Zero to One’s Book Review part II
2.Party Like It’s 1999
What does everybody agree on ? “Madness is rare in individuals-but in groups, parties, nations, and ages it is the rule,” Nietzsche
We know that people doing business is to gain money not to lose it. But not if it comes to “new economy” that accepted page views as more authorative, forward-looking about how financial in businessman eyes, not just profit. But if one collapses, they called old belief as a bubble. It can grow bigger and can popped in second.
People was going crazy in 90’s. Before, economic major the most popular major in university but it changed. Thanks to internet, computer science were dominant in nearly 90's. From 1993 we had Mozaic Browser, giving regular people to get online. Then Netscape in 1994, which released navigator browser. In August’95 even though it wasn’t profitable but it can IPO. Within 5 months Netscape stock was from $28 to $174 per share. Then Yahoo! came in ’94 with an valuation $848 million. Amazon followed in ’97 at $438 million. Skeptics questioned the earnings, and market going crazy.
But when crisis started in the middle of 1997, all financial sector were going down, from Asia to Europe. So because of there were nothing else seemed to be working, The Old Economic couldn’t handle the challenges of globalization. Because of that The New Economy of the internet was the only way forward.
Mania: September 1998-March 2000
Dot-com mania just from September 1998 to March 2000, it was Silicon Valley gold rush. People left their well-payed job to found or join startups. The most successful business seemed to take opportunity in another business model with the one that caused their losses. That time in example, puting .com in your name it can double your value overnight.
Pay Pal Mania
When Peter started Pay Pal he didn’t believe to his own company, but people in Silicon Valley always believe what will become next. The environment let people think sanely and begin to seem eccentric. At least Pay Pal have a grand mission : making a new internet currency to replace U.S dollar.
At first, the company using e-mail to make people could log in and easily transfer their money. But they didn’t get costumer so they paid people to sign up. But it not took for long — because if you paid people to buy your product we will grow cost while the costumer grow too. Then they went to a funding opportunity.
The NASDAQ reach higher point in March 2000 and the crashed in the middle of April and bottomed out in October, that interpreted market’s collapsed and divine judgement against technological optimism in ’90. Several businessman back to brick (property) business, before they optimism about moved from brick to click business. But not long from that brick business collapsed too.
The entrepreneurs who stuck in Silicon Valey learned four big lessons from the dot com crash that still guide business thinking today :
- Make incremental advances
Small, incremental steps are the only safe path forward.
2. Stay lean and flexible
Unplanned and try things out, doing experimentation.
3. Improved on the competition
Start your business with already existing costumer, build your company by improving on recognizable products already offered by successful competitiors.
4. Focus on product, not sales
Product requires advertising or sales person are not good, the product of technology have to go viral growth.
How much of what you know about business is shaped by mistaken reactions to past mistakes ? The most contrarian thing of all is not to oppose the crowd but to think for yourself.