Was it basically the wild west era of the internet where so many people were making websites that it was impossible for all of them to stay around? That’s what it sounds like, but I love to hear from somebody who was around back then.
In: Economics
Any idiot starting up a company could say “Internet” and people would throw money at them to fund the company regardless of whether they knew how to run a business, or even if they had a viable business model. You could have a bad business plan that a funder would normally look at and say “You’re an idiot, I’m not funding this,” but put “Internet” and “dotcom” in front of it, and the money flowed in rivers. A huge amount of money went to lavish spending on offices. $1,100 (about $1,800 today) Aeron office chairs were pretty much standard.
I was buying DVDs from a company that offered drastic discounts and even ran a little contest where you could get about a free DVD a week with no payment. With their prices and free stuff, there was no way that was a sustainable business model. They stayed open, sending me lots of cheap and free DVDs, until they finally ran out of money and closed up near the time of the bust. Some venture capitalist out there bought me a huge DVD collection.
There was this weird idea that if you just got a lot of people using your site, that would magically mean massive profits, but a whole lot of companies never really attempted to devise a mechanism to turn users into profits.
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