Dot Com Bust: End of an Era
On January 3rd, the NASDAQ started the year at 4131. Confidence was unmistakable and hope from the new internet companies running still high. Hope that they will change the way world worked. Millions had been made in IPOs and acquisition deals by companies who had never made profits, and worse, promised not to in the coming years. World had uncharacteristically welcomed the loss touting with rewards and values unseen before. Never before and since, had the promise of losing money been such a profitable business model for the entrepreneurs!
March 10 saw the confidence reach its tentative zenith at 5048, when over the weekend a rare block sell off of multi billion dollar sell orders for some high tech stocks like Dell, IBM, Cisco etc was lined up. Monday morning saw the haloed index lose 4 percentage points in a day and 9 points in a week by March 15. By the time the year came to a close, the confidence had turned into global pessimism and fortunes were lost. NASDAQ, the index which symbolized the dot com era had lost more that 50% from its peak on March 10th, 2000.
By October 2002, $5 trillion had been lost in the stock market. Many internet companies that promised a new land had sunk without resistance and mark and eye balls, the new currency of business for the last few years, were now rolling at the madness of new era.
A website created. A loss making marketing plan hatched. And investors lined up. In some cases with no sales. In some cases with unheard of rise in sales (eToys from $30,000 to $30 million in one year), loss making nevertheless.
Existence, mere existence.. with an “e” or an “I” was enough of a business model and venture. Ideas were limitless, paper napkins not enough to handle the rough business plans they were most often written on.
As the new era of internet business came to a close, the tech world wondered: was this the end of the road for internet? Or was it just a “cost of education” slapped by the collective global wisdom on the intrepid few for their lack of preparation?
In one conference and meeting after another, the worried technologists and internet experts finally came to the conclusion, that despite the euphoric rise and devastating fall, internet was not a short term phenomenon. It was a game changing innovation for businesses but the world had not figured out its real value and use.
Inter comes to the net
Internet as a mechanism and platform was powerful and humbling for most companies which had ruled the business world over the years. Most tried to jump on the train by simply taking their offline baggage and moving it to the world wide web. Hoping that higher spending and still higher losses will eventually lead to more visitors and therefore more sales and market share had clearly not been enough.
World of innovative thinkers and technologists was rethinking the web. If internet as a platform had to move on viably, it had to be used based on its strengths and the power such strengths gave to a user. User was not merely a consumer and Business just a seller. The new world begged for a new level of democratization and collaboration that the offline business world had not prepared the companies for.
When even the most reticent gets an anonymous voice, one that can be relentless and perpetual, it has to be heard. The customer now has a voice that looks for participation in the business and not just meekly pull out her hand to pay and be treated as another IP address.
In their hurry to sell, the business-world had missed the “inter” in the Internet. Inter in Latin means “within a group”. The other party in the group that was interacting on the net had to be recognized and celebrated. This required changes in the way internet pages and technologies were delivered but more importantly, it meant providing the consumer of internet a way to get what she wanted.
As the customers got the power to express, they posed new challenges. Some were unforgiving, some were altruistic, some charitable and some disruptive. From news to advertising to company strategies, every area had to see a change.
The consumer and the reader on the net who was hitherto met with hostility or indifference or worse patronizingly, was suddenly seen as an ally. An important component of the business strategy. Businesses were mere platforms where the world interacted and produced value for the business. Platform for Participation was truly taking shape. Internet was finally born.
(To be continued)