My column this week is about how the legal system is often used as a weapon. If you’re curious about the stuff I saw in the dot-com era that I alluded to in the article, then I have a bit more about that right after the colon at the end of this sentence:
It’s true that I was a paper millionaire back in 1999-2001 or so. It’s not as big a deal as it sounds. There were a lot of us at the time. Mostly tech types who knew lots about HTML, Java, C++, SQL, and very little about business.
For you young folks: How it worked was that every investor out there knew the internet was the Next Big Thing. They pictured how profitable it would have been to invest in automobiles just before the Model T started rolling out. Or how great it would have been to buy a slice of IBM in 1950. Or Microsoft in the early 80’s. And they were basically right. The internet WAS the next big thing. But so many people had come to that same conclusion at the same time that there was a lot more money than opportunity. The net wasn’t quite ready for what people wanted to do and (more importantly) the public wasn’t ready to start shopping online. Traditional companies weren’t ready to advertise online. It was just too soon. The market didn’t exist yet.
The reaction to the glut of investment money was that a lot of shady companies cropped up. Some were run by white collar con-men. Some were run by idiots who believed the hype. Some were run by genuinely smart and honest people who just happened to try to go into business when all of this was going on.
“Hey, it’s too late to get in on Cisco (the next AT&T!) but you can invest in our company, www.buy-unrefrigerated-milk-online.com! Our business plan is right in the domain name!”
These companies would then entice techs like me to the table, “Hey, we can’t afford to pay you the kind of bucks you’d make at a big established firm, but we’ll pay you $insult a year and give you this big pile of stocks. We estimate that the stock will be worth an $OMGillion dollars once our company launches in a couple of months, which will more than make up for the low pay now.”
“Wow. Sounds good. I can just sell a bit of the stock to make up the diff-“
“Uh no. You can’t just take an investor’s money and then dump your own stock. There are SEC regulations controlling how all of this works. You’ll have to wait a couple of years before you can sell.”
Then the crash came and those stocks that were supposed to be worth $50 a share were worth $0.05 a share if they were worth anything at all. Then everyone turned on each other. The investors felt like the company sold them a pack of lies. The people that got hired were angry that they worked at a $60,000 job while carrying $80,000 in student debt and living in a city with a sky high cost of living, and suddenly learned that they weren’t going to be rich overnight. Then came the lawsuits. And the pink slips. At the time I remember reading a blog that posted every time a dot-com company went under, imploded, or got sued out of existence. It recorded how long the company had been running and how many people lost their jobs. That blog updated multiple times a day.
I actually had it really easy. I kept my job, I didn’t make any enemies, I was never personally dragged into court, and I managed to make just enough getting out to pay off most of the debt I racked up while I was in. A lot of people did a lot worse. I saw people lose their shirts, marriages wrecked, and friends taking each other to court. It was a sad time.
I wasn’t really all that upset about not being a millionaire anymore. I knew I hadn’t earned a million bucks. I hadn’t done any work that was worth that kind of money, and so it never really felt all that real. If it had worked out I wouldn’t be rich because I was smart or clever or hard working. It would have just been dumb luck, like finding a suitcase full of money.
Internet business is a lot healthier now. There are still pipe dreams and ill-advised knockoff companies, but that’s probably true in any business. We’ve got the bandwidth to actually do some of the stuff they were dreaming about in 1999, people are willing to shop online, investors are a lot more savvy, and the technologies (stuff like operating systems and web browsers) have stabilized quite a bit.
Shamus Young is a programmer, an author, and nearly a composer. He works on this site full time. If you'd like to support him, you can do so via Patreon or PayPal.
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