had really changed this time.
He quotes Alan Greenspan as saying that no one can really tell it's a bubble until afterwards. I can see the sense in that. Fads are such that it is tough to keep convincing yourself what reality must be, especially if everyone else seems to believe in it. And especially if they are making astounding pots of money. It didn't help that the big financial guys, the journalists and other "objective" monitors were too involved to have been relied. The skeptics were being silenced as party-poopers and no one wanted to listen to them. Actually, they couldn't be heard for the music was so loud.
It takes a brave man to step aside and stick to his beliefs - for the longer he seems wrong, the more inclined he is to throw the towel and join the rest. What if it was really true this time? What if the dotcoms had found a business model that would yield money in the future for your if only you threw in your weight with them? Quite tough.
The fact that I lasted the book and actually understood some of the points could be taken as a positive plug for the book for anyone interested in those times. The dotcom crash coincided with many of us taking up our first jobs and we never had any firsthand idea of how rosy things must have seemed before that. Now that things are much better, probably it's a good lesson to know. For some reason, I've heard a lot of people already start to speak of the next "crash". I don't know if they're being realistic or just being pessimistic from their experience of 4 years ago.
Incidentally, here's a post on the same topic from Amit's blog