I’m glad it’s over

That’s the title of the talk I gave last Tuesday. I joined the Palo Alto Early Risers Toastmasters about a month ago. This was my second speech. (I hand wrote the first one and am too lazy to type it up.)


Who here hasn’t been burned by the dot com debacle, the internet bubble?

Raise your hand.

I know I have.

I been burned so bad I’m gonna raise both hands.

For almost two years, not a month went by when some one I knew didn’t lose their job.

You worry about things when you lose your job.

How you going to send your kids to college.

– take care of your parents

– you every going to retire

It wears on you.

And you may think back to the internet days, back when it seemed everyone was making hay.

Back when everyone from the CEO on down cashed out at the IPO and were instant millionaires.

I for one, am glad it’s over.

For all its glitz.

For all its hype.

For all its shine, there was an ugly side to dot com.

The internet bubble coincided with a decline in corporate integrity, which is really the integrity of those who ran the companies.

The bubble didn’t cause the decline but three factors that engendered the bubble tested the moral fiber of these companies.

Factor one: Excess equity financing (also known as VC funding).

VC’s were springing up everywhere and everybody was getting funded.

Well, not everybody.

I didn’t get funded.

But I went to work for someone who did.

And a lot of companies did get money.

A lot of money.

Too much money.

All that money created unrealistic expectations.

Factor Two: The new economy.

Somehow, the new economy worked differently.

It was based on the information age – not the industrial age.

Old school said — you had to go out and make something, manufacture something then sell it at a profit in order to make money.

I think we’re all familiar with that model.

New school said — It is no longer about manufacturing but about distribution.

The game was who could build and own the distribution infrastructure.

So, silly-idea-dot-com raised a lot of money to go out and build a big infrastructure.

You needed a lot of money (which the VC’s had) because you had to “build” the company from zero to IPO in 24 months.

Actually, you didn’t “build” a company, you “outfitted” a company.

It was basically a big shopping spree.

But at some point, you gotta stop shopping and start working.

Factor Three: Somebody had to run silly-idea-dot-com.

And there was no shortage of middle managers eager to jump from corporate America to be CEO or VP of hot startup.com.

Build infrastructure for a year or so.


Stay on for a bit longer, maybe.

Then retire.

It was a good plan.

But that’s not how it went.

Not for most companies.

What happened was the IPO market dried up.

The acquisition market dried up.

The bubble burst.

And the new economy was out.

Old school was back and companies found themselves ill prepared deal with it.

They were run by inept management teams who knew how to manage expenses but knew nothing about building effective organizations or managing to profitability.

Their IPO escape route was shut off, gone.

The only way out now WAS profitability.

And they weren’t going to get there.

No way.

The companies were in shambles.

Investors were testy, at best.

They were running out of money.

And they didn’t know what to do.

In their desperation, they lost their way.

I witnessed good men go bad.

Now, they lied to everyone.

Made hollow commitments.

Were completely irrational.

And they turned on each other.

It wasn’t just politics.

It was viciousness and malice and a struggle to be last man out.

I do not miss that.

But things ARE getting better.

Funding has been down but it’s not gone.

Companies are being funded.

But their business plans must pass old school muster.

And company DNA is more experienced in making a buck the old fashioned way.

An honest buck.

And that’s a good thing.