What was everyone thinking? Did everyone stop thinking altogether? Why on earth were all those dot-com dudes able to get money for brain-dead ideas that would never work anywhere? And why did the US patent office allow them to register their half-baked schemes?
The answer, unfortunately, has to be that everybody wants to get rich without doing anything to earn the riches. Winning the lottery is a tough call. Starting up your very own dot-com was much easier while the markets were awash with other people's cash. No doubt some of these earnest individuals had a really good idea that might have become a business one day. No doubt some who had no chance of making it, actually believed in their projects. I'm prepared to wager that a significant number of them had no intention of ever doing anything ex-cept winning their own made-to-order lottery.
The concept of having a good idea and turning it into a business is hardly new. What was new this time around is that large amounts of cash were instantly available to let you try out your new idea.
Historically, you had to try out your idea very slowly using whatever funds you could get your hands on, usually working another job to pay the bills. Suddenly, this phase was eliminated by the VC-brigade throwing their money around.
Were the venture capitalists all hoodwinked along with the public? You wouldn't think so. After all, these are people who get to look at an awful lot of business plans. And you'd have to think that you only get to be a VC after you've made truckloads of money somewhere else - so you ought to be able to run a business as well as recognise the possibilities in a new business. So, did the VCs totally abrogate their responsibilities in order to join the grab for IPO super-riches? I'm sure a lot did just that.
There's no escaping that a lot of people with not much to offer ended up with unbelievable wealth. Now that it has all come crashing down, most of those involved didn't end up flat broke. No way. They all bought themselves property that can be sold off for cash if required. The mug punters on the stock market (yeah, that's you and me) are the ones who ended up with nothing but worthless scrip. The whole experience looks like an elaborate con job designed to transfer countless small nest-eggs into the hands of the fortunate few, who were also the ones advising us all how much money we were going to make. Except that most of us never did, and now probably never will.
The lunatics don't get to take over the asylum very often. We probably won't see them running things again during our lifetime. But I suppose we needed some phenomenon to prove to the newbies that the stock market doesn't keep going up forever. Damn painful way to learn that lesson. The analysts and media gurus aren't allowed to play stock trader while they're handing out advice, so not many of them would have made, or lost, a fortune.
However, as far as I know, none of them were sacked for the crap advice and glowing reports they generated on behalf of the dot-con brigade.
Each time another dot-con hits the wall amidst lay-offs and exploding debts, it makes good headlines for the media, but the harsh reality is that another bunch of innocent bystanders is now out of work and in danger of losing more than just their jobs. If they can't find a new job, the credit companies and the banks will soon be chasing them out of their homes. And as more people are shown the door, it makes it that much harder to grab the jobs that are left. Real people are really suffering.
The market 'correction' was supposed to allow the companies that had a valid business model, and a team in place to run that model, to float to the surface while the rest sank into oblivion. So far I can't see much evidence of any company floating above the dross, except those companies that were already going gang-busters before the so-called new economy erupted. Every one of the new economy darlings now has a share price a fraction of its highest mark. Their falls from grace have given a sharp wake-up call to the rest of the tech-sector who were already making profits - when the market stampede turns, it doesn't stop to step gently over the good guys. Everybody is trampled in the rush.
Will you all now promise not to get hoodwinked again in this lifetime?