This Is What It Was Actually Like To Live Through The Tech Bubble

thank you. You know. The flip side of not doing the Odd Lots Podcast with you is that I get to listen to them on my own time, which is something I don't do when I record them with you. Obviously, good point. So that'll be my excuse when I when I take off a few weeks. At some point, I'll just say, oh, it's because I really just wanted to give them a fresh listen and not hear them biased by my own partic the patient. I'm sure that will be the case, do you know. Obviously we talk a

lot about bubbles on the show. Last year we had a whole series about various bubbles throughout history, and then we had a bunch of episodes I think about bubbles that weren't even part of the series. I'm sure we'll have many more. It's just one of our recurring themes for obvious reasons. Yeah, bubbles remain I think personally, probably the most interesting phenomenon that we observe in markets, because there's all this collective behavior and sort of psychology involved

in every single one. Right. I think it's like when psychology takes hold to such a dominant degree and the underlying reality of what's going on seems to exert just such a minimal force in the underlying market. I think that's a good way of describing it. The other interesting thing about it is, of course, you never know when a bubble is going to pop, right, because a bubble that doesn't pop is also known is a really good bull market. Right. It's one of these things where we

only can definitively say something it's a bubble in the aftermath. Yes, all bubbles are retrospective in nature. Well put, So, you know, the thing is, we talked a lot about these from a sort of like you know, market perspective, like what are the signs that something is in a bubble and what are price movements that suggest something is in a bubble, and you know, that is certainly one way to examine it.

But what we haven't done is much is talk about, like what it's like to actually live your life through a bubble, the perspective of a person who is just sort of right in the middle of it, someone right on the inside, as opposed to a speculator. Right. I really like this idea because it gets again to that behavioral aspect of bubbles. How do people actually behave and live when they are going through this kind of episode. So today I'm very excited We're going to be uh

talking with our colleague Dash Bennett. He works with us here in Bloomberg. He's an editor, he does social media for us, he does a bunch of other stuff. We both worked with him for many years. And what's interesting and why I'm excited about talking to Dash is that he lived through the dot com bubble. Like so all this stuff that we talked about people are trading it in the stocks. He was actually working for one of

these companies whose stock went completely insane and then totally imploded. Right. And the way this podcast is coming about is we were having a sort of casual conversation on our internal messaging system, and Dash started saying some really interesting and slightly outrageous things about what his whole experience was like, and we thought, we need to dig into the details of this right exactly. So, without further ado, Dash Bennett, thank you very much for joining us. Thank you good

to be here. So let's get started with your history. Tell us where you were in nine what so we we already set it up. You were working for one of the companies that were sort of most emblematic of the dot com era. What was the company, how did you join them, and what were you doing for them? Yeah, it's kind of a became a legendary story of the dot com bubble bursting. So at the end ofning of two thousand, I was actually living in New York and

I had oppen out of college. Long I was like trying to become a writer and it wasn't going very well. And then a friend of mine from high school, who was he went to the same high schools, maybe he was a few years older, emailed me out of the blue and said, hey, we're looking for writers. I worked for this company excited Home, which I had never heard of. I sort of knew what Excite was because that was the big web portal, like a big rival to Yahoo.

It was like a second tier Yahoo. Yeah. So about a year earlier, at the beginning of ninety nine, it merged with at Home, which was a broadband I s P basically and where they sold internet connections through cable companies, and they had separate deals with the cable companies. Now it's all run by the cable companies back and at Home was its own thing. So they merge and that was a huge thing at the beginning of ninety nine,

and their stock went through the roof. So they had all this money, and so they started creating content teams to create web content for their portal that would be exclusive to at Home. And so my friend had been working there for a few months and he was like, I'm writing about sports. I know you know about sports. We need people, why don't you come out here. So since I was looking for work, so they flew me out there and put me up for two weeks as

a test as like an interview, which was crazy. So that's already crazy, the fact that they two weeks for an Yeah, me, a person who had at that time had no Byelines. Had no experience as a paid professional writer, so that, yeah, they flew me out there. They gave me like a two week tryout, basically hired me as a contractor. It went really well, so then they hired me full time. So again this just give you more

sense of like how much money is playing around. First of all, they were paying me a salary that I never thought I would make at that stage of my life. But then they flew me out to their office was in Redwood City, California, which is just south the Sound Cisco. They put me up for thirty days in a temporary housing. They got me a rental car for thirty days, They hired a broker to help me find an apartment. They

paid for all of that. So that was just sort of the first sign that this company has a lot of money and they're spending it very quickly. And the team I was on was growing. They were adding people all the time. There was about at its peak was about thirty people of writers, web designers, artists, all working to just create this sort of like little mini newsroom

inside this technology company. So two things on that when you heard about this company and you heard about the position, were you thinking at all that this was a sort of risky venture. And um, was there any sense that you were working for a technology or a dot com company or did you just think this is a sort

of run of the mill content provider. No, it very much had the like all the stereotypical traits of like a dot com phenomenon thing where we had a slide in our office, one of those like that's it went from the second floor down to the first floor. You know, when I showed up at the office, it was very clear that it had It had all those like things you always hear about. There was foosball table and ping

pong tables, and there was free food everywhere. When I first started, there was you know, they brought in lunch once a week every Wednesday, we got a free everyone our team got a free lunch. And there were vending machines all over the offices but they were all free. So all the sodas and snacks, and we had bagels every morning, and so it didn't feel like a real company, but it also didn't feel like this was the thing. We were just trying to get as much as we

could before it all fell apart. At the time when I started. It was very much like this is the future of the Internet, This is the future of the world. That's my memory of it too. I mean I wasn't working for any dot com at the time. I wasn't I didn't even have a job, But I remember like at the time, it didn't feel like, oh, this is crazy, it's about to end. It felt more like this is the future. Like everyone believed like this is the new economy.

We were in a new year of prosperity, businesses of the future or going to have this sort of freewheeling vibe. So in retrospect you look at the slide and you say, oh, well that was obvious excess. But in that moment, it's like, no, the office of the future will be this fun place to play around. Yeah it was. It was. There were no cubicles, it was very much open off and a lot of those things you still see today as like the hallmark of a young, exciting company. It's all the

same things they were doing twenty years ago. We have an open office here Bloomberg, and we have a great snack bar. Sadly, we do not have a slide from the would be Laura, right, that's our one area of restraints. But this gets to one of the big lessons that we learned from our Bubble series, which is that every bubble comes with a convincing story that you have to

believe in. So Dash, I know you mentioned it already, but could you maybe just expound a little bit on what the story was for excite, Like what exactly the promise was way back in early two thousand's. I've been thinking about a lot, knowing I was going to come on here, trying to remember back to the days of

what was going on there. And what I keep coming back to is that so many of these companies and ours that especially, they were trying to create a model for like how you would provide internet to people, and that model still exists today and it's actually the dominant model, but they were I don't know if it was because they were too early, or you know, they couldn't expand too much, or you know, or people were expecting too much too soon because of all the hype. But basically

at Home was a broadband provider. They hooked people. You know, you paid forty dollars a month, they gave you a modem, they hooked you up to the Internet and they decided that well, but like a O L where you were in this when you dialed up to a O L. You were in this like their environment and their browser and all that. They were trying to do the same thing. But for broadband, which was still broad and was still relatively knew that and not a lot of people had.

Most people were still dial up cable Internet was very expensive and most places you simply couldn't get it. That is a good point. It's like, in a way, they were just way too early, because if you think about even the media, what we're seeing in media today, where of an entity like Comcast, this huge infrastructure provider, but also which makes incredible content investments at the same time, it does sound like the excited mom. That's what they were,

That's what that was. The idea was they bought Excite, which was the port because at the time that's how people got an Internet was portals. It was a O L. Yahoo, Those were our big competitors. So they're like, we'll buy it, will buy our own portal, we'll stick them together. Now

we have everyone in this contained universe. So they come to our site, they do all their shopping, they do all their web browsing, we can serve them ads, we can also sell them things, and then we're also on top of that, we're making a month that they paid. Again real quickly before I forget to ask what month did you start, because you know, thinking about the timeline of all this, we know the bubble peaked in March two thousand, but when did you started? Excited? That's I

think I started in March two thousand. It was either February March of two thousand it was, and it was right after two tho. You started right now, Yeah, I was like I right at the peak of the ball. But about a year earlier was when there happened. Stock was the stock was up somewhere around a hundred, and they're already starting to be problems under the surface, because when I started a year later, it was down to like thirty interesting thirty or forty. So you mentioned the

merger just then. I think this was part of this thing that went wrong for the company, right. They just spent a ton of money on mergers, and there was this frenzy at the time everyone wanted to grab market share. Walk us through what that was like living it from a corporate perspective. Yeah, so the merger obviously brought in a ton of new cash to the company, is my

understanding of it. And they kind of did go on a huge spending spree, not just hiring more employees of their own, but also sometime in ninety nine, shortly after the merger, it became a kind of legendary thing. They bought a company called Blue Mountain Arts. It was billion dollar greeting carcase there was online greeting card company to basically just email little animations to your friends of like

happy birth. I want to say, my dad uses Blue Mountain Greeting Cards system to this day, and he uses it as a replacement for email, so all his email messages to me basically come in the form of electronic cards. I hate this company. Dash Yeah, they still exist, but excite paid. I looked it up. It was like eight hundred and fifty million dollar deal and like million dollars

in cash. I have to say, like, I remember that deal, and I know we're like, oh, at the time, it all seemed normal, But I do remember distinctly thinking like even amidst all this euphoria, thinking that it's like this seems a little weird, Like that was kind that was like the first sort of red flag that even at the time people were like, really, you're going to pay that much money for a Greek like they're like corny,

like animated. Oh yeah, yeah, they were the because you know, again, not a lot of people had broadband internet, so you couldn't send like huge gifts or videos through the email. So it was a very weird thing. And then they they set up there, they so they brought them in, they set them up on our offices, and then two years later, when when the company fell apart, they sold the whole thing for thirty five million dollars, which is like no, nothing, So you got there. It was right

around the overall market peak. But but after they had peaked, so you must have been working with a lot of people who at one point, we're worth millions of dollars on paper, and day after day watching their paper wealth sort of literally vanished. So I'm curious, like, what's that Like. There were a couple of people there who were actually had been employees before the I p O. And they got stock options, which was against a standard thing even

back then. So yeah, on paper they were millionaires, and they had sold some of their stock when the stock was sky high and made a lot of money. But we're still continuing to work there, and nobody, nobody at my level, like was able to, like cash out and retire, or they might have been able to if they had timed it perfectly, but they obviously no one did. And you could see the frustration for them, especially as all

their wealth is tied up in this company. And again they were sold this idea that this is a company that's gonna last for a long time, this is the

future Internet. And as the company started to slowly fall apart and people began to sense that this was not going well and it didn't look like it was going to get better, obviously, Yeah, they were very frustrated and it was hard to come to work every day knowing that, Like I said, I was one of the last ones in so I sort of knew all along that my stock options were not going to become anything or was it real long shot that my stock options for becomes

a thing. But like you said, yeah, you're right, these people, on paper, their wealth was they had a lot of wealth into this company, and then the company was falling apart around them. So were there any warning signs at the time, because it's easy for us, of course, to look back on it seventeen years in the future and we can sit here and say, oh, well, obviously they paid way too much money for an electronic greeting card company, and obviously they were paying people too much, and there

was all this success. But at the time, was there any indication that the whole thing was going to come collapsing. I hate to say that, like, there were signs that was like obvious, this is this is about to burst. But when it did start to fall apart, it was a very slow motion at first and then all at once, and there were little signs that things were not going well.

And the thing for someone at my level, the most obvious one is those perks like I was talking about when I was first tired with all the bagels and the free soda and all that. So after a few months, suddenly they take away the lunches. There's no free lunches anymore.

And then a couple more weeks go by and now there's no more bagel, the bagels are only on Friday instead of every day of the week, and then yeah, and then all the the But the big one for me, when I was like, Okay, something is definitely going on here. Is like shortly before the first round of layoffs, they started charging five cents for the sodas in the vending machines, which used to be free. It's like really literally, nicol, Yeah,

that was the thing. Yeah, it was like you used to give us these for nothing, and now you want twenty five cents. The fact that was cents almost made it worse than if they just charged full price, because it's like, you know, this is all they're gonna get. This is the beginning of the end, and it's going to start to go down. And in terms of like morale, I mean, obviously I imagined the worst thing that happened

is people losing their millions. But all these little things, what how does this sort of just general vibe of working it does it feel less fun every day? Like? So there were little things like that. And then after I've been there about a year, so somewhere around the beginning of two thousand one, there was our our first round of layoffs, which was not a huge number in retrospect, but it was It wasn't like a big wake up call to everyone in the company that like, things are

not going well. Something is wrong and we're not sure if we're gonna be able to get out of this now. So they the content people, were the ones who were getting acts the most because in addition to the stock dropping, we began to see the online advertising market started a crater and that was a huge chunk of our revenue at that time. So as that got worse, and then they laid people off, and then the revenue got worse,

and then they laid more people off. So that whole year of two thousand one was like a steady drip drip drip of There was this first round of layoffs and then like we all knew that there was going to be another round, we just didn't know when. We didn't know where it was going to be. And another thing around the same time, for most of two thousand they were building a new building for us as it can do, headquarters right on the one on one, and

also one of those classic signs in the headquarter curse. Yeah, it's like there's a whole name and and it was open maybe you know. So once that opened, it was this big, gleaming building. It was very nice. There was a cafeteria and so at that time we had we were taking up space in four buildings. It wasn't even

still big enough to handle all the employees. But then suddenly two of the buildings were combined into one building, and then a few months later we're all combined, and the company just kept shrinking, both in size and you know, stature, and every little like I said, every little drip drip drip was not only signs that the things were going bad for the company, but it was just brutal to

morale and people. You know, that whole year of two thousand one, the whole summer, everyone just could sort of see that, like, you know, we need some kind of rescue here because this is not going well. And am I going to be the next person to get laid off? What am I going to do if I get laid off? Because the same thing was happening at every other company in the Bay Area all the same time. So if you got laid off, there was nowhere else for you

to go to find another job. Right, So I'm curious, this is sort of a weird question, but as the money dried up and morale took a hit, did you observe the people around you clinging more firmly to the idea of the company's mission, Like did people start saying, well, oh, it's not as fun as it used to be, but we're doing something really important here. We're creating the future

of the Internet. And the reason I ask is because, of course, when we talk about bubbles nowadays, a lot of people start thinking about bitcoin, and with bitcoin, the story is so strong there and there's this whole sort of belief system built up around it that people start

to seize upon whenever the ice goes down. There was probably some of that at the top of the executives who were really invested in making this company work, and you know, at my level, kind of the bottom wrong of the company, I think people were just trying to

trying to stay above water and survive. And we talked about this also that part of the thing with bitcoin is that people can see a future even if the bubble collapses, in the price collapses, people can still see a future where bitcoin exists or some other cryptocurrency exists. And I think a big thing with these companies in the and that first dot com boom was the mission is going to go on even if the company doesn't.

So it was more about like winners and losers is that somebody was going to do what we were doing. Somebody was going to take somebody. That turned out to be right, as you say, the model survived. Yeah, it wasn't that there was anything wrong with the idea of broadband internet or online content. It was just that this company was not making it work, and so if we failed, one of our competitors would pick up the slack and

keep going. But as time went on, it was like it became clear that we were going to be the loser in this fight and somebody else was gonna win. That There was a lot of that going on. I think all over the that dot com boom that whatever whatever your niche was, whatever business you were in, you had five competitors and you couldn't all survive. Somebody was gonna win. But there was no scenario which everything would

just fall apart and there would be no internet. But it was a question of who's going to be the winner and who is going to be the loser? On their grim note, how did it finally and were you laid off? Like what was the how did it finish for you? So there was my team which was about thirty people by the summer of two thousand one, it was down to three. And yeah, it was, so you were a survivor. I mean, it's already pretty impressive. We're

talking to someone who was like in the top. That was so that I hung on for as long as Yeah, it was the opposite of the last and first out. I was the last one in, which also meant I was made the least amount of money. So that's why I was able to to keep hanging on. But so the last few months it was like really grim. People were just disappearing every day, either quitting or getting laid off,

and you wouldn't even know. One day, I came in before I was laid off, and my computer had been stolen from my desk, and it turned out that the guy who sat across the aisle from me had been laid off, and when he got laid off, he just took my computer and walked out the front door and no one stopped him, and I called security and they did not care. So, um, yeah, it was so weird.

Was getting slower and slower. We moved to the desk, and then actually September eleven, two thousand one, happened, and then two weeks later the company fell for bankruptcy, and that was when I was laid off and they gave me two weeks. They gave me the option of just leaving, walking out the door with my severance, or I could stay two weeks and get a little bit more sunset my product, I guess, which didn't even really serve a purpose.

But a lot of people were offered a deal. I remember where initially when the bankruptcy was filed, it was pitched as well, this is the real, the classic we're gonna reorganize, We're gonna come out on the other side, and we're gonna have a stable company again, and we'll get some new funding from me. You know. A T and T was a big investor in US and were

trying to negotiate something where they could save us. And so a lot of people were sold on the idea that like, you can walk out right now with like a couple of weeks severance package, or if you stay and we get through this, then you're gonna be rewarded on the other side. So a lot of people took that deal, and then a few months went by and

then at the end of December that was it. They liquidated and it was like we're done as a company, and those people ended up with nothing and again, and I heard stories of the last days of when it was clear that like, not only are we not going to make it like it's shutting down, we're selling all our assets. That people were just taking server rax out of the and just like dumping them in their trunk

and driving away. Yeah, it was just it was just picking the place apart, people taking furniture and computers again and everything, and and so you know, in September there was this pitch that like, oh, the company will survive and keep going, and then two months later it was just it was over. And then even though I was laid off, I still lived there for a couple more months.

And the thing that struck me as this is over, is so when I first moved to the Bay Area, I lived in Redwood City, which is where the office for Excited Home was, And it's about five miles from San Francisco. It's not that far, but if you tried to drive there during rush hour in two thousand, it would take at least an hour, sometimes two or three hours with the traffic because they're just everywhere, just people everywhere,

everything is bustling. And then by the time I ended up leaving California, it would take fifteen minutes because there was never anyone, Like, no matter what time of day,

there was never anyone in the highway. And you would drive down the highway and you'd see all these buildings for all these dot com companies, and they were empty, and all the restaurants were empty because so many people who came there to make their fortune and then their company collaps and as soon as their company collapse, they

didn't stay. They went back to wherever the king. That is a great, perfect anecdotal way to sum up the end of the bubble, Dash Bennett, that was fascinating conversation. I love this perspective on the bubble. Thank you very much for joining. Thank you, Tracy. I love that perspective on the And that's kind of I guess that's kind of obvious. I know from many conversations with you, Joe,

that you love talking about the dot com bubble. I mean, you know, like I didn't live it like Dash did to an extent, but I remember it pretty vividly, and you know we've talked about it before, but that whole angle, that detail about people at the end, essentially looting the office, stealing servers from the server room. I love that so much. Yeah, and the idea that maybe there were some warning signs when the free lunches ended. That's the sort of classic

economics tenant, isn't it. No free lunches literally free, but no, it is easy and to you know, And I think the whole thing with the slides, It's like, it's easy to look at the excesses of the past and to assume that it must have been obvious at the time that everyone knew that they were ridiculous. But I think that, you know, And it goes to this theme that we keep hitting on the power of the story, right is in a bubble. It's so compelling that you're just not sure.

It's like, yeah, maybe the slides are ridiculous, but maybe this is what the office of the future is going to be like. And it's really hard to know in that moment which way it's going to go. Right. And sometimes the story is actually correct because, as Dash pointed out, this business model did become the dominant model. It was just that this particular company, excited at home wasn't the

one dominating it. Right. So this gets back to the idea that he was talking about the winners and losers during a bubble, like not everything is going to necessarily disappear, but a huge chunk of it might, even if the story turns out to be exactly right on. And of course, the excited home model not that different from the well time Warner model, which is not that different from the

sort of Comcast model of today. So even if the founder's vision is sort of perfect, you know, and it's easy to forget Amazon in late two thousand, early two thousand one, I think they're a lot of people who wondered whether Amazon would hang on. So even if your your vision is perfect, it could still all go bust, right, So further proof, I think that bubbles and markets remain the most interesting phenomenon that we can observe in the space.

Let's do more bubble episodes of this year, another bubble series, definitely alright, Alright on that note, this has been another episode of the Odd Lots podcast. I'm Joe Wasn't and I'm Tracy Alloway. You can follow me on Twitter at Tracy Alloway. You can follow me on Twitter at the Stalwart, and you can follow Dash on Twitter at Dashbot and a shout out to our producer, to for Foreheads, and the head of podcast at Bloomberg, Francesca leaving thanks for listening.