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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.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    Anonymous Coward, Nov 8th, 2006 @ 10:53am

    Eyeballs still matter - Lesson from YouTube

    I agree with you that people *should* have wisened up, but I am not sure they have. Look at YouTube. It is a great example of a company that has the eyeballs, but no buisness plan, and still commands an astronomical price.

    reply to this | link to this | view in thread ]

  2. identicon
    Adam, Nov 8th, 2006 @ 11:15am

    Re: Eyeballs still matter - Lesson from YouTube

    Another example? Vonage

    Need I say more?


    reply to this | link to this | view in thread ]

  3. identicon
    Chief Elf, Nov 8th, 2006 @ 11:47am

    New Economy

    Ah, I long for the days of the good ol' "New Economy"... except that the principles of economics have never, ever changed...

    reply to this | link to this | view in thread ]

  4. identicon
    casey kochmer, Nov 8th, 2006 @ 11:55am

    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.

    reply to this | link to this | view in thread ]

  5. identicon
    mmichaels, Nov 8th, 2006 @ 1:37pm

    great time for this news

    Finally some acknowledgement of positive economic news....hmmm 1 day AFTER the election that booted those who were in power when the entire thing was created. I assume we'll be seeing this sort of news coming out of other sectors as well.

    reply to this | link to this | view in thread ]

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