In Retrospect The Bubble Doesn't Look So Bad

from the remembering-the-good-things dept

While we grapple with the question of whether this current boom is similar in any way to the last bubble, a new academic paper helps shed some light on the bubble and what happened in its aftermath. One of its most surprising conclusions is that quite a number of companies from the era are still alive and kicking. Sure there were the high-profile disasters, but the period created thousands of small companies that managed to hang on. It helps confirm the idea that bubbles can be good things, with lasting positive effects, once all the hype is gone. The other interesting thing that the researchers found, when reading through old business plans, is how consistently companies planned to just get big first and than figure out a way to profit later, even though there wasn’t much reason to think this would work. This certainly should sound familiar to many of today’s startups. The important thing to take from this is that it’s the good things from the bubble that we want to be doing over again, like lots of experimentation and the emergence of a new flock of lasting companies, while tossing out the mistakes that easily get repeated.

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Comments on “In Retrospect The Bubble Doesn't Look So Bad”

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casey kochmer (user link) says:

bubble whip lash

Any time of change is a good thing for the long term. Living is change after all. It’s the very nature of life itself.

However, don’t forget the whiplash as the bubble bursts hurts no matter how good the long term results are.

This bubble is also a good for now and the long term, but it will also burst, and it will cause a period of a few years where it will hurt.

I wonder if we are in the age of bubble economics? Would make a good book title at least.

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