What The Tech Bubble Was

People look at things like Groupon or Facebook disappointing post-IPO or Instagram selling for $1 billion and wonder if we’re in a new tech public. Dustin Curtis’ retrospective on is a valuable reminder of how ridiculous the real tech bubble of the late-1990s.

Or let me give you another example. I am, right now, a professional writer. Primarily focused on writing for the Internet. Have been ever since I graduated college in 2003. And yet, I’ve only twice in my professional career gotten a word rate as generous in nominal terms as payment I was offered to do a little editorial content for a venture-financed startup that my friend’s older brother was involved with during the summer after my senior year in high school. In inflation-adjusted terms, the highest wage I ever received came before I could legally drink. Because the bubble wasn’t just some stock prices going too high and some folks losing money. It wasn’t about some cool and genuinely popular companies receiving valuations that were arguably out of line with plausible earnings potential. It was an absurd quantity of invest capital churning through anything loosely related to “the Internet” and the money passing, like a hot potato, to anyone even tangentially related to the craze.

In a normal market, half the companies are going to be overvalued at any given time. And there are a lot of companies. So don’t be shocked if at any given time there are a bunch of overvalued companies. That’s life. The tech bubble was something else.