The anti-bubble of 2001-2004
Us old timers remember 2001-2004 when anything related to the internet was ridiculed as a ponzi scheme. The conventional wisdom was no internet company would ever make money and all the ideas of the dot-com boom were stupid. Turns out 2001-2004 was one of the best times to invest in internet companies.
An artifact of that era is a board game called Burn Rate:
fittingly, this game came out at the trough of the web downturn, 2002:
central to the game are "bad ideas" that players try to get rid of.
one bad idea is name your price auctions:
Today the leading name your price auction is Priceline, which has a $20B market cap and made $750M in profit in 2009.
The next bad idea is an online computer store "eggbrain computers."
The leading online computer store is NewEgg, which is profitable and had $2B in sales in 2009.
Internet money sounds a lot like Paypal, which was sold to eBay for $1.5B and has since been eBay's fastest growing profit center.
The leading online ad server was DoubleClick, bought by Google in 2007 for $3.1B.
Lesson: When the mocking gets the loudest, double down on your investments.
