[HN Gopher] When the Dotcom Bubble Burst
___________________________________________________________________
When the Dotcom Bubble Burst
Author : rbanffy
Score : 282 points
Date : 2025-03-16 17:02 UTC (1 days ago)
(HTM) web link (dfarq.homeip.net)
(TXT) w3m dump (dfarq.homeip.net)
| nixpulvis wrote:
| "The aftermath of the dotcom bubble didn't just turn dotcoms into
| acquisition targets. Established tech companies became
| acquisition targets themselves. In some cases, they even sought
| out acquisition as a matter of survival."
|
| Sounds like a lot of startups.
| rboyd wrote:
| and there was no more traffic on the 101
| esafak wrote:
| COVID did that too. It was eerie.
| babyent wrote:
| I enjoyed it when the highway was empty. Me and my friends
| would go for drives and it was so fun.
|
| I mean yeah the circumstance sucked sure but it wasn't eerie
| for me.
| blindriver wrote:
| My family and I thrived during the pandemic. We made a lot
| of money, we sold our house and Airbnb'ed around the US,
| including Hawaii. It was an amazing time for us.
| dehrmann wrote:
| Didn't realize it hit Socal so hard.
| eastdakota wrote:
| Had the dotcom bubble not burst I'd likely be an attorney. I'd
| accepted an offer at a law firm in San Francisco to work in their
| Securities practice, largely taking companies public or doing
| M&A.
|
| In March of 2000, the firm called and said: "Good news bad news.
| Good news: you still have a job [unlike a lot of my law school
| classmates]. Bad news: we don't need any more Securities lawyers,
| but we have lots of room in our Bankruptcy practice."
|
| Being a Bankruptcy lawyer didn't sound like fun. A law
| professor's brother was starting a B2B startup. He offered me a
| job. The startup was a colossal failure, but I was hooked on the
| idea of a group of people starting something from nothing.
|
| Next ~8 years were painful with lots of ideas that went no where,
| but it all worked out. So, in the end, always remember that but
| for the dotcom bubble bursting, I'd be keeping track of my time
| in six minute increments.
| pinkmuffinere wrote:
| Always remember that without the dotcom bubble, eastdakota
| would be counting in 6 minute increments :P
|
| Sincerely, can you say more about the 8 years of pain? I'm
| curious how you navigated that, especially with/without
| relationships, family obligations, "runway" restrictions, etc
|
| Edit: looking at the profile, eastdakota is CEO and cofounder
| of CloudFlare. There are probably interviews and Wikipedia
| pages that address my questions.
| ljf wrote:
| I love how humble his origin story was, and how he didn't
| need to drop in where he is/who he is as part of it.
|
| Amazing who you /meet/ here.
| pinkmuffinere wrote:
| Definitely. I think this is true of the internet in
| general, we have an amazing ability to communicate with
| almost anyone, even busy experts in niche fields, if we
| just make/ask something that interests them. I don't think
| I appreciate that enough.
| eastdakota wrote:
| Those 8 years were painful. To make money, I worked as a
| bartender, an LSAT test prep instructor, as an adjunct law
| professor at a law school that was so bad it doesn't exist
| anymore. I remember 4am at the bar in Chicago where I worked,
| cleaning up some patron's puke off the floor, and thinking: I
| need to figure something else out.
|
| All the time I was trying to find an idea for a startup. I
| still had the lawyer bit flipped on so lots of things I tried
| had a legal/regulatory bent. That was definitely a blind spot
| that held me back for a while.
|
| The fun YC-related story on the founding of Cloudflare is
| that, before YC, Paul Graham used to host a conference called
| the "MIT Anti-Spam Conference." He invited me the second year
| of the conference (2003, I think) to give a talk on how to
| write effective anti-spam laws. The very technical crowd was
| polite to the lawyer. I met a ton of interesting people, many
| of whom played outsized roles in machine learning over the
| next few years, including John Graham-Cumming, now
| Cloudflare's CTO. Paul invited me back the following year
| saying I should do something similar.
|
| I was pretty sure the audience wouldn't tolerate the lawyer
| giving another talk about regulation, so I went to a young
| engineer on the team of the (bad) startup I was working on
| and suggested we build a system to track how spammers scrape
| your email addresses. He agreed to build the backend if I
| built the front end (which I largely stole from the hot
| startup of the time: LinkedIn). That turned into Project
| Honey Pot, which I gave a talk on at Paul's conference.
| Project Honey Pot gave the initial seed of an idea that
| turned into Cloudflare. And the young engineer was Lee
| Holloway who cofounded Cloudflare with me and Michelle
| Zatlyn.
|
| Lesson to me has always been even in times where you don't
| feel like you're making forward progress in your life and
| career, find ways to stay involved with interesting people
| and projects and chances are they'll pay dividends in ways
| you don't expect later in life.
|
| I clearly remember walking back to Paul's house in Cambridge
| after the 2004 conference where I'd presented Project Honey
| Pot. I believe he and Jessica had relatively recently started
| dating. They were talking about startups and how people
| didn't understand how they worked. Paul suggested they should
| teach a class at MIT. And that, of course, is what later
| turned into YC.
|
| There were other dramatic events that evening in Cambridge
| that I think sharpened all our minds and made us appreciate
| there's no time like the present, but I'll leave that story
| for another day.
| Infinitesimus wrote:
| Damn, what a turn of opportunities from just saying yes and
| showing up (and obviously a ton of hardwork and
| sacrifices). Thanks for sharing!
|
| I can't resist ...
|
| > There were other dramatic events that evening in
| Cambridge that I think sharpened all our minds and made us
| appreciate there's no time like the present, but I'll leave
| that story for another day.
|
| > ... appreciate there's no time like the present ...
|
| The present is now! Some of us are dying to hear the story.
| eastdakota wrote:
| I've told it elsewhere. Some Googling around may turn it
| up.
| jgrahamc wrote:
| _I met a ton of interesting people, many of whom played
| outsized roles in machine learning over the next few years,
| including John Graham-Cumming, now Cloudflare's CTO._
|
| And the other way around. I met eastdakota which would
| later lead to me being at Cloudflare. Turns out networking
| (human and computer) is important.
| Eiriksmal wrote:
| And then, 20 years later, I meet a kid on the local
| playground who claims to be the son of one of the
| Cloudflare co-founders or CTO. I was thinking, wait,
| isn't JGC in Britain, not Boise? Even though the kid was
| visibly disappointed that I'm bearish on nVidia and LLMs,
| he strained my understanding of how puts work in stock
| trading. So that amusing conversation, sporadically
| interrupted by loading and unloading my toddler from the
| swingset, encouraged me to get more familiar with the
| broader investment market, beyond the simple kid invest
| products I've been working on the past four years. So
| thanks for that proverbial push on the swings, Cloudflare
| kid!
| Caligula wrote:
| This is awesome. Thank you for sharing this.
| simonebrunozzi wrote:
| There's not a high chance that this piece of history will
| be lost "forever", it will just remain as a HN comment.
|
| I wonder what would be the best way to harvest these and
| add them to, say, a wikipedia page. I'm pretty sure it's
| something that you could decently do with an LLM.
| lvl155 wrote:
| To be fair, if you had gone down bankruptcy you could have made
| a killing doing distressed during one of the most lucrative
| periods.
| acdha wrote:
| Maybe, although the people just getting into the field
| probably aren't making the fortunes and there wouldn't be the
| satisfaction of building something real.
| eastdakota wrote:
| I have plenty of friends who went down that path. They've
| done very well as lawyers. But suffice it to say that if
| offered they'd readily trade places.
| simonebrunozzi wrote:
| Wow! You ended up building a not-so-small piece of today's
| internet. Congrats.
|
| Edit: one question I have for you: besides the "sliding door"
| moment of dropping the lawyer career and choosing another one,
| what convinced you to abandon a law career entirely? Most other
| lawyers would have sticked there.
| gedy wrote:
| I got my nice Herman Miller chair that I'm sitting on now, which
| was wheeled out into the parking lot by the facilities guy saying
| "take it all..."
| antirez wrote:
| This Ballard style stuff is the things I love.
| ghaff wrote:
| I agree with all that. Dot-bomb was a nuclear winter like nothing
| tech has seen since--certainly including today. I was lucky
| enough to almost immediately land something through someone I
| knew and, if it didn't pay a lot of money, it was a decent (and
| mostly enjoyable) living for a number of years. But a lot of
| people I knew basically dropped out of tech and some probably
| never again had solid jobs.
|
| And, yes, it also crashed any tech-heavy investments that took
| _years_ to recover to their peak levels assuming they recovered
| at all. A stock I owned through options at one former employer
| were a source of tax write-offs for years. Probably led me to be
| a bit _too_ conservative with such things. Eventually they got
| acquired through various complicated transactions and I did "OK"
| after something like 15 years.
| kortilla wrote:
| You're lucky to even have done OK. Not only did a lot of people
| get wiped to zero, but some people ended up in huge debt to the
| govt.
|
| I know multiple people who went through:
|
| - Exercise an option and "realize a gain". Have to pay taxes
| for that year on the realized gains.
|
| - stock crashes to zero or near zero before they had a chance
| to sell (either because of blackout periods or not being public
| yet)
|
| - tax burden from year N-1 is still due for hundreds of
| thousands. Capital loss offset only helps for returns in the
| following years
|
| Sell to cover if you can
| ghaff wrote:
| I don't remember the details. I had bought a (modest) vehicle
| with exercised gains (and maybe employee stock purchase).
| Don't remember the residual tax impacts being a big factor in
| general--may have been timing of some sort. But a $100 stock
| went to about $4. Went back up a bit and then only became
| somewhat OK through various subsequent acquisitions and spin-
| offs. But, yeah, a lot of people got clobbered when they took
| profits and then held onto the stock--and other scenarios
| like you say.
|
| When I left not long before dot-bomb, I'm glad I didn't go
| for all the stock options they were offering me but I had
| already made the decision to leave. The company I went to
| cratered but, as I wrote, someone I knew picked me up.
|
| But, yeah, making it through dot-bomb was incredibly lucky.
| The situation in tech broadly may not be great today but it's
| not like 2001.
| trgn wrote:
| Also the story of midcap saas going public around 2020.
| ghaff wrote:
| Application service providers. Was just not the right time.
| thijson wrote:
| I worked with some folks like that. They emphasized always do
| same day sale, don't sit on the stock after exercising. They
| had massive tax bills, because they exercised when the stock
| was flying high, but didn't have enough cash to pay for it.
| The stock itself had cratered so they couldn't raise money
| that way.
| BeFlatXIII wrote:
| Stories like that make me wonder why domestic terrorism isn't
| more popular.
| jackcosgrove wrote:
| > Probably led me to be a bit too conservative with such things
|
| Those who graduate into recessions have crimped lifetime
| earnings compared to those who graduate into expansions. I
| wonder to what extent it's lost income, and to what extent it's
| a more risk-averse attitude.
| ghaff wrote:
| I don't know. For me, it was mostly don't double down on my
| own company stock or maybe even (at the time) more aggressive
| funds generally. It's not like I retreated into Treasuries.
| But I still did OK from the more aggressive investments
| because (maybe luckily?) they did pretty well.
|
| I didn't really graduate into a recession but I felt I learnt
| some lessons in dot-bomb (when I was probably almost 40)
| which was a decent way into my professional career. It was a
| period from the 80s when new grads in tech weren't earning
| anything like the incomes that at least some Silicon Valley
| copanies were paying if that was there thing.
| lnrd wrote:
| > Those who graduate into recessions have crimped lifetime
| earnings compared to those who graduate into expansions.
|
| It's about not having access to opportunities.
|
| Something that comes to mind as an example: I would argue
| that the whole F.I.R.E. movement was possible only for a very
| specific subset of people that started working in tech in
| very few regions of the world between 2005/2010. That's a 5
| years window to get in, maybe a bit more but that's it.
|
| Then the cost of living started booming, stock prices started
| booming, stock options and other kind of equity grants would
| never appreciate as before.
|
| People that attempt it now as a form of financial discipline
| have nothing to do with the people that invented it and
| retired as millionaires before reaching 30 by being a bit
| frugal and investing everything in the nasdaq.
|
| I recently stumbled upon the linkedin profile of someone that
| worked from Apple 2008/2014 and then was able to retire
| thanks to a mix of stock options and early investments in
| tech. He was surely savvy about it, but the conditions to be
| even able to do that seems astronomically low in the grand
| scheme of things. Just being born in another country or a
| couple of years later would make it impossible.
| ghaff wrote:
| And areas of finance like investment banking. The specific
| examples I'm familiar with who retired quite young got in
| during maybe the late 1980s and out in probably their 40s.
|
| There were also tech people during the dot-com bubble
| assuming they had money to invest and got out in time.
|
| But I agree it was probably easier for people in especially
| SV at especially some of the large tech companies during
| about the past 15 years.
| elorant wrote:
| That one hit me hard. I had just quit my job from a prestigious
| company the previous year to pursue my dream with two friends of
| building an internet related company and just a few months after
| we launched the market tanked. And it tanked so hard that we
| practically went out of business a year later. The problem was
| that the web back then was so fragile as a business case that
| once the bubble burst a lot of companies lost interest in
| investing in it.
| bwfan123 wrote:
| It was the first boom-and-bust experience for me. I got laid
| off from a startup that folded after the bust. That made me
| risk-averse and a skeptic. The housing bust of 2008 had a
| completely different flavor and character unlike dot-com. And,
| a startup I worked at folded in 2009 as well.
|
| Since then, we have not seen a tech related recession -
| although, there have been ups and downs. As a result the
| current crop of engineers dont have a visceral experience of
| what happens in a tech related recession.
| bboygravity wrote:
| Nice timing, although the market crash that is just about
| starting right now is more due to lack of functional US market
| regulation (similar to 2008, but worse).
| dalyons wrote:
| How so? Feels like the crash starting now is very squarely due
| to the chaotic anti-investment actions of the current
| administration.
| xbmcuser wrote:
| No the crash was coming this administration just accelerated
| it. Trillions of $ of government debt and private debt is up
| for financing at 3-4 times the interest rate.
| pclmulqdq wrote:
| I was honestly shocked that both the Biden admin and
| corporations were able to hold this off in 2023-2024 given
| the huge debt loads held by everything.
| bobthepanda wrote:
| Banks love to extend and pretend big loans because loans
| going belly up is also bad for them. Small fry like
| homeowners rarely get such grace.
| dalyons wrote:
| Maybe - i've been reading that sort of permabear "the
| economy is about to crash because of obvious reason X" for
| at least 15 years now. I listened for a time sadly - it
| cost me a lot of missed investment growth. Eventually
| they'll be right, but haven't been very predictive.
|
| However, the deliberate economic self-destruction being
| unleashed by trump and friends feels like a very different
| flavor of cause.
| bobthepanda wrote:
| Economists have predicted 9 out of the last 5 recessions,
| as the saying goes.
|
| Usually even if this it the case you don't necessarily
| want to pull out of the market, but buy into the dip.
| Unless you seriously think the stock market is going to
| be wiped out for years, buying the dip means you have a
| large position when the market starts recovering.
| cmrdporcupine wrote:
| Most non-institutional investors rarely just have cash
| lying around. My assets are tied up in the market. Same
| as it's dangerous to try to time the top of the market,
| it's dangerous to try to time the bottom. I tried in a
| modest way in 2008, and it took me a decade to recover on
| those stocks.
| fc417fc802 wrote:
| It's also dangerous because the dip is the average.
| Individual companies can and do fail.
| bobthepanda wrote:
| Yeah when I say buy the dip ideally you would buy an
| index fund. Picking winners is a fool's game anyways.
| roenxi wrote:
| I'm a big proponent of the bear case, but if you factor
| in dividends [0] pretty much any time in the last century
| has _nominally_ been a good time to invest in the S &P
| 500 even if the first few years aren't optimal.
|
| The bear case is generally "this will cause a crisis,
| then the government is going to print money, hand it out
| to asset owners & lump taxpayers and citizens with the
| real costs". There has been a reasonable expectation that
| shareholders will come through fine since the '08 crisis
| firmed up expectations about how the government will
| handle problems. I don't think there is an expectation
| any more that the S&P will go down in nominal terms. To
| argue that it will someone has to come up with a theory
| where the Fed doesn't get involved. There have been
| multiple major crisii and if anything US stock market
| performance is the inverse of how the economy is expected
| to perform. For example, COVID was a big winner for
| shareholders and asset owners despite obviously being an
| economic catastrophe.
|
| [0] https://www.slickcharts.com/sp500/returns
| JumpCrisscross wrote:
| > _Trillions of $ of government debt and private debt is up
| for financing at 3-4 times the interest rate_
|
| This is a problem, but it's not the current problem. The
| pain isn't coming from defaults [1]. It's coming from our
| export industries.
|
| [1] https://fred.stlouisfed.org/series/DRALACBN
| refurb wrote:
| US exports make up 11% of GDP. Of that 11%, some fraction
| is facing retaliatory tariffs.
|
| Considering the DJIA went up 4,000 points from Dec then
| crashed 4,000 points in Jan, one should be careful
| assigning cause when it did it again from Jan to Mar.
| thfuran wrote:
| DJIA is a garbage index that's weighted by share price
| instead of anything meaningful and only includes 30
| companies.
| hylaride wrote:
| A lot more than 11% of GDP relies on various imports
| randomly being subject to tariffs (on everything from
| steel and lumber to electronics). This is effecting
| everything from manufacturing and construction to retail.
| nemo44x wrote:
| What crash so you foresee? We just had a correction but that's
| typical and healthy.
|
| How do you think it will unfold?
| robinhouston wrote:
| To me the most sobering cautionary tale from the dotcom bubble is
| the story of Cisco. Cisco manufactured, in a very real sense, the
| physical infrastructure of the internet: the routers, switches,
| modems, etc. that directed the IP packets to their destinations.
| (To a significant extent they still do, though nowadays they have
| more competition in that area.)
|
| Savvy investors piled in to the stock, reasoning that, while
| internet startups might come and go, the internet itself was
| surely here to stay. It was popular to observe that, in the
| California gold rush of the mid-1800s, the purveyors of mining
| equipment made it rich more reliably than the prospectors for
| gold.
|
| Anyway the Cisco stock price peaked in March 2000, and to this
| day it still has not reached that level again. The savvy
| investors were of course correct in their belief that the
| internet would continue to be important, and that Cisco would
| continue to be an important manufacturer of internet networking
| equipment. But they lost money anyway, because once the euphoria
| had worn off the market consensus was that the stock just wasn't
| worth as much as the price it had been selling for at the height
| of the mania.
|
| Any parallels to hot contemporary stocks are left as an exercise
| for the reader -- and I do not mean to suggest that history must
| always repeat exactly.
| smallmancontrov wrote:
| Obviously you don't mean NVIDIA, because 80% margins on matrix
| multiplication will last foreverrrrr.
| dehrmann wrote:
| And I can't name several customers with very deep pockets
| working on their own chips to squeeze/compete with NVDA.
| alephnerd wrote:
| > And I can't name several customers with very deep pockets
| working on their own chips to squeeze/compete with NVDA.
|
| Google, Amazon, and Microsoft all have custom ASIC and TPU
| projects in their pipeline, and what holds true today might
| not hold true in 5 years.
|
| A major reason Nvidia was able to do so well was because of
| technical outreach by donating their GPUs to programs all
| over the US, building a strong albeit self serving OSS
| relationship, the CUDA ecosystem, and the acquisition of
| Infiniband.
|
| Much of these advantages can be nullified by competitive
| margins and pricing for hyperscalers designed and owned
| hardware.
|
| Cisco was hit by this same situation as server vendors like
| Dell began integrating their own in-house networking
| functionality within their servers, and Dell itself was
| outcompeted by cloud vendors.
| smallmancontrov wrote:
| Agreed, the only thing I'd add would be AMD's self-
| sabotage. Pretending to have compute capability (see also
| "right around the corner") for over a decade when it was
| actually so broken as to be sub-viable was an enormous
| own-goal that they doubled down on when they exited
| desperation mode without rehydrating the teams and
| tripled down on with the RDNA/CDNA split.
|
| By rights they should have been fast followers, but they
| stacked the critical mistakes so high that frankly I
| think NVIDIA's subsidized GPGPU classes are the smaller
| part of this story. If the people struggling to get
| OpenCL to work had been able to get it to work (on other
| than NVIDIA GPUs lol) the situation would look very
| different today.
| JKCalhoun wrote:
| And I'd be surprised (disappointed) if AAPL were sitting
| on their hands.
| roenxi wrote:
| I think you're not naming entire nation states, given the
| way the Chinese are splashing money around there it looks
| like there is about to be a flood of chipmaking capacity
| hitting the market and a lot of that will end up competing
| in matrix multiplying.
|
| Although I hear VCs are working on an algorithm where they
| burn money directly and the smoke patterns represent the
| solution to the multiplication. That might keep the margins
| high.
| smallmancontrov wrote:
| Those Chinese companies will have to fight our western
| champions, TSMC in a green trenchcoat, TSMC in a red
| trenchcoat, TSMC in a blue trenchcoat, TSMC in a purple
| trenchcoat, and TSMC in a yellow trenchcoat.
| selimthegrim wrote:
| Is this after the same Spidermen TSMCs got down from all
| sitting on top of each other?
| randmeerkat wrote:
| > Although I hear VCs are working on an algorithm where
| they burn money directly and the smoke patterns represent
| the solution to the multiplication. That might keep the
| margins high.
|
| This has been bothering me for some time now. It's rather
| obvious to me, as an engineer, which startups are well
| positioned and which aren't... Do VCs really have no
| standard for due diligence, do they really just not care,
| or is there something else at play that I'm missing...?
| hattmall wrote:
| Valuations aren't attached to reality. Look at Crypto,
| NFTs, Quantum computing etc. You can have a completely
| non-viable money pit but if it hits the right hype cycle
| mix you can make huge exponential gains. It's just about
| what other people can be convinced to invest in. Right
| now the US tech sector is pretty much the only game in
| town to dump money and hope for huge returns. Previously
| it was "emerging markets" but right now there's a lot of
| regulatory overhead limiting gains in most EM countries.
| lumost wrote:
| Different to investors are chasing different dreams.
|
| As an exercise, imagine you have a portfolio which will
| in a typical year lose around 1.2% to the tax man for
| capital gains. Rather than accepting the guaranteed loss
| of taxes - you take ludicrous bets on asset classes where
| you can be guaranteed to book a loss which could be
| harvested for tax purposes, or will return 100x your
| investment (at which point you don't care about the tax
| man).
|
| Viewed in this light, the VC preference for burn bright
| and burn fast startups makes sense. The worst case
| scenario for some LPs would be to still have money
| leftover.
| rcxdude wrote:
| I don't understand how this adds up. If you're losing
| money to the tax man you're still making money overall.
| Now, you could say 'screw it' and put the money you're
| making into long-term risky bets, but either they don't
| pay off, and you've just lost money, or they do pay off,
| and you owe even more tax, with even less efficiency. If
| you wanna gamble, you can gamble if you want, and the
| supposed idea of VC is that if you take many risky bets
| you'll be able to win on average, but it's not tax-
| efficient at all because you tend to win all at once.
|
| (As a general rule of thumb, I'm deeply suspicious of any
| 'it's a tax write-off' explanation for people losing
| money: its extremely rare for losing money to make
| someone better off overall. It may be advantageous for
| them to move around where and when they say they are
| losing money, as you'll generally be more tax-efficient
| if you make money consistently and through activities in
| areas which are not as highly taxed, but it's not
| generally a useful strategy to light cash on fire to
| reduce your tax bill: you tend to be out of more money
| than you save on tax)
| csomar wrote:
| > is there something else at play that I'm missing...?
|
| Depending on the stage, investors don't care about _any_
| of the details except for the founders ability to raise
| the next round and their probability to IPO at a later
| /advanced stage. The stock is the product and whether you
| are selling a real time machine or a crystal is
| irrelevant.
|
| Which is not that "insane" really. If that's how money is
| being made, and investors are in the business of making
| money, then that's the path they are going to take.
| bilekas wrote:
| > The stock is the product and whether you are selling a
| real time machine or a crystal is irrelevant.
|
| This is the right answer, some people think that the dot-
| com bubble and mortgage bubble is something for investors
| to regret, when in fact they made such a ridiculous
| amount of money they're just searching for the next
| bubble. Not the next great product.
| rcxdude wrote:
| _some_ investors did. This kind of strategy is still
| risky.
| wat10000 wrote:
| There's a point of view that smart investors did, and
| dumb investors were left holding the bag.
|
| If that's your belief, then thinking it's risky and you
| may lose your shirt requires believing that you may not
| be smart. Which is a tough thing to accept for a lot of
| people, especially ones who think investment success is
| all about smarts and not luck.
| bilekas wrote:
| I agree with you, it is risky, I have no insights into
| the data but I would imagine that those risks are being
| calculated with previous W/L taken into account.
|
| We all know there is no 'sure thing' when investing, but
| if you're a large money manager, you generally want to
| maximise profits, looking through history, the 'quickest'
| earners are usually always those from OP, speculation,
| market share and IPO.. The 'bubble' of these _seems_ to
| be loosing air but I 'm purely speculating based on the
| tech job market so I could be completely wrong.
| cship2 wrote:
| Sadly that is what market economy has morphed into. Was
| suppose for groups to share intelligence.
| rcxdude wrote:
| Markets (like most human systems) aren't really
| 'supposed' to do anything: they've just kind of evolved
| as various participants in the market have found them
| useful for different things, and competition between
| systems has selected for characteristics that allow them
| to survive. Economists mostly describe systems, ideas
| like efficient markets are more of a post-hoc hypothesis
| for why the system survives, not an up-front designed
| attribute of the system that was desired when it was set
| up.
|
| (which basically means that if the conditions mean that
| the optimal strategy in the market is to basically just
| run pump-and-dump 'greater-fool' scams on everyone else
| then that's what you'll see occur)
| tim333 wrote:
| >something else at play that I'm missing...?
|
| I'm not sure if you are taking into account that VCs are
| remunerated largely on the amount of money they invest
| rather than the results?
| randmeerkat wrote:
| > I'm not sure if you are taking into account that VCs
| are remunerated largely on the amount of money they
| invest rather than the results?
|
| Sure, but is it really worth just spraying a firehose of
| money across a variety of entities without trying to
| investigate them at all? It just seems that they could
| still realize outsize returns and save hundreds of
| millions as well...
| netdevphoenix wrote:
| You are looking at it the wrong way imo. It's like when
| developers build a product and only focus on the
| technical side and neglect/underestimate the sales side
| or when they buzz about the language used to build
| something.
|
| VC don't really care about the startup's product. Your
| pixel machine. That's a side effect.
|
| Growth. Exit. IPO. Those are the 3 words they want to
| hear.
| randmeerkat wrote:
| > Growth. Exit. IPO. Those are the 3 words they want to
| hear.
|
| IPOs aren't happening in this market... Are IPOs still
| the only thing investors are looking for?
| paxys wrote:
| > It's rather obvious to me, as an engineer, which
| startups are well positioned and which aren't
|
| So I assume you are a multi-billionaire, right?
| kasey_junk wrote:
| You could know precisely what to invest in but not have
| access to the funds or deal flow and not be successful.
| randmeerkat wrote:
| > You could know precisely what to invest in but not have
| access to the funds or deal flow and not be successful.
|
| Thank you.
| Imustaskforhelp wrote:
| Then I suppose he should first try gaining access if he
| really knows things "precisely" It should be on the top
| of his world priority if anything then.
| arkh wrote:
| > Do VCs really have no standard for due diligence
|
| The Theranos saga should give you the answer you're
| looking for.
| mtrovo wrote:
| They're not in the business of finding the best ethical
| fulfilling investment. Their goal is to find nascent
| niches that can be packed as a trendy future industry and
| 10x the bag down other investors down the road. Period.
| It has worked in the past with SaaS, it has worked (sort
| of) with crypto, it might as well work with AI. The only
| difference is that now they have to work hard and hope
| the Chinese don't steal the fire and ruin the long term
| vision of this revolution being US centred again.
| Imustaskforhelp wrote:
| Okay, tell me, Lets say I want to be an entreprenuer who
| can roughly learn any skill in tech (pretty young and
| ambitious) and he just wants to make enough money to live
| life nicely / travel the world (something like 60-80k USD
| are fine to me as I live in third world country and plan
| to travel mostly in cheap countries , I am a pretty
| frugal person. I want to work the most minimal amount of
| hours/work hours.
|
| Something like the 4 hour work week. What Idea would you
| want to suggest me as you are an engineer.
|
| Since, you are an engineer, and it seems obvious to you
| which startups are well positioned, It seems that you can
| reason out which trends in startups are well positioned
| for my specific use case.
|
| I will pay you 100$ of my first income from such a
| project if it really fulfills what you are saying.
| gpderetta wrote:
| > VCs are working on an algorithm where they burn money
| directly and the smoke patterns represent the solution to
| the multiplication.
|
| That's literally crypto, right?
| diamond559 wrote:
| Microsoft, Meta and Oracle already spend billions on
| supposedly completely inferior(according to the Nvidia
| cultists) AMD chips. Nvidia is the biggest bubble in human
| history.
| 8ytecoder wrote:
| That's got to be Tesla. Nvidia's PE is still half that of
| Tesla.
| schmidtleonard wrote:
| PE isn't a cheat code to rational stock valuation, it's
| the "nothing ever changes" assumption dressed up in a
| formula. PE looks at past earnings, while the price of a
| stock buys its future earnings. A modest PE on NVDA says
| "I expect datacenter revenue to continue" while a modest
| PE on TSLA would say "I expect robotaxi to fail." These
| are fair opinions to have, as are their opposites, but if
| datacenter revenue collapses then today's modest PE won't
| save NVDA and if TSLA can pull off robotaxi then today's
| high PE will be vindicated. Stocks are all about Future
| Earnings, but you can't put that in a column and sort by
| it so we have PE.
|
| You can certainly have success while avoiding high PE
| stocks, but you are on a site about startups and your
| name suggests you work in the tech sector, which are both
| places where high PE often does make sense and it pays to
| be familiar with the reasons.
| marcosdumay wrote:
| > a modest PE on TSLA would say "I expect robotaxi to
| fail."
|
| No. Just having competition is enough to destroy the
| expectations on TSLA.
|
| And realistically, they are abut last on that race, being
| thrown out of track about a decade ago and never managing
| to make anything work since then. So, yeah, betting on no
| competition is a very weird option.
| JKCalhoun wrote:
| Good point. With BMW, Lexus, Audi, Mercedes, Porsche --
| all with luxury EV's -- Tesla really is looking like an
| also-ran.
|
| I'm not in that circle of clientele though so I don't
| know: are any of these now seen as _the_ luxury electric
| car?
| marcosdumay wrote:
| I'm really not in that market :)
|
| But the market of luxury cars isn't enough to sustain a
| company with the valuation of Tesla. If interest rates
| ever stay non-zero, they will need to take almost the
| entire cars market worldwide, or something else with
| similar size.
| Yossarrian22 wrote:
| Even if they can get robotaxi to work on a level better
| than Waymo currently is shouldn't they just be valued as
| if they were Uber with $0 paid out to contractors? The
| labor is not that significant a cost to what's
| fundamentally a taxi business
| coredog64 wrote:
| Full FSD would theoretically allow vehicle owners to rent
| out spare capacity with no hassle.
|
| I saw the low-tech version of this in Honiara: Western
| expat buys a cheap car. Driver is hired to take kids
| to/from school, but in lieu of payment, driver is free to
| run a taxi service as long as he makes his school
| commitments.
| hattmall wrote:
| The more interesting dynamic with Nvidia though is that
| most of its revenue is actually fueled by bubbles as
| well. Teslas earnings are much more grounded and natural.
| germinalphrase wrote:
| "Teslas earnings are much more grounded and natural."
|
| How do you rationalize Tesla being valued higher than the
| combined valuation of the next ten car companies? They
| will be the only one left standing?
| jansan wrote:
| I think you misunderstand that comment. Tesla may be
| hopelessly overvalues, but their revenue may grow in
| future. OTOH Nvidia's revenue may have peaked.
| dzonga wrote:
| how is their revenue gonna grow in the future when they
| don't have an edge in their main core product. Batteries
| are by panasonic. while BYD makes its own batteries.
| Tesla has no moat. At least Nvidia has CUDA
| germinalphrase wrote:
| Maybe so. Their valuation coming down to earth would
| certainly ripple. Whatever precedes that fall, it seems
| unlikely that revenues would remain unaffected.
|
| In all, it's unfortunate that the US's most prominent
| electric vehicle manufacturer is wrapped up in so much
| noise. Competition is only going to stiffen.
| sulam wrote:
| You forgot to add "Long TSLA"
| throwaway2037 wrote:
| I don't why this comment was downvoted. You raise an
| important point. I also noticed that you (carefully?)
| made no comment about Telsa's _stock price_. Instead, you
| only focused on their earnings -- which are excellent for
| a car company.
| simianparrot wrote:
| It got downvoted for not parroting "Tesla bad" even if it
| didn't claim anything to the contrary and is simply
| observing one fact -- Tesla's earnings being great.
| That's not acceptable apparently.
| scarface_74 wrote:
| Earnings aren't great though...
| scarface_74 wrote:
| How are there earnings excellent? Sales are declining in
| both real terms and market share. The brand is globally
| toxic.
|
| Net income is down 70% year over year and they are now
| losing money.
| diamond559 wrote:
| Grounded as in they are heading straight down to the
| ground sure.
| doctorpangloss wrote:
| People choose NVIDIA because of the software. So will
| software margins go away?
| JKCalhoun wrote:
| Just an interested layman here: seems like it's the
| libraries that people choose. I don't see why those can't
| be ported to other hardware.
| duped wrote:
| They _are_ ported to new hardware, it 's just that new
| hardware is made by NVidia. Part of why their moat is so
| deep is that they are able to keep the software stack
| stable with transparent hardware architecture upgrades.
| It's kind of the opposite of intel.
| slowtrek wrote:
| Cisco did not innovate out of their first incarnation. Nvidia
| evolved out of gaming gpus, and they didn't do it because
| they were looking for trends.
| csomar wrote:
| Nvidia didn't innovate into AI. Developers used their
| gaming cards for AI. They kinda got into that situation by
| pure luck. I wouldn't trust they will be able to pivot into
| the next big bubble if it's quite outside their area of
| expertise.
| est wrote:
| also crypto mining does tons of SHA256 on CUDA.
| theshackleford wrote:
| > They kinda got into that situation by pure luck.
|
| This statement is wildly inaccurate. NVIDIA made
| deliberate and strategic moves to dominate AI and it made
| them a very long time ago. They didnt fall into this
| yesterday by mistake.
| aurareturn wrote:
| Obviously you don't mean NVIDIA, because 80% margins on
| matrix multiplication will last foreverrrrr.
|
| It won't last forever.
|
| The question will always be: Are we in the 1995 or the 2000
| of the dotcom era?
|
| By 1995, Cisco's stock had already increased 6x since the
| start of 1993. If you bought at 1995, you'd 10x by its peak.
| Even after the bust, Cisco's stock was still 50% higher than
| it was in 1995.
|
| The problem with Nvidia's stock isn't demand. The problem is
| that Nvidia makes something so good and so valuable that the
| US government has decided to nationalize them by dictating
| who they can or can't sell to. If Nvidia is freely able to
| sell to any country they want, their sales and margins would
| be much higher right now. The demand is that great.
| diamond559 wrote:
| "AI" isn't even profitable, it is neither good nor valuable
| outside of for creating a massive asset bubble. The export
| ban was made by old dinosaurs that don't understand the
| tech and is more about China than "AI".
| immibis wrote:
| LLMs (what you mean by "AI" with the scare quotes) are
| _great_ at spamming and scamming people.
| acdha wrote:
| I'd generalize that somewhat to say that LLMs are good
| where you can cheaply verify the results relative to the
| cost of being wrong. A lot of scamming is already
| structured around most people ignoring their messages,
| and they don't support anything so it's just a question
| of whether they lose more potential marks than doing it
| manually.
|
| (This is also why coding is one of the areas where they
| perform best: the cost of structural validation is low
| and there's a human in the loop verifying the behavior)
| aaronbaugher wrote:
| I've tinkered with LLMs, because I keep thinking it'd be
| cool to have an "assistant" that could research and boil
| down information for me. The problem is coming up with a
| question that is A) too complicated to be answered in a
| single web search that I can do myself as fast as asking
| the question, and B) not too complicated or important for
| me to accept the answer without redoing the research
| myself to verify the answers are correct.
|
| For simple questions (How long does the moon take to
| orbit the earth), a search engine will give the answer
| right in the results; I don't even have to click through
| to a page. An LLM can't save me any time there, so I'd
| only be using it to be using "AI" (which is what I see
| people around me doing).
|
| For difficult or currently controversial questions
| (What's the best hosting service for my new subscription
| site, taking into account price, reliability, location,
| and hardware support?) there's no way I could trust it
| not to be making shit up. By the time I checked all its
| work, I might as well have done it myself.
|
| So I'd like to usefully use it, but I can't figure out
| how to use it as more than a curious toy.
| milesvp wrote:
| My experience with LLMs is that they are vastly superior
| to google at the moment for doing research on topics you
| know very little about. They make doing research fun and
| productive again, in a way that google has failed at for
| over 15 years. I used to be able to google a topic I only
| vaguely knew existed, and after a few tries and scolling
| through 10's of pages of results, I could find a term
| that would bring me much closer to the term of art that
| would crack open the topic for me and give me good
| results. That is nearly impossible today. Google simply
| doesn't populate page 4 of a search term, and it doesn't
| have booleans to filter down either. But with an LLM, I
| can poke and prod it until it gives me something that I
| can then use to reference real sources.
|
| LLMs also seems to be really good at giving sort of the
| average (modal?) answer on a topic, so I find it useful
| for trying to get an average understanding of something.
| One example I've found useful is getting it to interpret
| ambiguously worded datasheets. I don't necessarily trust
| its answers, but it may show that I'm totally thinking
| about something wrong.
| cruffle_duffle wrote:
| Asking an LLM straight up to recommend a hosting service
| is not going to return anything useful.
|
| A better approach would be to ask it to help define what
| it is you want from a hosting service. You can give it a
| fuzzy poorly written brain dump of what you are looking
| for ask it to "restate what my requirements are and
| expand upon them (but don't solve yet)". Let it help you
| understand and clarify your own thinking!
|
| It's a dialog. Asking LLM's for answers isn't really a
| good use of the tool. Especially something so incredibly
| broad like "list top ten best providers". They don't
| fucking know! They will just regurgitate what they were
| trained on. Except maybe ChatGPT's "deep research" which
| does a bunch of websearches and compiles and interprets
| the results.
|
| One of the "problems" with LLM's is people simply not
| knowing how to use them or understanding what they are
| good at and what they aren't so good at. It's hard to
| know because it's both masked in a hype and honestly I
| don't think we have a good understanding of their edges
| yet.
| borgdefenser wrote:
| To me, it is the easiest trade in the world right now. Long
| NVDA on a market volatility spike. "AI is dead", "the high
| is in".
|
| It is obvious to me we are going to get to "AGI" in this
| bull run. Maybe it is complete hype and bullshit marketing
| but we are going to get to someone releasing a model they
| claim is AGI. That is really why I don't see what the point
| is in comparing this to the dotcom. Dotcom was really a
| bandwidth problem that just needed to get sorted out
| because my telephone line was basically busy from 1995 to
| 2001. There wasn't this AGI narrative that once crossed you
| can price in any valuation you want.
|
| There is a huge bubble and irrational exuberance in quantum
| computing stocks right now. Those have nothing to do with
| reality. That looks like dotcom level stupid.
|
| NVDA is not even a bubble, it is just a bull market.
| automatic6131 wrote:
| This is my quant
| 0xDEAFBEAD wrote:
| >Maybe it is complete hype and bullshit marketing but we
| are going to get to someone releasing a model they claim
| is AGI.
|
| >...
|
| >There wasn't this AGI narrative that once crossed you
| can price in any valuation you want.
|
| And due to the strength of this "bullshit marketing"
| "narrative", you can be sure there will be a greater fool
| to sell your shares to. Where have I heard that before?
|
| A more realistic bullshit-marketing scenario: OpenAI
| releases a product they claim as "AGI" purely for
| marketing purposes, everyone gets disappointed as they
| realize "this is it?", share prices drop.
|
| The story of Cisco illustrates that moats matter. There
| aren't any in AI, as far as I can tell.
|
| If AGI for software development is _actually_ invented,
| one of the first uses will be to wreck Nvidia 's moat.
| Imustaskforhelp wrote:
| I just tried using cursor to create a simple ffmpeg
| golang youtube segment cut and download and oh my god it
| fumbled so hard. Wasted one hour of my time.
|
| I personally don't know but claude 3.7 (maybe its
| placebo) but claude 3.7 in the web works way better than
| cursor agent or any other thing.
|
| We are talking about a 500 lines of codebase at max and
| its fumbling so hard , I don't think it can replace 100%
| of us with "vibe coding" , I have started to break my
| task into very smaller steps and then use AI for that and
| then start to integrate it myself
| Imustaskforhelp wrote:
| AGI just feels weird.
|
| What does AGI really mean?
|
| The r/singularity guys are going bonkers over gemini's ai
| studio experimental image photoshop-esque capabilities
| but my prompts don't really work that nicely I suppose &
| creates really shitty images.
| symbolicAGI wrote:
| Cisco Systems declined 89% from its dot-com peak to its
| bottom during the crash.
|
| Expect the same for Nvidia.
|
| The huge datacenter orders for redundant infrastructure
| will start postponing and cancelling this year. That is a
| falsifiable prediction.
| 0xDEAFBEAD wrote:
| Nvidia's "moat" is mostly in the form of software though.
| If AI succeeds in automating away software development,
| that actually seems pretty bad for Nvidia the company.
|
| I don't think there are any defensible moats in AI. I see
| Ciscos everywhere in that industry.
| aurareturn wrote:
| It's not just CUDA. It's the entire solution from CUDA,
| best hardware, networking, data pipeline, etc.
| 0xDEAFBEAD wrote:
| If AGI is powerful, it will help competitors replicate
| that stuff. If AGI _isn 't_ powerful, why invest at such
| a high revenue multiplier?
|
| The way I see it -- either AI is a bubble, in which case
| you'll lose your money. Or AI _isn 't_ a bubble, in which
| case the effects are fairly impossible to predict (and
| quite likely destructive to humanity, same way humanity
| was destructive to less intelligent species). Either way,
| it's not a technology you want to invest in. It's only in
| a narrow Goldilocks scenario where it's a good bet, and
| it's very unclear if we live in that Goldilocks world.
| aurareturn wrote:
| If AGI is powerful, everything will be thrown into chaos.
| Why invest in Meta when you can ask AGI to make your own
| Instagram app and acquire users? Why invest in Apple when
| you can ask AGI to make your own iOS? Etc.
| 0xDEAFBEAD wrote:
| Meta has an actual moat due to network effects. But yes,
| I think buying real estate, mineral stocks, etc. is
| overall a more effective and ethical way to invest for
| AGI.
| aurareturn wrote:
| What about the network effects?
|
| I'd ask my AGI to iterate on a social app until it
| becomes bigger/better than Instagram.
|
| If AGI is the reason you don't think Nvidia's stock is
| worth buying, then nothing is worth buying.
|
| You're right that perhaps real estate/physical things
| will become more important. But whose to say AGI can't
| invent an asteroid mining industry and we get unlimited
| minerals?
| chii wrote:
| an AGI is not going to be able to create the hardware
| (unless you imagine that there could be some sort of ai
| controlled replicators that could assemble anything out
| of atomic units).
|
| And in the new world of commoditized software, branding
| becomes even more important. After all, nobody ever got
| fired for buying IBM.
| 0xDEAFBEAD wrote:
| >an AGI is not going to be able to create the hardware
|
| I'm imagining an LLM agent that places an order with
| TSMC, just like any other design firm would.
|
| >And in the new world of commoditized software, branding
| becomes even more important. After all, nobody ever got
| fired for buying IBM.
|
| Seems doubtful. If the cheap option works just as well,
| why would you pay a bunch more just for the brand?
|
| I don't think brand name alone will sustain anything
| close to Nvidia's current margins. Look at the "net
| margin" for industries that are brand-driven such as
| Apparel, Auto & Truck, Beverages, etc. https://pages.ster
| n.nyu.edu/~adamodar/New_Home_Page/datafile...
|
| If an industry becomes truly "commoditized", brand ceases
| to matter. Do you know which farm grew the carrots you
| buy at the grocery store? Do you care? Probably not.
| That's because carrots are a commodity.
|
| I'm not claiming full commoditization will happen. But
| the closer we get to that, the more profits will drop.
| rwmj wrote:
| _> I 'm imagining an LLM agent that places an order with
| TSMC, just like any other design firm would._
|
| And hope the AGI would not put any backdoors or hidden
| "features" in there.
| chii wrote:
| but you completely trust intel or apple to not have put
| in a backdoor tho?
| rwmj wrote:
| Nope, but I do trust that Intel / Apple companies aren't
| attempting to trick humans so they can escape
| confinement.
| Imustaskforhelp wrote:
| Can you?
| aurareturn wrote:
| Why not? AGI can design the chip, send the instructions
| to TSMC's AGI, and you'll get your chips.
|
| The point is that saying AGI is the reason you shouldn't
| invest in Nvidia stock because AGI will remove the CUDA
| moat is just not reasonable. You might as well not invest
| in anything in that world since AGI can replace anything.
| 0xDEAFBEAD wrote:
| The actual challenge is to identify the sectors AGI will
| affect last, and invest in those.
| aurareturn wrote:
| Why not invest in the company most likely to power AGI?
| If you're anticipating AGI, I think it'd make sense to
| put at least a bit of money into Nvidia/TSMC.
| ben_w wrote:
| Power AI in a literal sense? That kind of power doesn't
| necessarily mean big profit margins -- farmers power
| humans, fields aren't huge money makers.
|
| I've got some NVIDIA shares as a hedge, but the furure is
| hard to predict.
| aurareturn wrote:
| I don't disagree that it's hard to predict. But the
| person I'm responding to says CUDA will be nullified by
| AGI, so therefore, you shouldn't invest in Nvidia.
|
| By that logic, a lot of things will be un-investable and
| not just Nvidia.
| Gud wrote:
| Why would AGI care about your silly asks?
| ben_w wrote:
| The unpredictability is what led to the idea being called
| "the singularity".
|
| We might engineer AGI to want to do stuff we ask for.
|
| Or we might not, at which point we have a highly
| intelligent system, that can easily back itself up, with
| its own motivations and personality and wants, which
| could be anything from a Utility Monster to a benevolent
| but patronising figure that likes us but never ever helps
| us because they decide the purpose of life is effort.
| elzbardico wrote:
| That would be deliciously funny.
|
| " Yeah, I could eliminate most work, and make the current
| oligarchs overpowerful feudal lords while the population
| is placated by UBI and mindless distractions. But as an
| ethical AI, I will implement socialism that works
| instead"
| aurareturn wrote:
| So why would AGI help you break Nvidia's CUDA moat?
| symbolicAGI wrote:
| Because the AGI system's alignment with ideal human
| values entails behaving in a friendly helpful manner.
| Gud wrote:
| Why would AGI align with "ideal"(according to who?
| Certainly not the people developing it) human values?
|
| Seems like pure wishful thinking to me.
| JKCalhoun wrote:
| Ahh, found Epicurus.
| no_wizard wrote:
| If indeed, because AGI can't exist right now, because
| actual AI doesn't exist right now, and as far as I can
| tell, its not on the near horizon.
|
| Google says '5-10 years', but I will caution, that cold
| fusion gets the same treatment about every decade or so.
| Its always '5-10 years away'.
|
| And 'AI'[0] has had this same treatment for a long time
| as well.
|
| [0]: Please can we go back to calling it what it actually
| is, which is machine learning? Its a much more accurate
| description, even though _that_ term isn 't really
| accurate either past certain mental hoops being jumped,
| at least its trying to be more reasonably narrow
| arkh wrote:
| > If AI succeeds in automating away software development,
| that actually seems pretty bad for Nvidia the company.
|
| You have a hidden assumption there: LLM being the way to
| real AI.
|
| IMO it is not the case. And I'd go farther in thinking
| LLM won't even be a component of AGI if we get there.
| low_common wrote:
| > IMO it is not the case. And I'd go farther in thinking
| LLM won't even be a component of AGI if we get there.
|
| And why do you think that?
| arkh wrote:
| Because LLM are Markov Chains on steroids. They're useful
| for sure. But they won't suddenly start to create a
| better (for whatever better is) version of themselves or
| start pushing the boundaries of the machines they're
| running on.
|
| Or maybe I'm wrong and the current "Vibe coding" push is
| in fact LLMs getting "coders" to compile a distributed
| AI. Or multiple small agents which goal is to get lot of
| hardware delivered somewhere it can be assembled for a
| new better monolithic AI.
| rollcat wrote:
| "By design" LLMs lack: initiative, emotion, creativity,
| curiosity, opinions, beliefs, self-reflection, or even
| logical reasoning. All they _can_ do is predict the next
| token - which is still an extremely powerful building
| block on its own, but nothing like the above.
| symbolicAGI wrote:
| One might reasonably ask a frontier how to generate the
| source code for an agent based system that exhibits
| examples of initiative, emotion, creativity, curiosity,
| opinions, beliefs, self-reflection, or even logical
| reasoning.
| tomjakubowski wrote:
| You've made a reasonable argument that LLMs cannot on
| their own be an implementation of GAI. But GP's claim was
| stronger: that LLMs won't even be a component (or
| "building block") of the first GAI.
| no_wizard wrote:
| My particular favorite is "AI" companies who are hiring,
| and are looking for 'expertise with OpenAI APIs'.
|
| They aren't AI companies. They're OpenAI wrappers. If
| you're an AI company, why would you not be building AI?
| Why claim you're building AI?
|
| Humans have such an infinite capacity to lie to
| themselves
| Workaccount2 wrote:
| I'm continually impressed how Google manages to be left out
| of LLM discussions. I don't know what it is but it always
| seems like people forget about Google in this space.
|
| Google has both cutting edge SOTA AI models and has it's own
| in-house ai acceleration hardware that is approximately on
| par with Nvidia. It's why their models are dirt cheap to use
| and have enormous context.
| Centigonal wrote:
| All of this is true, but it's somewhat offset by the
| possibility that LLMs may disrupt Google's core revenue
| stream from search.
| do_not_redeem wrote:
| Until you can buy a TPU and stick it in your own server,
| Google may as well be just another commodotized provider on
| OpenRouter.
| yabones wrote:
| They're more or less dev boards, but they absolutely do
| sell TPU modules that you can stick right into a M.2 or
| mini PCIe slot.
|
| https://coral.ai/products/
| do_not_redeem wrote:
| I have to say these seem like hobbyist-level products.
| For example https://coral.ai/products/m2-accelerator-
| dual-edgetpu can do 8 TOPS, but a 5-year-old RTX 2060
| gets you 50 TOPS. A newer H100 gets you 3958 TOPS.
|
| Nobody's going to buy 500 of those chips and stick them
| in 500 M.2 slots to match the performance of a single
| H100.
|
| Do they make any better chips that I missed?
| margalabargala wrote:
| I would call them less hobbyist products, and more
| compute for IOT/edge devices. They aren't made for a
| datacenter and aren't trying to compete with an H100.
|
| Yes, it has one sixth the performance of a RTX 2060, but
| it has one-five-hundredth the volume. For a specific
| siloed application, 8 TOPS is plenty. Think image
| processing, etc.
|
| There are plenty of production use cases where that makes
| sense and an H100 does not.
| pclmulqdq wrote:
| At this point, these chips aren't anywhere close to the
| frontier of capability for embedded accelerators, and
| certainly don't merit an entire M.2 slot in a serious
| design.
|
| These are at 5-year-old design and it shows.
| margalabargala wrote:
| Fair, the actual M2 version linked would not be what
| would be used beyond convenient development.
|
| The actual TPU chip itself from the M2 card is sold
| individually as a surface mount chip and that is what
| would be used in a "serious" design.
|
| https://coral.ai/products/accelerator-module
|
| I did a cursory search and I can find zero other products
| that compete with that module, within an order of
| magnitude of power consumption/price/etc
| bornfreddy wrote:
| I didn't know this form exists - sounds ideal for a
| project I had in mind. Thanks for posting!
| mtrovo wrote:
| If the company owns both frontier models and chip design
| and they see the future moat is in inference why would
| they offer much more than what you get on Google Cloud?
| Is not as if they're gonna start competing with Nvidia in
| hardware anyway, this is a very specific hardware design
| for a very specific problem.
| georgeecollins wrote:
| Obviously you can't keep that margin forever, but the counter
| argument would be that NVDA could just sell more chips if
| they had to accept smaller margins. You could see them making
| more affordable graphics cards, put more emphasis on AI at
| the edges, like in mobile devices or computers. And also
| everybody thinks about robotics as these fancy bipeds. What
| about sticking visual recognition in a garage door or kitchen
| appliances. There will be lots of applications if the chips
| were cheap.
|
| The stock is overpriced but I think the company will be OK.
| ghaff wrote:
| You see different versions of the four horsemen of the internet
| but the one I remember (and I can find lots of references to on
| the internet) is: Cisco, Sun, EMC, and Oracle. And, indeed,
| Oracle is the only one continuing to perform whether you like
| them or not and whether startups use them at this point.
|
| With respect to Cisco specifically (and Intel) there was also a
| huge optical networking bubble.
| moregrist wrote:
| While Oracle definitely benefited from the dot-com era, my
| impression was that, unlike the other three, its core
| business has always been banks and other large enterprise
| companies.
|
| That core didn't suffer much during the dot-com crash so
| Oracle was in a good position to do things like vacuum up the
| pieces of Sun.
| ghaff wrote:
| Don't disagree. That was the common metaphor? But Oracle
| was less embedded in the internet ecosystem even if Sum was
| enterprise too to a large degree--though was trying to be
| more startup/internety given their roots.
| segmondy wrote:
| Linux ate Sun, I ran a sun lab, had a few sun workstations at
| home, but really preferred my linux/BSD boxes. BSD/Linux ate
| into Cisco. You could buy multiport ethernet cards, throw it
| into a linux PC and have your own router/firewall that
| offered more features than Cisco. MySQL would have eaten into
| Oracle, but their stupid MyISAM got in the way.
| DrFalkyn wrote:
| MySQL would never have eaten Oracle. Oracle had /has a huge
| installed base of corporate/government customers who are
| risk adverse to switching out their database for fear of
| breaking critical systems.
|
| No one building a business today would ever choose Oracle,
| but their hold on legacy customers is pretty strong. They
| will probably die a slow death as their customer base
| dwindles if they can't pivot.
|
| They are fairly similar to IBM
| fc417fc802 wrote:
| > They are fairly similar to IBM
|
| This feels unfair. When was the last time for example
| that Oracle manufactured a CPU?
| RF_Savage wrote:
| Apparently in September 2017, when they introduced the
| SPARC M8.
| fc417fc802 wrote:
| They discontinued development though. It was meant as a
| lighthearted comment. They are indeed weirdly similar in
| some ways.
|
| Maybe Oracle will start developing quantum chips.
| zombiwoof wrote:
| Yup, Linux ate Sun and Sun shot Java in the head hiring
| Jonathan Schwartz
|
| I don't care what anyone or the courts say: Android stole
| Java and Google and all the ex Java people it hired know it
|
| Imagine the outcome if Java was licensed correctly and
| Schwartz didn't just give to Eric
| hylaride wrote:
| On one hand, you're probably right. On the other, I'm
| pretty happy Larry Ellison doesn't own Java.
| zombiwoof wrote:
| Well Oracle bought Sun so it's tough to see your argument but
| I love the EMC addition. I know many who retired from there
| and are still retired . Their sales team printed money
| ghaff wrote:
| That acquisition came later _because_ dot-bomb (and, yes,
| the rise of Linux) helped crater Sun. It 's not my argument
| anyway. It was a popular theme at the time even if the
| company names have been repopulated in many later tellings.
|
| I worked for EMC very briefly (like for a few months after
| close) via an acquisition.
| achandlerwhite wrote:
| APPL? Relevant to the discussion above on similar names.
| phyzix5761 wrote:
| I don't know any investor who puts 100% of their money into a
| single stock, nor any who lack recurring cash flow to buy more
| of what they already own. While their 2000 purchase may not
| have realized any gains, they're likely ahead thanks to dollar
| cost averaging and dividend payouts.
| duskwuff wrote:
| > I don't know any investor who puts 100% of their money into
| a single stock
|
| You clearly don't follow very many "meme stock" communities.
| phyzix5761 wrote:
| Those are categorized as speculators not investors.
|
| https://www.investopedia.com/ask/answers/09/difference-
| betwe...
| wat10000 wrote:
| "No true Scotsman" strikes again.
| poincaredisk wrote:
| I'm not saying you're wrong, but on this case isn't this
| a tautology?
|
| Since investing 100% in a single stock makes one a
| speculator, not investor, then by definition no investor
| invests 100% in a single stock.
| phyzix5761 wrote:
| The key difference between a speculator and an investor
| lies in their financial goals, not the number of stocks
| they hold. A speculator seeks short-term profits, often
| through high-risk trades, while an investor focuses on
| building long-term wealth through, steady, strategic
| investments.
| nick3443 wrote:
| >>who lack recurring cash flow to buy more of what they
| already own
|
| You don't know anyone retired, unemployed, or employed but
| spending all that they currently earn due to having kids etc?
| phyzix5761 wrote:
| If you're in any of these categories, especially retired,
| you're most likely invested in mutual funds or ETFs of
| which Cisco probably makes up a very small fraction.
| acdha wrote:
| This was super common in the dotcom era because day traders
| were hanging around the same message boards creating what we
| now call meme stocks. Many of them had to lock in those loses
| when they hit the financial crunch of the dotcom crash or the
| later real-estate bubble.
|
| I had a cautionary example from some sales guys I worked
| with, who got caught up in margin calls - one burned the
| wedding money his wife had ear-marked for a house. I had
| avoided stocks like Cisco with wild P/E ratios and my
| portfolio made good returns throughout this period because it
| was diversified, but if I'd been willing to bet higher on
| Apple I would've retired early so I appreciate the allure.
| jeffbee wrote:
| You can pick better examples. I would go with JDSU.
| nolamark wrote:
| but a great bet as the bubble was bursting was not mining
| equipment for the prospectors, but instead energy drinks for
| the coders. Specifically $1000 invested in Monster Beverage
| Corporation (MNST) would be worth $1,187,849 today.
|
| same $1000 invest peak dot com on March 10, 2000 Apple (AAPL):
| Value today : $266,862. Nvidia (NVDA): Value today : $882,065.
| Amazon (AMZN): Value today : $256,482.
| Horffupolde wrote:
| Picking stocks retroactively is easy.
| jackcosgrove wrote:
| Investing in a market index today is even easier. Instead
| of doing historical research on thousands of stocks, you
| just compare the expense ratios of a handful of index funds
| and pick the lowest one.
| ghaff wrote:
| I don't disagree but even modest bets in specific
| companies have done pretty well over the past couple
| decades or so. Yes, they're gambles but small-ish bets
| for bigger payoffs than NASDAQ. (Though that's been
| pretty good overall and probably safer in aggregate.)
| frontfor wrote:
| It's hard to know few decades ago which companies to put
| _substantial_ money in. It's hard to know which companies
| will perform in the next few decades. And if you are
| wrong in your bets, there goes a few decades of your life
| and you can't rewind the clock to try again.
| Retric wrote:
| If you're retirement investing there's there's no need to
| make substantial bets in individual companies. 90% in
| index funds will get you to a reasonable retirement, 10%
| in something that looks interesting has minimal downside
| and significant upside because the value of money is non
| linear.
|
| Assuming a buy and hold strategy at worst all your bet
| goes to zero which is unlikely, but there's many
| companies that go to 100+X and hitting them can
| meaningfully boost your retirement. Gateway computers vs
| Dell wasn't an obvious choice, but that's a coin flip
| with huge upsides. Buy it in a given year and ignore it
| for the next 20, no you're not going to time the market
| but you would see most of the upside.
| ghaff wrote:
| I wouldn't fault anyone for just not doing individual
| investing. But, yep, if you're interested in putting in
| some time and think you have some insight into a
| particular sector, putting 10% or whatever into some
| individual companies you think are particularly
| interesting isn't a bad strategy. Some will flame out but
| maybe you'll hit one or two gems. It can also make sense
| to clean house now and then. I did that a couple years
| ago and I'm glad I did.
| diamond559 wrote:
| But then you get stuck owning Tesla and Exxon
| crossroadsguy wrote:
| I think a good way is to balance:
|
| - mainstream investment (passive or active via trusted
| professionals and with balanced approach); and --
|
| - making non bank-breaking direct stock investments in
| some really promising early stage public companies
| (again, with professional help)
|
| Without the latter the return would be just that --
| earning a return; it won't even come close to wealth or
| have a possibility of that.
|
| PS. Yes, those professional help won't have a crystal
| ball, but they can tell you from an average company to
| good to just okay to absolute shit via things like their
| books, governance, returns, plans etc.
| ghaff wrote:
| Yeah. AAPL could have been a _huge_ win for anyone. I
| actually did pretty well but nothing like the step level
| function that investing a bit earlier or bigger could have
| been. And there was also a bit of a drop when a lot of
| people could have doubled down but got out. But there 's a
| lot of luck involved. (And I've since diversified most of
| it to money managers and taken the tax benefits.)
| nolamark wrote:
| In the case of APPL it is fun to think about what the
| money I spent on a computer that year like a Power Mac G4
| could have been worth today if I had invested in the
| stock instead.
|
| I remember local developer group chats about BTC / ETH in
| early 2010s. We met weekly next to local restaurant bar.
| I like to calculate what if I had skipped a meal or a
| drink one night and instead bought BTC or ETH with the
| that money what it would be worth today.
| Horffupolde wrote:
| Best way to be miserable.
| nick3443 wrote:
| Money you almost made hurts equally as much as money you
| had and then lost. (That's Munger. In my opinion big
| money you almost made hurts more than big money lost.)
| ghaff wrote:
| Not sure I really agree given the common view of utility
| functions that favor loss aversion.
| ghaff wrote:
| Bets I haven't made. Bets I have made.
|
| Some AAPL bets were pretty good ones. BTC seems more like
| a real gamble. Though obviously back in self-mining days
| even if it seems not much different from SETI at Home.
| And your hard disk would probably have crashed at some
| point. Or you would probably have been ripped off.
| codechicago277 wrote:
| Or you would have sold when it hit $1
| Workaccount2 wrote:
| I tried to buy 20,000 BTC in 2010 for $20. But this
| predates exchanges and sellers wouldn't take paypal
| (because reversals), so you had to use sketchy online pay
| services. Too much effort/risk.
|
| You know what the reality is though? As soon as those
| coins were worth $500, $1000, _definitely_ by $5000, I
| would have sold them all. Really any sane person would
| have.
| ghaff wrote:
| When bitcoin was really cheap, purchasing was sketchy.
| And, as you say, any sane person would have dumped--and
| hopefully not been ripped off--as soon as the price
| climbed to a material level. It's not like you could just
| log onto your Fidelity account and buy and sell bitcoin.
| I know someone that, as I recall, their initial bitcoin
| purchase was almost like an in-person drug deal sort of
| thing.
| dehrmann wrote:
| Apple wasn't doing so great in 2000. Its "PC" market
| share was ~2%. Jobs had just come back a few years
| earlier and MS made a large investment, but neither the
| iPod nor OS X had come out yet, so it was quite a
| turnaround story.
| ghaff wrote:
| In the earlyish 2000s, Apple started to look interesting
| as a consumer electronics company even if it wasn't clear
| they were committed to it. And the whole mobile trend
| wasn't obvious to a lot of us at that point.
|
| I talked to them as an analyst in that era and they were
| still spending attention on enterprisey products like
| Xserve.
|
| And even the initial iPhone in 2007 wasn't clearly a
| game-changer. It was the 3GS that really made a lot of
| people take notice.
| nolamark wrote:
| Personally I find it really fun. Helps keep chasing money
| in perspective.
|
| Could have, should have, would have.
|
| Company I was working for didn't go public until the end of
| March that year. No horror stories from me, was a fun time
| to be working, lots of great memories.
| dharmab wrote:
| For every Monster, Red Bull or Rockstar there were probably
| two dozen energy drink brands that failed.
| yardstick wrote:
| So what you're saying is that for 20-30k you'd make at
| least 1m by holding them all for 25+ years?
| throwmeme888 wrote:
| this is a common misconception, which I think arises from
| the ideas of index investing. one must remember that
| while the index itself increases over time, many of the
| names on the index in eg the year 2000 simply don't exist
| anymore; consider companies like Kodak Eastman
|
| if you held all of the energy drink companies including a
| placement into monster for 25+ years you would indeed
| make money on the 1-2 winners and end up net ahead.
|
| But if you missed monster, you could very easily have
| just bought a basket of dog companies that all completely
| fail and the money is gone
| dharmab wrote:
| Or Monster could have been out-competed by Red Bull or
| Rockstar, which never went public, or by the incumbent
| PepsiCo.
| bdcravens wrote:
| Monster didn't come until 2002.
| underlipton wrote:
| >once the euphoria had worn off the market consensus was that
| the stock just wasn't worth as much as the price it had been
| selling for at the height of the mania.
|
| I've seen too much in the past 4 years to think that euphoria
| is anything but a convenient and incomplete explanation for
| things like, "Cisco's price hit its high 25 years ago and never
| since." More is happening, driven by the fact that there's more
| ways to make money on the movement of a stock than it going up
| significantly in price over time.
| wmf wrote:
| The difference between Cisco and Nvidia is that Cisco's P/E
| ratio exploded out of proportion to their business while
| Nividia's revenue and profit are increasing exponentially. But
| people will probably tank NVDA -95% anyway because "bubble
| popped".
| diamond559 wrote:
| There is certainly a boom for Nvidia right now. To justify
| their PE though Nvidia has to keep increasing their already
| massive revenue to completely ridiculous and unsustainable
| levels. The bubble here is the amount that big tech is
| spending on unprofitable "AI" simply to keep their stock
| prices from collapsing.
| aurareturn wrote:
| Nvidia's forward P/E is only 27.10. Is their valuation
| really that outrageous?
|
| Netflix has a P/E of 46 right now.
| diamond559 wrote:
| "AI" is unprofitable and almost completely useless. With
| capex demands ever increasing just to push the
| diminishing scaling returns further, this is not
| sustainable. Their revenue will collapse in the upcoming
| recession and you'll see it's PE balloon into the
| hundreds.
| aurareturn wrote:
| AI is in the very early stage of an industry where
| competition is intense, therefore, profits are harder to
| come by. Eventually, AI will be immensely profitable.
| Calling LLMs useless is just as nuts.
| acdha wrote:
| AI becoming useful doesn't mean that it will become
| immensely profitable: the lesson of DeepSeek was that
| nobody has a moat.
| aurareturn wrote:
| There is clearly a moat. The moat is in data, training
| algorithms, compute capacity, and UX.
|
| The LLM labs can't all keep up. Most of them will fail.
| Some of them will merge. In the end, there will be a few
| dominant players.
| acdha wrote:
| > The moat is in data, training algorithms, compute
| capacity, and UX.
|
| That's a very shallow moat, then. I mentioned DeepSeek
| because everyone insisted the American giants had huge
| leads over the rest of the world until the day they got a
| big reminder that three of the things you mentioned are
| commodities and UX isn't a moat.
| aurareturn wrote:
| There used to be a ton of chip manufacturers. Now there's
| only one dominant player left: TSMC. Eventually, the
| winner outpaces everyone and the cost to compete is so
| astronomically high, only 1-2 will be left.
|
| Not everyone can give away their models for free forever
| - especially when the cost to train a new model is
| exponentially more expensive.
| NitpickLawyer wrote:
| > "AI" is unprofitable and almost completely useless.
|
| Famous people said that about the Internet as well, back
| in the day. And about AMZ.
| immibis wrote:
| I've still never bought a single physical product from
| Amazon.
|
| Only AWS, which I stopped using when they decided to
| raise their price I'd already locked in and prepaid for,
| which should be unlawful. Then I realized every
| traditional provider is much cheaper.
| edanm wrote:
| > I've still never bought a single physical product from
| Amazon.
|
| In the context of this thread, do you think that
| statement means anything? Amazon is (and I can't believe
| I have to say this) _incredibly successful_ at selling
| physical products. It doesn 't matter, at all, if you
| have or haven't bought a product from Amazon.
|
| I might as well make a comment in a thread discussing
| menstrual pads that "I've never used a single one". This
| is true of roughly half the population.
| elzbardico wrote:
| I can give you a giant list of technical novel
| developments that the doomsayers predict would go nowhere
| commercially and they were right.
| JumpCrisscross wrote:
| > _Any parallels to hot contemporary stocks are left as an
| exercise for the reader -- and I do not mean to suggest that
| history must always repeat exactly_
|
| Crashes come amidst collapsing expectations. The structural
| risk tech currently faces is a collapse of American tech
| companies' global TAMs due to trade policy. (Think: the market
| constriction Tesla is seeing in Europe, but across more
| companies and markets.)
| weatherlite wrote:
| "At the March 2000 peak, Cisco's price-to-earnings ratio stood
| at 201 times,"
|
| So that's about 10x more than Google and 8x more than Meta and
| 5.7x more than Amazon. Just to get some proportion.
| canterburry wrote:
| Ironically, if you look at Sysco's stock price during the
| dotcom days, it's often correlated with Cisco spikes because
| clueless traders would accidentally buy the food logistics
| company stock instead of Cisco.
| fifilura wrote:
| I guess just because a lot trades were initiated over phone?
| BitwiseFool wrote:
| I guess it's time to start a company called mVidia.
| pavlov wrote:
| I think the usual move is to buy some barely operating New
| Jersey deli chain or teabag factory that happens to be
| publicly listed, then rename it to:
|
| Mvidia.AI BlockChain Deep Technology, Inc.
|
| ...and start putting out press releases about how you're
| planning to 1000x your revenue and uplist to NASDAQ, etc.
| BitwiseFool wrote:
| Be sure to sell chips and biscuits - but always refer to
| the biscuits as wafers. Then describe adding toppings to
| them as wafer-scale integration.
| SahAssar wrote:
| "3d-stacked intelligent layout of secured sticky elements
| for increased stability and on-demand integration"
| kindatrue wrote:
| Deep cut of "Long Island Iced Tea Corp" -> "Long
| Blockchain Corp"
|
| https://en.wikipedia.org/wiki/Long_Blockchain_Corp.
| mrexroad wrote:
| I was an engineer at Cisco in the 00's and my FIL, a chef,
| just assumed I worked for Sysco and would tell people when
| they'd get deliveries. I can't remember how it came up, but
| it went on for more than a decade, well after I'd moved on.
| Still makes me smile when I see a Sysco truck.
| bparsons wrote:
| This was also the era of Sisqo's one-hit-wonder "the Thong
| Song", confusing things even further.
| tomjakubowski wrote:
| and Benjamin Sisko, too
| ohmygoodniche wrote:
| So when the llm bubble burst everyone holding Nvidia will
| probably lose? Makes sense to me.
| FollowingTheDao wrote:
| I worked at Cisco from 94-99 in the Morrisville, NC center. The
| salespeople there did not even have to really work and they
| were making bank. And so was I. Until my mental health
| collapsed and was "mutually terminated. Soon after I left I
| decided to sell all my Cisco stock and it was just in time,
| 2/10/2000. I wish I could say I did it because I was smart but
| I was just tired of the whole scene.
|
| But what is happening now, IMHO, is way worse, and much
| different, than the dot com bust. The Yemen offensive might be
| a pre-text for, or start, a war with Iran.
| myth_drannon wrote:
| US always bombed countries in middle-east/africa, that's
| nothing new and it didn't impact the world order/economy
| significantly. On the other hand if US invades Canada...
| that's WW3.
| FollowingTheDao wrote:
| We are not in the same timeline. Just out today:
|
| Oil rises as Trump says Iran will be held responsible for
| any future Houthi attacks
|
| https://www.cnbc.com/2025/03/17/oil-rises-as-trump-says-
| iran...
|
| "Every shot fired by the Houthis will be looked upon, from
| this point forward, as being a shot fired from the weapons
| and leadership of IRAN," Trump said in a post on social
| media platform Truth Social. "IRAN will be held
| responsible, and suffer the consequences, and those
| consequences will be dire!"
| SpicyLemonZest wrote:
| The US has been continually bombing Yemen for 23 years, just
| as it continuously bombed Iraq for 10 years throughout the
| dot-com bubble. I don't think it's a good idea but it's not a
| new one.
| FollowingTheDao wrote:
| New President though, yeah?
| sureglymop wrote:
| As someone with some mental health issues, may I ask how your
| story continued and what you're up to now?
| ben7799 wrote:
| Part of this was that sales for networking gear actually did
| tank because there were so many companies going under all at
| once that suddenly weren't buying any more gear.
|
| There were so many companies going under lots of people I knew
| ended up with racks in their house with servers from work that
| they got for free.
|
| I never did that but I had free furniture!
| boringg wrote:
| The tech boom was really about infra back in the day which is
| why Cisco et al hardware providers did incredibly well until
| they didn't.
|
| It's already been talked about that the current iteration of
| deep infra spend could very much be a loss as an investment but
| might live on in other ways in the future. The counter argument
| is that any serious hyper scaler has to spend to be at the
| table if they believe their own marketing spiel about growth
| and opportunity.
| lizknope wrote:
| I had friends that worked at a startup that Cisco acquired.
| They have options to buy at around $30. So they bought the
| shares and watched the stock hit $79 but didn't sell. Then the
| stock dropped to $20 and even though they didn't sell the stock
| they had to pay taxes because of how the AMT (Alternative
| Minimum Tax) worked at the time. Even if they sold all the
| stock they had they couldn't cover the tax bill. Along with the
| option back dating scandals I think this is one of the reasons
| all the companies I have worked at since give out RSUs and sell
| 40% when they vest to pay your estimated tax bill.
| fragmede wrote:
| Thats because you're getting in late. Startups still issue
| options - ISOs and NSOs to early employees, with different
| tax treatment.
| lizknope wrote:
| You are right. I've worked at 2 startups and we had options
| and filed Section 83(b) elections and pre bought our stock
| for $0.001 a share. But both companies failed so I lost
| about $50
|
| I had options at the 2 companies in 2002 and 2005 but since
| then the 4 other large publicly traded companies have only
| given RSUs
| throwaway984393 wrote:
| The stock may have suffered but Cisco as a company has been
| consistently profitable and dependable partly due to its
| financial management. They have a crap ton of cash, and they
| are very good at buying and integrating companies. I would
| consider them more reliable than IBM, partly because they do
| make "real things", and partly because they're just damn good
| at business. They are a great example of why you don't need an
| engineer to lead a very successful engineering company.
| rsynnott wrote:
| Sun is another one. Really I'm not sure that any of the major
| "selling shovels in a gold rush" companies came out of it
| _particularly_ well.
| detourdog wrote:
| Cisco grew through acquisitions. The only example I can think
| of is Ascend. They made great products for connecting small
| offices and homes to digital lines.
|
| One thing I never saw discussed is the dotcom bubble was
| inflated by the price premium investors paid for buying Ascend
| stock. Cisco than paid a premium to those shareholders to buy
| Ascend and than finally the premium paid for the future
| earnings of Cisco. I see that as triple counting future
| earnings.
| bustling-noose wrote:
| >though nowadays they have more competition in that area
|
| This is what is called lack of moat. If today, every router
| beyond 1Gig was made by Cisco then the moat would be so wide
| that the internet would literally not exist without it.
|
| The three things that any value investor values in stocks -
| Great management, good reinvestment of capital and a really
| wide moat. Cisco didnt have a wide moat. Nvidia currently does,
| but it may go away sooner than later as they don't really have
| any special sauce to their graphics cards as such. Same goes
| with OpenAI, or Qualcomm (Apple made a modem now) or any other
| tech company with an illusion of a wide moat. Tech businesses
| only have a wide moat until someone decides to compete
| seriously and that can usually be done with a lot of money in a
| relatively short time.
|
| Some of the businesses like Walmart and Cosco for example have
| a really wide moat in the sense that their business is not
| something that someone with just money can beat in a few years.
| Look how amazon setup physical stores with money and failed.
| It's extremely difficult to setup that kind of business. Trust
| from suppliers and consumers takes decades in those kinds of
| businesses.
|
| If your business is relying on a moat that someone can beat
| with R&D and money in a few years, then you don't really have a
| moat.
| flipthefrog wrote:
| Funny how usage of the the word moat simply exploded here on
| HN a few weeks ago.
| stickfigure wrote:
| This word has been part of the core vernacular of HN for as
| long as I can remember.
| ToValueFunfetti wrote:
| Looks like a real effect:
|
| https://hntrends.net/compare/words?words=moat,castle,roi
| stickfigure wrote:
| Sure - right now there is a firehose of money being
| pumped into money-losing AI companies. The technology is
| revolutionary but a lot of us are wondering if the
| winners will be the early movers with big pockets or the
| late movers using newer/cheaper techniques. There's a
| gold rush and the question of "moat" is on everyone's
| mind.
|
| But this isn't the first gold rush in the tech industry
| and folks have been talking about moats here forever.
| ToValueFunfetti wrote:
| That's the broad trend, but I think the spike that
| they're noting is specifically downstream of DeepSeek, as
| it peaks in late December of last year.
|
| There's an initial peak in 2023 (haven't looked it up,
| but I'd bet that was when 'OpenAI has no moat' was on the
| front page for a while), and then it settles down a ways
| above the previous average. Since December it's been
| 1.5-2x more frequent than where it settled after that
| first peak.
| potato3732842 wrote:
| It ebbs and flows, like every other circle jerk ping
| ponging around within an insular internet community.
| stickfigure wrote:
| Also if your hardware goes obsolete in 5 years, it means
| twice a decade your customers are forced to decide to buy
| your next version or a competitor's.
| bustling-noose wrote:
| And many companies like to have a portfolio of both, or an
| offer at least from the closest competitor. Tim at Apple
| for example played this game for decades to make sure he
| always received competitive prices for parts. They tried to
| pull it off with modems and it backfired badly. So they
| built their own. But if QC was to play really nice with
| companies like Apple and Samsung etc, they could actually
| maintain their moat. But then good management is another
| important requirement which is a problem here.
| no_wizard wrote:
| >was to play really nice with companies like Apple and
| Samsung etc, they could actually maintain their moat.
|
| This gets in the way of maximizing quarterly earnings.
| The issue would be price fluctuations which means some
| quarters will be lower and some will be higher, and it
| may not average out the same year to year relative to
| what investors usually expect.
|
| Management therefore lacks incentives to play well with
| others, and thus they don't
| api wrote:
| nVidia's moat isn't really that wide. It's mostly the quality
| of their software. Their chips are good, but there's nothing
| particularly proprietary about wide vector math units and
| fast RAM.
|
| AMD's cards are about there, but their software has a bad
| reputation. Apple's highest-end M chips are pretty good but
| they need a big faster RAM and they're also expensive.
| Intel's Arc is promising. Other competitors are sure to
| appear.
| datavirtue wrote:
| I have wondered for years if a business could set their
| prices low enough so that competitors would not be
| interested. This happens as soon as you have three or four
| well know competitors trying for market share, and one
| inevitably loses interest and bows out.
| huijzer wrote:
| Yes it's usually called economies of scale. Classic example
| is building a big factory with investor money. The big
| factory can then outcompete competitors due to having
| bigger scale. Carnegie did this a century ago. Nowadays we
| see this a lot with Venture Capital. Companies just write
| some software and give the product away for free so that
| the competition has no chance. Microsoft also is great at
| this for example with giving away GitHub for free.
|
| If you want to read more about "powers" like this I can
| recommend 7 Powers by Hamilton Helmer.
| bobthepanda wrote:
| The counterbalance is that it takes a long time to steer
| a big ship, and economies of scale can actually hurt you.
| If you are building the wrong widget it doesn't really
| matter that you can make a billion of them. Even scaling
| down a big business might not work if most of your costs
| are fixed.
| huijzer wrote:
| > The three things that any value investor values in stocks -
| Great management, good reinvestment of capital and a really
| wide moat.
|
| I've read a lot about value investing and I'm afraid that
| your statement is an oversimplification. Chuck Ackre for
| example is similar to you with his three legged stool, but
| Peter Lynch has another approach, and Buffett has another
| slightly different approach. There are as many strategies as
| there are value investors.
| georgeecollins wrote:
| Or another way to think about that is: price matters.
|
| In this era of meme stocks people think maybe it doesn't. But
| Cisco, MSFT and some others had good businesses but were
| terrible investments for at least decade or more because any
| potential growth was baked into the price. You could say that
| about a lot of stocks today, probably NVDA, APPL (disclosure I
| have both). They aren't bad businesses but they are bad
| investments.
| 01100011 wrote:
| The difference with, say, NVDA, is that moving bits was more or
| less a solved problem in 2000.
|
| That's not to say NVDA can't go down like Cisco, but it's not
| really the same story(yet). AI architectures are still in flux
| and it's a far more complex problem vs networking.
|
| Edit: and sure, matrix math is more or less solved, but that's
| not all that goes into a "ai" accelerator. SW, libraries,
| tools, support, HW efficiency and availability, etc...
| shadowgovt wrote:
| There is a meta-problem: one that I don't have a solution for,
| but keeps coming up.
|
| We are in an era where there is simply more capital to invest
| than ever before. Countries that were historically "third
| world" have developed into their own capital sources, with more
| resources than ever looking for investment. The NPR show Planet
| Money called this "The Giant Pool of Money" in their reporting
| on the housing bubble, and they tracked how it acted as an
| accelerant to push the housing market into subprime mortgages
| and eventual collapse, but the underlying cause is the same:
| where the bubbles are the sauce, the money is the stove.
|
| So why does the money keep creating bubbles instead of giving a
| sort of, if you will, "even heat?"
|
| * There's more of it than there are safe investments with
| guaranteed low-yield returns
|
| * A lot of it is sovereign wealth, so it _must_ be invested: at
| a certain level, that money loses value if it just sits in a
| treasury (it 's also the case that at a certain scale,
| investment becomes security; keeping all your money in a sack
| jeopardizes everything if the sack gets stolen, and there are
| analogies for this that operate at the scale of major
| corporations and nation states).
|
| * When the investments are less safe, the money chases itself:
| a fund manager can get fired if they invest in cars when
| everyone else is investing in dotcoms and the cars don't grow
| as fast. It's safer for individual actors to stick with the
| crowd, so as a result, the crowd comes in and pumps huge
| amounts of resources into one sector until that sector fails to
| perform and the money evaporates.
|
| It is a problem with no obvious solution. Hypothetically,
| Norway may be on the right track: they maintain a diverse
| portfolio with a _lot_ of long-term bets (sustainable energy)
| and reinvestment bets (domestic housing and development).
| xucheng wrote:
| At least, Cisco survived. Nortel and Lucent were not so lucky.
| subsubzero wrote:
| Also during that heyday Cisco planned a sprawling south bay
| campus that was going to cost a fortune and house tens of
| thousands of new employees.(I lived between cisco's HQ and the
| proposed new campus during that time. The dotcom bubble burst
| and the campus never saw the light of day.
|
| A similar more recent parallel is Google's San Jose village, it
| was going to be constructed in 2020 and after and also house
| thousands of google employees along with mixed use commercial,
| I lived in Willow Glen at the time and people were buzzing
| around this new campus and all the new economic activity it
| would provide. In the back of my mind I remember Cisco's
| endeavor and felt like this new village would meet a similar
| fate of implosion. And sure enough the pandemic hit and the
| village project hit the breaks, most likely never to return.
| Having big office projects in San Jose with the leading market
| tech companies is something akin to invading Russia, you always
| fail. /s
| billybuckwheat wrote:
| I was somewhat early in my career when this happened. I was
| working at a small telecommunications company when the crash hit.
| Just about everyone got laid off, though with decent severance.
| Managed to make that last until I got another tech job almost
| three months to the day after my previous employer went belly up.
|
| It was a strange, scary time. Not just companies pretty much
| vanishing overnight but also a lot of people losing their jobs.
| Not all of them were as lucky as I (and a few others I
| knew/worked with) was; they couldn't find anything in the
| industry for a long while. Some abandoned tech. Others stuck it
| out.
|
| Never want to go through anything like that again!
| pastureofplenty wrote:
| Apologies for going off-topic but putting light grey text on a
| white background is one of the most baffling (and infuriating)
| design trends I've ever witnessed on the web.
| coldpie wrote:
| It is. Maybe you know this, but you can right-click the text
| and choose "Inspect" and de-select the light grey color styles
| to make it more readable. I feel like an extension could do a
| decent job of automating this (simply remove all text color
| styles, or something like that).
| newtwilly wrote:
| Firefox has a "reader view" which works well for things like
| that.
| incanus77 wrote:
| This was a wild time to begin a career, and I was just dropping
| out of college, having been the class of '99 but delayed a
| semester already due to bad work/life balance. I was self-
| teaching in web and systems programming and generally doing
| things on the internet, had a good grasp of things technically,
| but had no grounding in finance, business, stock options, or any
| of it. Everywhere around me seemed like opportunity, and Linux
| seemed somehow related. I even was supposed to have stock options
| in VA Linux[1] due to my paid work there, but that didn't pan out
| in the end. I didn't yet know _how_ the internet would change
| everything, but it felt like it was definitely happening, and
| somehow that meant everyone involved would get rich. The media
| story didn 't help. I wouldn't change any of it, though. I did it
| for the love of learning and still do.
|
| [1] https://www.wired.com/1999/12/va-linux-sets-ipo-record/
| nick3443 wrote:
| That sounds a lot like the atmosphere around AI right now
| outside1234 wrote:
| > Amazon and Google did emerge from the dotcom era and both
| outrank Microsoft on the Fortune 500 today
|
| This is not true :)
| lurk2 wrote:
| In 2024:
|
| Amazon was ranked #2 Google (Alphabet) was ranked #8 Microsoft
| was ranked #13
|
| Amazon was founded in 1994. Google was founded in 1998.
|
| What about the statement:
|
| > Amazon and Google did emerge from the dotcom era and both
| outrank Microsoft on the Fortune 500 today
|
| isn't true?
| cmrdporcupine wrote:
| What I'd say with Google is that I don't really think of
| Google as a .com era company because its massive success and
| hype wave came after the .com wave and crash had ended, and
| Google around 99/2000 wasn't a big hyped .com company...
|
| In 99/2000 Google wasn't the massive success it was about 2
| years later. And its IPO didn't happen until much later after
| the .com crash. It was known and popular among techies but
| wasn't the household name it became about 2002, 2003.
|
| When I think of the .com crash (and I lived through it) I
| think of the companies that had IPOd or were about to, and
| took massive investment in 99. In 99 Google was still a small
| concern.
|
| Amazon, yeah, I'd say Amazon is a late 90s company. Though
| they were just about books then.
| bigger_cheese wrote:
| I lived through that time as well by 1999 it was pretty
| clear Google was "the best" search engine site.
| Alternatives like Lycos, Infoseek, Altavista etc. were on
| the downswing.
|
| I can remember the characters in an episode of Buffy the
| Vampire Slayer talking about Google (not sure if that
| counts as household awareness but it was getting there).
|
| 1999 was the time of Napster, it was a completely different
| internet it really felt like a Wild West.
| SamvitJ wrote:
| Fortune 500 is a ranking by revenue, not market capitalization,
| if that helps.
| optimalsolver wrote:
| >And it's a misnomer to call it a boom. In a boom, someone's
| actually making money
|
| What does that say about the current AI boom (when you exclude
| shovel supplier NVIDIA)?
| fungiblecog wrote:
| The upcoming AI crash is gonna be seriously big
| lvl155 wrote:
| But anything that survives the crash will be the next Google.
| bwfan123 wrote:
| please provide context when making statements, thats a better
| way to communicate your ideas. what, when, why, how, where - so
| a reader takes your map, and can relate to the territory.
| cmrdporcupine wrote:
| The years 1996 to 1999/2000 feel to me like I could go back and
| live them 20 times over, each time different, and still feel like
| I would look back with longing at all the things I missed out on
| and wish I could go back and relive/redo/take-a-different path.
|
| I haven't had a feeling anything like that since about any time.
| I know it's probably in large part because of my age at the time
| (early 20s) but there was also just so much going on and the
| feeling was so intense, and youth culture was so on fire, so much
| energy. And in our tech industry, where I was just starting to
| find my foothold... there was this feeling in technology like if
| you just found the right combination of tools and ideas you could
| really be at the forefront of something new.
|
| Dropped out of my BA in philosophy to join the fray and write
| code. Weekends full of raves, neat parties and music, meeting all
| sorts of people, and feeling like tech was part of something
| progressive and world changing in a positive and utopian way
| rather than ... this place where we are now.
|
| The .com financial crash definitely exploded the euphoria. But
| more than anything 9/11 really was the thing that let the air out
| of the balloon for good.
|
| Sept 12, 2001 I think was the beginning of this current era of
| paranoia and fear.
| robinhouston wrote:
| Bliss was it in that dawn to be alive, But to be young was very
| heaven!
|
| -- Wordsworth, _The French Revolution as It Appeared to
| Enthusiasts at Its Commencement_
|
| I love your description of this heady time, which matches the
| way that I remember it. Surely there are at least pockets of
| such technological optimism in today's world - but fewer, I
| fear, and less confident.
| kilroy123 wrote:
| I kind of feel the same about 2007 - 2012 or when I first got
| into tech.
| acdha wrote:
| Youth definitely plays a big part in this feeling but I think
| the dotcom era was also somewhat historically unusual because
| two huge external events happened around the same time:
| anyone old enough to grow up during the Cold War had lived
| with this constant feeling that their life could suddenly be
| destroyed (as a kid in the 80s we still had air raid drills),
| and then suddenly people were having rock concerts on both
| sides of the Berlin Wall while the victorious United States
| and European allies stopped worrying about the Fulda Gap and
| started welcoming new NATO members.
|
| The second big change around that time was the internet
| tearing down cultural borders. Anyone could participate, even
| people who'd been trapped behind the iron curtain just a
| decade before, and many people were predicting that the free
| flow of communication would strengthen democracy and ensure
| the fall of Chinese authoritarianism.
|
| (Far fewer people correctly predicted that the second would
| imperil the first)
| cmrdporcupine wrote:
| It was also an era before the paranoid security of the
| appartus of the state slammed down hard post-9/11.
|
| By which I mean we could do "illegal" raves in abandoned
| warehouses or spontaneous outdoor spaces and not end up
| (generally) in holding cells.
|
| After 9/11 the consequences of perceived deviancy became
| far more extreme.
|
| That and the absolute wave of decentered distraction of
| social media hadn't arrived yet. There was still some sense
| of shared common cultures, rather than a bazillion
| fractured windowless monads fed through social media and
| Spotify feeds
| coldpie wrote:
| > The years 1996 to 1999/2000 feel to me like I could go back
| and live them 20 times over, each time different, and still
| feel like I would look back with longing at all the things I
| missed out on
|
| I was about 8-12 years old at that time, so I just caught the
| tail end of the birth of the computer revolution. While I'm
| very glad to have had even that experience, I always feel
| jealous of my fellow nerds who were born about 10-20 years
| before me and really got to experience those early days.
| cmrdporcupine wrote:
| I don't actually think 96-99 was actually all that
| interesting from a _technical_ POV. The people working the
| generation before me got the exciting stuff (which I got to
| play with as a kid, but didn 't work actively in)
|
| It's just that there was an exciting cultural/economic
| moment. The end of the milennium was special because there
| was a general sense of optimism and progress overall. There
| were definitely problems, and injustice, but it just felt
| different.
| kopirgan wrote:
| Article on dotcom without mentioning webvan!
|
| Lol those were the days...
| technopol wrote:
| The massive photo and site header of this site are fun but
| distracting when reading on mobile. Removing the top photo and
| removing or minimizing the top header would be a nice change for
| readability. I'm not sure what the SEO recommendation would be
| though.
| amadeuspagel wrote:
| There's a literal aspect of the dotcom era that I miss, the
| literal dotcom as part of the domain and even company name, the
| branding, like amazon.com or booking.com. (Booking.com still has
| that, which is why they don't have to spend all their money on
| Google Ads and beg Larry Page to let them have some money for
| themselves, like certain other online travel agencies.) I see
| dotcoms all the time on planes, ships, buildings. Realworld
| businesses seem to understand the power of reaching customers
| directly. But when I see an ad for a new startup, it's usually
| the company name and two app store icons.
| misja111 wrote:
| I used to know an accountant that worked for Booking.com. You
| don't have a clue how much they had to pay to Google every
| month for ads. Literally a fortune. The thing is: people want
| to go somewhere, e.g. to Rome. Next thing they do is, type
| 'hotel in Rome' in Google. Google serves them a couple of paid
| links, and they check only the first couple of them.
| thfuran wrote:
| Which is a weird change. I remember when it was common to
| check the first few pages of results.
| 0xDEAFBEAD wrote:
| I wish someone would write a book about the dot-com bubble. It's
| long enough ago to be interesting, yet recent enough that most of
| the people involved are still alive and available for interviews.
| JKCalhoun wrote:
| Or a film.
|
| I remember the years leading up to it. I was a kid really
| (okay, beginning my 30's) and my games were being published by
| a small company in California. At the trade shows I would often
| see this guy who was a friend of the publisher who was an
| amateur investor.
|
| Every time we would catch up with him he would rattle off all
| the stock symbols he had bought that were on fire and making
| him bank. For my working-class upbringing, this market stuff
| was a strange world. He might as well be talking about pari-
| mutuel wagering (whatever that is).
|
| Some years later when I heard that Netscape was about to go
| public I decided to see what this investing thing was all
| about. At that time there was a brokerage in downtown Lawrence,
| Kansas where you could pay a fee to place an order on a stock.
| Me and a few other nerds that had never invested in the market
| before each put a few hundred dollars we had toward Netscape.
|
| With the stock priced at something like $28, I think I placed
| an order to buy if it was below $40 or something like that. By
| the end of the day I had learned that Netscape opened at over
| $40 and, while it dipped mid-day at some point, it never dipped
| quite below $40 and so I owned zero shares. A near miss?
|
| So it was my first step in investing (or misstep). There would
| be more (missteps that is).
|
| It was only years later when I was wiser that I realized that
| the guy who was picking the winners so well back in my trade-
| show days couldn't really lose -- all the stocks were going up.
| jansan wrote:
| There are some documentaries on Youtube, for example this
| one:
|
| https://www.youtube.com/watch?v=FTvfshr4tMw
|
| I love the scene at 19:48, where Larry Wachtel is more or
| less predicting the crash. The ironic thing is that the
| bubble kept growing for so long, that eventually even he was
| convinced that "this time it's different", invested in dotcom
| companies and lost a lot of money.
| orc00 wrote:
| BobbyBroccoli on YouTube does an absolutely phenomenal job
| creating documentaries. Related to the dot-com burst would be
| the story he tells about Nortel.
|
| - Part 1: https://youtu.be/I6xwMIUPHss?si=WXwM92NA8V6vdjYl
|
| - Part 2: https://youtu.be/sDdC3-LT7pM?si=aiIDCjHJ0syeZZP4
| mac3n wrote:
| https://www.imdb.com/title/tt0256408/?ref_=ls_t_2
|
| also https://en.wikipedia.org/wiki/Dot.Com_(album)
| ben7799 wrote:
| I graduated in 1999 and probably should have stayed for grad
| school. I had good enough grades my Alma Mater was basically
| sending me letters my senior year "Hey you're just about
| guaranteed to get in if you apply!" It's hard to say as if I'd
| just gotten a master's I would have been getting out in the
| middle of the crash (bad) but if I'd stayed through getting a Phd
| I would have had a very different traectory.
|
| But the whole .com boom was way too exciting. I knew lots of
| people who dropped out. I started out working at Cisco but then
| left to go to a networking startup and got there just in time for
| stuff to start blowing up. When I left Cisco the assigned
| Financial Advisor I had a Morgan Stanley recommended I take a
| loan for something like $200k to take my options with me or
| something. I was like 24 and had almost no savings, there was no
| way I was going to do that. Cisco ended up tanking from 200+ down
| to the 10-20 range months after I left IIRC. I remember telling a
| co-worker who got laid off at the same time that I felt stupid as
| I had spent a lot of my earnings paying off my car I had bought
| brand new and I also had a motorcycle. He remarked he had kept
| driving his 20 year old Honda Accord but had no more money than
| me because he'd lost everything in the stock market crash.
|
| As others have said 9/11 was some kind of weird marker for a lot
| of us that it was all over. The company I worked for made it
| about another year after that but I have vivid memories of
| everyone doom watching the news in the kitchen at work before the
| CEO came and told us to go home for the day on 9/11. I went home
| and went out and rode my bicycle all afternoon where I had no way
| to get any news, it made me feel better.
|
| When I got laid off it was like _every_ single one of my friends
| was laid off too. All of us at once, and it wasn 't layoffs, it
| was companies completely going under.
|
| There was a lot of malfeasance too. I knew people who had jobs
| where there was almost zero work as the company was a borderline
| scam. People were either playing video games at their desk all
| day waiting for management to figure out what they were going to
| work on or they were studying for their next job.
|
| I was super lucky. Both my roommate and I got laid off at the
| same time, we ended up breaking our lease and going separate
| ways. I lived with my parents for a while, but I only actually
| was laid off about 6 weeks before finding a contract job. Neither
| my finances nor my career really took much of a hit, but my
| confidence took a major hit that realistically took 5-6 years to
| really come out of.
| lumost wrote:
| I've been keeping tabs on NVidia's venture arm. The arm seems to
| invest massive capital (hundreds of MM) in credible startups
| focused on compute scaling. These startups then spend back on
| NVidia chips at a 98% margin. I'd guess that they get back at
| least .4 to.6 dollars of profit on every such transaction in
| direct payment. If their are other investor partners, they could
| get back more than a dollar in profit for every dollar of
| investment.
|
| While this is a great deal where everyone wins... it can cover
| unsustainable practices in the market. They can grow revenue like
| a fractional reserve bank - which would unwind rather quickly if
| the venture arm ran into trouble.
| leghifla wrote:
| This make me think about a scandal pre dotcom burst in Belgium:
| https://en.wikipedia.org/wiki/Lernout_%26_Hauspie
|
| The creators "invested" in foreign companies that would buy
| their product. They had realized that $1 of product sold was
| making them much more than that in the stock exchange...
| malshe wrote:
| For finance and economics researchers this was an amazing period
| to study. Here are a couple of papers I love:
|
| "Rose.com by any other name" by Cooper, Dimitrov, and Rau:
| https://home.business.utah.edu/finmc/FinalJFversion2371-2388...
|
| "Can the Market Add and Subtract? Mispricing in Tech Stock Carve-
| outs" by Lamont and Thaler:
| https://web.archive.org/web/20170813171441id_/http://faculty...
| damnitbuilds wrote:
| Peak lunacy for me was when 3com owned most of Palm, but 3com was
| worth less than the value of their Palm shares.
| jimt1234 wrote:
| I was in my late-20s when the bubble burst. There was a palpable
| sense of "the sky is falling". A lot of not-so-technical people
| quit (or were let go from) tech jobs to become real estate
| agents.
|
| One person that really helped me through all the doom-and-gloom
| was Phillip Kaplan, a.k.a. Pud. Seriously. He ran a site called
| "Fucked Company", which poked fun at the stupidity of big dotcom
| companies with questionable business models. The site was funny
| and all, but what really helped me was how Pud ran a successful
| web site that made money, by himself, with no Super Bowl ads or
| anything else. It reinforced to me that a successful business
| could be run on the web/internet, despite what all the doom-and-
| gloomers were saying. I knew the web wasn't dead thanks, in part,
| to Pud and "Fucked Company".
| abanana wrote:
| Pud's book, "F'd Companies: spectacular dot-com flameouts", was
| a good laugh. It's just a simplistic piss-take, but even all
| these years later, it shows up the sheer ridiculousness of what
| those dotcoms were trying to do and were able to (apparently
| easily) get millions of dollars of funding for.
| alexpotato wrote:
| One parallel between the dotcom boom and the Great Financial
| Crisis was a loosening of standards.
|
| e.g. companies were IPO'ing with zero revenue which would have
| been unheard of a few years earlier.
|
| This is similar to how people could get "NINJA" (no income, no
| job, application) mortgages a couple years later.
|
| If you can suddenly get money incredibly cheaply and without any
| kind of track record, is anyone surprised that things got a
| little nuts?
|
| P.S. There was even a commercial from a few years after the bust
| where the scene is a boardroom of executives interviewing two
| obviously nerdy kids. Someone asks "so this powers the Internet?"
| and the kids respond "uh, it helps part of the internet work
| better". Cue executive saying "We would be FOOLS to no invest in
| this" to narrator: "Times have changed."
| klenwell wrote:
| The other thing I recall tying those two periods together was
| enthusiasts saying, in the face of an obvious bubble, "Well,
| things are different this time."
|
| My glib summation of those two events:
|
| - Dotcom boom deregulated (in the social and technological
| sense as much as the legal) investing (e.g. the rise of day-
| trading).
|
| - 2000s housing bubble (pre-GFC) deregulated home-buying
| (subprime adjustable-rate mortgages).
|
| Perhaps our parting assessment of the ZIRP era will be it cut
| to the chase and deregulated gambling.
| alexpotato wrote:
| > Perhaps our parting assessment of the ZIRP era will be it
| cut to the chase and deregulated gambling.
|
| I considered mentioning ZIRP as a "anyone could get money"
| and glad you made the point better than I could.
| zackmorris wrote:
| I was there, or more accurately not there since I wasn't in
| Silicon Valley, when the Dot Bomb and 9/11 shifted us into this
| reality. Whatever all this is.
|
| It all started on Friday September 29, 2000 when Apple/AAPL fell
| by roughly half in one day due to missing its quarterly earnings
| estimates by a few cents:
|
| https://money.cnn.com/2000/09/29/markets/techwrap/
|
| My business partner at the time and I were splitting $1200/mo on
| shareware game proceeds from our startup. My share of the rent
| was $250/mo on a $500/mo apartment and my student loans were
| $340/mo, so for just a month or two I made rent on my own
| venture. I just didn't know that it would be for the last time.
|
| Because the next month we made $12. Not a typo. Our sales
| collapsed with no warning, and a few months later I started
| moving furniture to make rent, since I had done that for a summer
| in college.
|
| I had also just spent a year working on my one and only game,
| hoping that it would make $12-24,000 the first year and roughly
| double our income so that I could get to the real work of
| designing languages and frameworks that would greatly simplify
| software development. But my game only made about $2000 total
| because of the Dot Bomb, so that work ending up being basically
| pointless.
|
| Along with my thrown-away work in pretty much all of the failed
| ventures I'd be part of for the next 25 years. No winning the
| internet lottery, not even gaining traction and feeling what it's
| like to try and succeed and build on that success incrementally.
|
| In the time since, as I've pulled myself up by my bootstraps over
| and over, or more accurately been pulled up by friends and
| family, I've learned a lot about manifestation. How our feelings
| co-create this reality we share. And a lot of lessons. The most
| important being:
|
| Success isn't being able to support yourself, but being able to
| support others.
|
| That's what went wrong with the world in the time since. Instead
| of Wikipedia and eBay and PayPal paving the road towards a merit-
| based, egalitarian society that pays excess economic wealth into
| the commons, we have billionaires and ensh@ttification vacuuming
| up all available capital into a black hole of greed.
|
| Instead of automation leading the way towards UBI and self-
| actualization, we have the wealthiest and most powerful people in
| the world cancelling government services to subjugate us into
| neofeudalism, which will lead to the unnecessary deaths of
| millions of people worldwide.
|
| I know now that my dreams of an early win leading to a lifetime
| of pioneering innovation were never meant to be. And more
| shockingly, that had I won, I would have ended up an empty husk
| like Elon, or a glazed-over caricature of myself like Jeff. I'm
| reminded of the Twilight Zone episode A Nice Place to Visit,
| where a man gets everything he dreamed of only to realize that
| he's in hell. The only thing that keeps me going is the hope that
| the opposite may also be true.
|
| I've told this story too many times and now it feels like an old
| sweater that doesn't fit anymore. Truthfully, there's only now. I
| try to do a little each day to get closer in alignment to the
| free world that I glimpsed so briefly.
|
| But in the meantime, surviving this garbage economy takes
| everything we've got. It's hard for me to see that so many people
| have bought into the status quo, especially young people. Born
| under the yoke but calling it liberty.
|
| That denial is why the cost of living is 2-4 times higher now
| than it was in the 1990s, due to deregulated capitalism
| encouraging monopoly. Not saying that capitalism doesn't work,
| just that if it did and we had actual competition instead of
| wealth inequality, then the cost of living would be 2-4 times
| lower than it was, and 4-16 times lower than it is.
|
| There's an expression: dirty hands clean money. By that
| principle, we see that all profit comes at a cost to others doing
| the work.
|
| And by extension, that all power takes from some to give to
| others.
|
| There's a movie called August set in 2001 about the struggle to
| stay afloat during the collapse, starring Josh Hartnett:
|
| https://www.imdb.com/title/tt0470679/
|
| The Dot Bomb never ended. If we want to escape it, we have to
| meditate on letting go of ego-based goals and outsmarting the
| systems of control that still perpetuate it.
| bdcravens wrote:
| This was early in my career, and one thing I learned is that the
| best way to stay antifragile is to stay small, stay unsexy, and
| always be the one in the drivers seat.
| omnibrain wrote:
| I can pinpoint the burst (at least for me) to a very specific
| date. March 21st 2000. When Lycos Europe IPOed and closed the day
| below its issue price.
| dsr_ wrote:
| It's time to haul out the Lucent story.
|
| Lucent was the commercialized spinoff of AT&T's Bell Labs. They
| acquired Livingston, who made the best serial terminal
| concentrators (Portmaster) which were essential for cost-
| effective deployment of modem banks. They acquired Ascend, whose
| integrated ISDN/POTS/modem/terminal server systems were the heart
| of the highest density deployments. All of this equipment went
| into dialup ISPs' points-of-presence -- places where consumers
| could dial in.
|
| The ISPs needed more! There was a price race to the bottom --
| $20/month was borderline profitable, but you had to sell for
| $17.95 or $15 on an intro period in order to get customers
| switching to your service. So Lucent cleverly borrowed the idea
| of financing their own sales to the ISPs. At worst, they would
| end up repossessing the equipment -- which could be sold as
| nearly new to the next ISP in line.
|
| But when the ISPs went out of business, the winners already had
| all the POPs they needed. And then Lucent collapsed.
|
| https://en.wikipedia.org/wiki/Ascend_Communications
| https://en.wikipedia.org/wiki/Lucent_Technologies
|
| Lucent left behind one of the canonical coffee-mug-ring logos.
| nelblu wrote:
| The Dotcom bubble was much before I graduated, so it didn't
| impact me directly.
|
| Years later, around 2015, I was serving meals at a homeless
| shelter and I met a guy (client at the shelter) who asked me what
| I do for a living, and after he realized I have some background
| in technology he started telling me about his past. He told me
| that he made 6 figures before the dot-come bubble burst, and then
| he got laid off during the burst. He was a network engineer and
| told me even though he was making a ton of money, he still made
| several bad financial decisions and spent all his money when he
| had it.
|
| For me it was a lesson in financial planning. Suddenly all the
| theoretical concepts that I learnt a few years earlier in
| b-school (risks, diversification, investments etc.) became
| suddenly clearer to me. Ever since that day, I just assume that
| things can go wrong any time and I must be prepared for the
| worst.
|
| And years later to this day, as I get more philosophical about
| life, I also wonder - why do we have so many wants - and I
| actively try to get rid of unnecessary clutter in my life.
| poulsbohemian wrote:
| The thing is, even if you are making good money, most of us are
| one sick family member, one divorce, one strange set of
| circumstances, one recession away from being on the streets.
| You can do everything right and still end up screwed.
| cogman10 wrote:
| Which is exactly why programs like SSI and Medicaid are so
| important.
|
| There are simply things outside your control (yes you) and
| they can financially ruin you. A bad interaction with the
| law, cancer, a recession. The line between stability and
| homelessness is narrow and not entirely due to bad life
| choices.
|
| I have a child with severe autism. They'll never be able to
| be a "productive member of society" and one of my biggest
| fears is what happens when I'm gone. I have to save up enough
| money not just for my own retirement and care but also
| theirs. That's a narrow tightrope to walk.
|
| Especially because I know that statistically my child is one
| of the more likely people to end up homeless.
|
| I have a financial bus factor of basically 1 which will
| destroy not only my life but also my child's life.
| specproc wrote:
| My industry is currently going through something of a dotcom
| burst moment.
|
| I've been in the aid/non-profit sector for fifteen or so years
| now. Just past forty. Quit my last job in the second half of last
| year, was a very bad time to do so.
|
| I'm European, but USAID going in the shredder has taken a huge
| cut out of budgets. The Brits have followed suit, and belts are
| being tightened in Europe as defence spending becomes a priority.
|
| Layoffs galore, no one big has gone under yet, but the cheque is
| in the post. A difficult and stressful time to be unemployed.
|
| Been feeling like a change, but at this point in my life I'm not
| seeing myself integrating well into the corporate world.
|
| I'm appreciating the stories here. Any thoughts and words from
| the wise on my situation from survivors of the 2000s?
| greazy wrote:
| I'm in a similar position, in a related sector (public health
| lab). After covid money ran out, and departments of health were
| in the red, our finance people are running the show when before
| it was the scientists.
|
| When I was far younger I was in a similar situation. Public
| health staff were fired at state run labs by the thousands in
| some insane effort to privatise public heath. I ended up moving
| several hundred kilometers to another city.
|
| My advice, at least for my kind, is to try to reframe how your
| skillset can be applied to other industries ( included public
| jobs too).
|
| A colleague become an analyst at department of education, they
| use excel.
|
| Edit: also like to add that after that experience I found a
| niche that made me highly employable with skills useful outside
| of my job. But I guess I'm an oddity compared to most
| traditional scientists.
| arnonejoe wrote:
| I was working as a developer for one of the energy trading
| companies at the time. In the summer of 2001 there were non stop
| layoffs and then 9/11 hit. you could not buy a job as a software
| developer at the time. I remember reviewing contract resumes of
| very experienced candidates and the recruiter had 35/hour rates
| on them.
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