EDIT: thanks for all these brilliant responses. Hits great to get the various perspectives. Upvotes are on me!
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I was there, but not in one of the startups. I was working in the SF Bay area at a big company called Sun Microsystems (which has been absorbed into Oracle).
Windows 95 was the OS that got a lot of people to buy a computer and get on the internet. Home computers before then were for hobbyists because it was all Command-Line. Even if you had Windows 3.0/3.1, you still had to load DOS first and then type win.exe to start it up.
The internet in the mid 90’s was very simple. Some websites figured out how to sell stuff, but if you put your credit card into the web page, it was passing the information as clear text (no security), so people were just starting to figure out how to monetize the internet.
One of the most well known sites to hit it big early on was eBay. All of a sudden investors and venture capitalists saw a new market where a small company could make it big and make tons of money. eBay didn’t need warehouses and staff to move merchandise. They just needed people who knew how to make web sites. So investors could put their money into a dozen different startups, and if one was successful, that was good enough.
Just as a side note, you’ve probably noticed that a company like Uber that has been around for awhile has never once turned a profit. It pays its bills with venture capital hoping to be in on the ground floor of a business that owns the whole rideshare market. The dot com bubble was like that but for hundreds of websites. They may have had good ideas, but they couldn’t make them profitable. You could go to pets dot com, but you couldn’t get pet supplies for less money than driving down the street to WalMart or a pet store, and you had to pay big shipping costs, which people today still roll their eyes at. So you had a lot of money propping up startup companies that couldn’t turn a profit. As soon as the VC dried up, they all went out of business.
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