There are some days when, over a few unforgettable hours, the world seems to shift on its axis. They often involve flames, explosions, and splintering steel. Other days mark a similar tectonic shift, but lack the gunpowder. One happened 20 years ago today, on the morning of August 9, 1995, when the Age of Aquarius and the Dot-Com Boom collided, beginning a move from one generation to the next.
The first event occurred just before dawn when guitarist Jerry Garcia, founder of the Grateful Dead and one of the iconic symbols of a generation shaped by music, love, and community, was found dead at Serenity Knolls, a rehab facility in Marin County, just north of San Francisco. He checked into the site a few days earlier to clean up for an upcoming fall tour. A long-term drug problem, involving mostly heroin and cocaine, had turned Garcia’s diabetic and overweight body into a death trap.
“He was sometimes so incapacitated he couldn’t function,” writes Grateful Dead drummer Bill Kreutzmann in his book Deal: My Three Decades of Drumming, Dreams, and Drugs with the Grateful Dead. While on stage Garcia forgot lyrics, missed notes, and could often seem listless and disoriented. The gray-bearded guru had significant health problems, made worse by cigarette smoking and the stress of the Dead’s tour schedule. In 1986 he nearly died when he slipped into a diabetic coma, but the Grim Reaper wasn’t ready just then. On August 9, 1995 it was.
Garcia was found unresponsive in bed just after 4 a.m. A staff nurse and local paramedics frantically administered CPR but it was too late. Jerry Garcia, who had just turned 53, was dead of a heart attack.
As Garcia’s lifeless body was driven down a winding wooded road to the local coroner, a wildly different scene was occurring 3,000 miles to the east, at Manhattan’s Nasdaq stock market. It was 9:30 a.m. and Netscape Communications was about to go public. Many investors had high hopes for Netscape which, just eight months earlier, had released the first version of its groundbreaking Web browser, helping simplify and transform the online experience. The stock was to be offered at $14 per share, but with so much interest they made a high-stakes gamble and doubled the initial price to $28 per share.
Nothing prepared investors for what happened next. Demand for the Netscape shares was so intense that for almost two hours after the opening bell, trading in Netscape shares couldn’t open, as the bids were overwhelming the asks. When it finally opened, the share price shot up. And up. And up. Within a few moments it hit $71, then later peaked at $75. Venture capitalist John Doerr, an early investor, later recalled: “When I checked the price, I was numb.”
By day’s end Netscape’s stock price had settled in at $58.25, giving the company a market value of $2.9 billion. The firm was only 16 months old and had yet to make a profit, but none of that seemed to matter on the day the Netscape bottle rocket lit up the sky.
The Netscape IPO was to tech entrepreneurs what the Beatles appearance on the Ed Sullivan show was to pop music fans — the astonishing moment when a mental door flew open and a new world awaited, in glorious Technicolor. A decade later, Adam Lashinsky spelled out what Netscape’s IPO meant in Fortune magazine: “More than any other company, it set the technological, social, and financial tone of the Internet age. Its founders, Marc Andreessen and Jim Clark — a baby-faced 24-year-old programmer from the Midwest and a restless middle-aged tech pioneer who badly wanted to strike gold again — inspired a generation of entrepreneurs to try to become tech millionaires.”
A month after Netscape went public, eBay was founded. The following spring, Stanford students Larry Page and Sergey Brin began developing a web-based “crawling” technology called BackRub, laying the foundation for their work in forming Google.
The success of the IPO created the term “Netscape Moment” — a giddy point that marks the starting gun of a new industry and age. Many business historians say the dot-com boom began that day. Soon, everyone was pestering their broker for tips on new companies. Day trading of stocks via online brokers such as Ameritrade or Etrade was considered a career. Companies like Red Hat Software, Akamai Technologies, and theGlobe.com would surpass even Netscape’s heights, seeing their shares rise more than 400% in their first day of trading — an excitement that Fed Chairman Alan Greenspan famously called “irrational exuberance.” Was it? Business was radically and quickly reshaped worldwide by inexpensive communications based on a browser-based Internet. It was the biggest era of U.S. wealth creation in generations. Within five years, the tech-heavy Nasdaq soared from 1,000 to more than 5,100.
Back in San Francisco, the early glimmers of the Internet gold rush meant little to mourning Grateful Dead fans, who had lost an irreplaceable musical god. A spontaneous wake developed throughout San Francisco, where Mayor Frank Jordan ordered city flags to fly at half-staff. Hundreds gathered in Haight Ashbury, the low-rent neighborhood that formed a spiritual base for 1960s counterculture. Some sat on the stoop of 710 Ashbury, the ornate house where the Grateful Dead briefly lived, to console, cry, talk it out, and get high. Thousands of mourners gathered in Golden Gate Park, listening to tapes of the Dead and creating a makeshift shrine to Jerry. That night, Dead guitarist Bob Weir went ahead with a scheduled solo show in Hampton Beach, N.H. “If our dear, departed friend proved anything to us,” Weir told the crowd, “he proved that great music can make sad times better.”
But Deadheads high and low knew better — an age had passed. Senator Patrick Leahy said the news of Garcia’s death felt “like I had been kicked in the stomach.” A month earlier, at the band’s final gig with Garcia in Chicago, they ended the show with the song “Box of Rain” and its prescient lyrics: “Such a long long time to be gone/and a short time to be there.” For Garcia and many Deadheads, that ‘short time’ was over. The group had survived the death of other active members — founding member Ron (Pigpen) McKernan succumbed to an internal hemorrhage in 1973, and keyboardist Brent Mydland died from a drug overdose in 1990 — but the loss of their colorful leader, affectionately known as Captain Trips, was insurmountable. Within four months after Garcia’s passing, the band that had meant so much to so many officially called it quits.
At the closing bell of the stock market, Netscape shareholders were also in a state of shock, although a delightful one. Many were now staggeringly wealthy. Jim Clark’s 20% share was suddenly worth $663 million. Champagne was popped opened. Toasts were made. Heady days were still ahead, but nothing compared to the surreal euphoria of that first day. Netscape’s stock peaked in late-1995 at $171 share, before its market share began to slip. AOL acquired the company in 1999 for $10 billion, but by 2002 it was sliding rapidly and had less than 10 percent of the browser market. In early 2008 AOL pulled the plug on the Netscape browser.
But on that warm August day in 1995, Netheads and Deadheads shared a moment of high drama and importance — one group thrilling to a colorful dawn, the other wistfully watching a darkening sunset. The zeitgeist had changed. The fading notes of the psychedelic age were drowned out by the buzz of red-hot start-ups. LSD was replaced by IPO. Idealism was out; stock options were in.
A few made the connection — the symbolism was overwhelming — and soon after Garcia’s death some black humor began circulating in the Silicon Valley high-tech community:
What were Jerry Garcia’s last words?
“Netscape opened at WHAT?!”
Maybe not so far from the truth after all.
This story also appeared on the KQED blog
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James Daly is a Northern California journalist and entrepreneur — frequently both. He’s launched successful publications for TED Curator Chris Anderson (TED Books, Business 2.0) and filmmaker George Lucas (Edutopia), serving as Editor in Chief on all. Daly has also worked and written for Wired, Forbes, Rolling Stone, Sonoma, Spin, i-D, San Francisco Chronicle and the Los Angeles Times.
