The NASDAQ is flirting with a 15-year high again and people are screaming “overvalued!”, “tech bubble 2.0!”, and “irrational exuberance!”
The biggest difference in technology between 1999 and 2015 is the internet — vastly greater connectivity, speed, and adoption.
Just 36% were online in the US in 1999 (primarily dial-up) while 87% are online today (nearly all broadband). Globally, only 4% had an internet connection in 1999 while 42% have it today.
Here’s a personal example of mine regarding internet speed:
In 1999, I was a huge fan of KOZMO.com. KOZMO regularly delivered dinner to me in my exhausted state after work. They would send a guy on a bicycle to bring me a meatloaf sandwich and a movie. It was wonderful.
The company was gone two years later, but the problem wasn’t KOZMO as much as it was the internet. Even though I worked for the world’s leading silicon manufacturer, I had dial-up internet! I had to go home, boot up my computer, wait for a dial tone, dial into the internet, wait for the “welcome” screen, wait while the website came up, then wait for the pictures to load…
It probably took 10-12 minutes each time I placed an order. It made much more sense to run to the convenience store where they had 100x the selection.
Imagine what KOZMO could be with today’s internet. I could submit the same order, from my phone, from anywhere, in about 15 seconds. THAT is what changes something like KOZMO from a novelty to a game changer.
Companies that are killing it right now, like Uber and AirBnB, would never have survived the non-mobile, dial-up years.
Timing is everything.
It’s a different tech landscape now. We have solid internet penetration, near-instant speeds, and widespread mobile internet.
Stop comparing 2015 to 1999. Maybe valuations are climbing for real this time.
The internet that the original dot-coms needed to succeed is here. Now.