the PPC Book|Pay Per Click Blog | Long Tail Thoughts in a Short Tail World

Well, not something to really celebrate per se, but rather, something to reflect on. Threadwatch has a post this weekend about the technology bubble bursting this weekend 7 years ago. March 2000. Hard to believe that it’s been 7 years already, it seems like just yesterday.

What was I doing at the time? Glad you asked…because I was one of the lucky ones who got thrown through the hurricane called the dot com bubble. Why lucky? Because I learned lessons during that time I’ll never ever forget. Valuable business lessons about speculation, smoke and mirrors, and hype. As our immortal george in chief would say:

“There’s an old saying in Tennessee — I know it’s in Texas, probably in Tennessee — that says, fool me once, shame on — shame on you. Fool me — you can’t get fooled again.”

You just can’t write comedy like that….

Flashback:

In 1997 I was working for AOL Digital Cities as a producer. Pulling together design and editorials for local Minneapolis content. It was a dream job, other than having to code in Rainman, the crappy AOL proprietary code. I was 25, all the people I worked with who had started before me were planning investments and retirement with their recently cashed in pre-IPO priced options. My options were still locked up, but if I waited just a little bit longer I would surely be next, right?

Wrong. 6 months later the company that ran our division decided to ‘change focus’ and fired 85% of our office. Ouch. Dream job gone and options kaput. I went across the street and had a beer, and began to plot my next move.

That move included going to Chicago, where my friends were and the economy was much more robust. I got a job with a small web design shop that lasted until they were late with 2 of my paychecks, which I have very little tolerance for. I picked up the phone and called a recruiter who had been hounding me about a job in the suburbs, a company called MyPoints. I accepted their package offer, which included of course a nice chunk of pre ipo options.

To make a long story short, when I walked in the door in March we had around 200,000 members. Just a few months later we had a couple million and were going public with our IPO. Most senior management were instant millionaires. Our stock price went from around $11 at open to $90 around December, if memory serves. The market cap reached, believe it or not, $2 billion at some point. LOL. We had maybe $10mm in sales?? What the hell, I thought. I was still very young. This career stuff is pretty fun!

I ended up selling some stock at the first open period, but passed on selling the rest in March 2000. I just know the stock will rebound! We’re doing so well…By the time were were ‘unlocked’ again the stock had dropped to $55, but the full bubble hadn’t yet burst. We were all drinking the cool aid at this point and were bullish on the company. We were approaching 15 million members and sales were booming. Our top sales guy was 24 years old living in NYC, he pulled down $1m in 2000. More than one co-worker started buying stock with the ‘equity’ in their options (I wasn’t that nuts).

Hindsight, they say…

Anyhow, the market crashed basically the very next day and suddenly we weren’t as smart as we thought. Our stock dropped below the IPO price faster than you could say ‘Titanic’. A couple years later United Airlines bought us for $56 million, because they liked our code. They probably put it on someone’s AMEX. Some of us stayed, some left, but at the end of the day it was a lesson in humility and business fundamentals. One that I won’t ever forget.

When I start to see things like Google’s $500 share price, I go back and read articles like this one...