Essays
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- Programming Bottom-Up - Страница 1
- Lisp for Web-Based Applications - Страница 3
- Beating the Averages - Страница 6
- Java's Cover - Страница 12
- Being Popular - Страница 14
- Five Questions about Language Design - Страница 24
- The Roots of Lisp - Страница 28
- The Other Road Ahead - Страница 29
- What Made Lisp Different - Страница 44
- Why Arc Isn't Especially Object-Oriented - Страница 45
- Taste for Makers - Страница 46
- What Languages Fix - Страница 52
- Succinctness is Power - Страница 53
- Revenge of the Nerds - Страница 57
- A Plan for Spam - Страница 65
- Design and Research - Страница 72
- Better Bayesian Filtering - Страница 76
- Why Nerds are Unpopular - Страница 82
- The Hundred-Year Language - Страница 90
- If Lisp is So Great - Страница 97
- Hackers and Painters - Страница 98
- Filters that Fight Back - Страница 105
- What You Can't Say - Страница 107
- The Word "Hacker" - Страница 114
- The Python Paradox - Страница 117
- Great Hackers - Страница 118
- The Age of the Essay - Страница 125
- What the Bubble Got Right - Страница 131
- Bradley's Ghost - Страница 136
- Made in USA - Страница 137
- What You'll Wish You'd Known - Страница 140
- How to Start a Startup - Страница 147
- A Unified Theory of VC Suckagepad - Страница 159
- Undergraduation - Страница 161
- Writing, Briefly - Страница 166
- Return of the Mac - Страница 167
- Why Smart People Have Bad Ideas - Страница 169
- The Submarine - Страница 173
- Hiring is Obsolete - Страница 177
- What Business Can Learn from Open Source - Страница 183
- After the Ladder - Страница 189
- Inequality and Risk - Страница 190
- What I Did this Summer - Страница 194
- Ideas for Startups - Страница 198
- The Venture Capital Squeeze - Страница 203
- How to Fund a Startup - Страница 205
- Web 2.0 - Страница 217
- How to Make Wealth - Страница 222
- Good and Bad Procrastination - Страница 233
- How to Do What You Love - Страница 236
- Are Software Patents Evil? - Страница 242
- The Hardest Lessons for Startups to Learn - Страница 248
- How to Be Silicon Valley - Страница 255
- Why Startups Condense in America - Страница 260
- The Power of the Marginal - Страница 267
- The Island Test - Страница 275
- Copy What You Like - Страница 276
- How to Present to Investors - Страница 278
- A Student's Guide to Startups - Страница 282
- The 18 Mistakes That Kill Startups - Страница 290
- Mind the Gap - Страница 297
- How Art Can Be Good - Страница 305
- Learning from Founders - Страница 310
- Is It Worth Being Wise? - Страница 311
- Why to Not Not Start a Startup - Страница 316
- Microsoft is Dead - Страница 324
- Two Kinds of Judgement - Страница 326
- The Hacker's Guide to Investors - Страница 327
- An Alternative Theory of Unions - Страница 336
- The Equity Equation - Страница 337
- Stuff - Страница 339
- Holding a Program in One's Head - Страница 341
- How Not to Die - Страница 344
- News from the Front - Страница 347
- How to Do Philosophy - Страница 350
- The Future of Web Startups - Страница 357
- Why to Move to a Startup Hub - Страница 362
- Six Principles for Making New Things - Страница 364
- Trolls - Страница 366
- A New Venture Animal - Страница 368
- You Weren't Meant to Have a Boss - Страница 371
What the Bubble Got Right
(This essay is derived from an invited talk at ICFP 2004.)
I had a front row seat for the Internet Bubble, because I worked at Yahoo during 1998 and 1999. One day, when the stock was trading around $200, I sat down and calculated what I thought the price should be. The answer I got was $12. I went to the next cubicle and told my friend Trevor. "Twelve!" he said. He tried to sound indignant, but he didn't quite manage it. He knew as well as I did that our valuation was crazy.
Yahoo was a special case. It was not just our price to earnings ratio that was bogus. Half our earnings were too. Not in the Enron way, of course. The finance guys seemed scrupulous about reporting earnings. What made our earnings bogus was that Yahoo was, in effect, the center of a pyramid scheme. Investors looked at Yahoo's earnings and said to themselves, here is proof that Internet companies can make money. So they invested in new startups that promised to be the next Yahoo. And as soon as these startups got the money, what did they do with it? Buy millions of dollars worth of advertising on Yahoo to promote their brand. Result: a capital investment in a startup this quarter shows up as Yahoo earnings next quarter-- stimulating another round of investments in startups.
As in a pyramid scheme, what seemed to be the returns of this system were simply the latest round of investments in it. What made it not a pyramid scheme was that it was unintentional. At least, I think it was. The venture capital business is pretty incestuous, and there were presumably people in a position, if not to create this situation, to realize what was happening and to milk it.
A year later the game was up. Starting in January 2000, Yahoo's stock price began to crash, ultimately losing 95% of its value.
Notice, though, that even with all the fat trimmed off its market cap, Yahoo was still worth a lot. Even at the morning-after valuations of March and April 2001, the people at Yahoo had managed to create a company worth about $8 billion in just six years.
The fact is, despite all the nonsense we heard during the Bubble about the "new economy," there was a core of truth. You need that to get a really big bubble: you need to have something solid at the center, so that even smart people are sucked in. (Isaac Newton and Jonathan Swift both lost money in the South Sea Bubble of 1720.)
Now the pendulum has swung the other way. Now anything that became fashionable during the Bubble is ipso facto unfashionable. But that's a mistake-- an even bigger mistake than believing what everyone was saying in 1999. Over the long term, what the Bubble got right will be more important than what it got wrong.
1. Retail VCAfter the excesses of the Bubble, it's now considered dubious to take companies public before they have earnings. But there is nothing intrinsically wrong with that idea. Taking a company public at an early stage is simply retail VC: instead of going to venture capital firms for the last round of funding, you go to the public markets.
By the end of the Bubble, companies going public with no earnings were being derided as "concept stocks," as if it were inherently stupid to invest in them. But investing in concepts isn't stupid; it's what VCs do, and the best of them are far from stupid.
The stock of a company that doesn't yet have earnings is worth something. It may take a while for the market to learn how to value such companies, just as it had to learn to value common stocks in the early 20th century. But markets are good at solving that kind of problem. I wouldn't be surprised if the market ultimately did a better job than VCs do now.
Going public early will not be the right plan for every company. And it can of course be disruptive-- by distracting the management, or by making the early employees suddenly rich. But just as the market will learn how to value startups, startups will learn how to minimize the damage of going public.
2. The InternetThe Internet genuinely is a big deal. That was one reason even smart people were fooled by the Bubble. Obviously it was going to have a huge effect. Enough of an effect to triple the value of Nasdaq companies in two years? No, as it turned out. But it was hard to say for certain at the time. [1]
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