Broc:
I want to talk about the dot com bubble. My knowledge is limited on this. All I know is the dot com bubble basically started because there was so much hype around this internet thing. And so people started investing and giving money to these startups that didn’t really have a sound business structure, business plan. But there was just so much hype around this unprecedented realm. that they just kept pumping this full of money and then they realized, this actually doesn’t make us any profit. And so just, people went bankrupt and.
Zach:
Are you familiar with Mark Cuban?
Broc:
Right.
Zach:
So, you’ve seen it like you’ve seen him on Shark Tank and stuff. He’s one of these guys who’s famous essentially because he gives away money to other people so they can spend it. Part of how he made his fortune is he sold a freaking domain name broadcast dot com back in the early aughts or whenever. This all kinda goes into the dot com bubble. It’s like this asset that everybody thought was super extremely valuable but had no actual tangiblenness behind it. It all just fell apart because everybody kinda realized overnight that like what everybody thought was valuable were these domain names. This is where the future’s at. They’re like, crap, there’s actually nothing backing this up. It’s not actually worth anything. And there’s things like there’s the whole pets dot com saga, which is like a whole thing of people just inflating the values of nothing other than just like the actual domain name behind it. And this is back when people were snapping them up left and right, thinking that they were as valuable as real estate, basically. If you artificially inflate the value of I think anything, you’re gonna form a bubble and it’s gonna pop eventually. That happened in the early two thousands with the dot com with the internet. I feel like you if you kind of just look at the writing on the wall when you see all of these AI platforms coming out, because I feel like if you rewind a year or two, what was the one everybody was using? There was Chat GPT.
Broc:
Yeah, that was the first one I heard of.
Zach:
Was there any others that were like super common? I mean, there’s a bunch now, and I feel like I move from one to the other every few months just because I find that the one I was using wasn’t performing well and somebody’s made a better one. And now there’s a bunch of them. It’s starting to get saturated, but the bigger thing is. Is there money behind this? Are they actually generating revenue? Or are they actually just kind of taking investments, showing that as profit, and then kind of spinning these investments into other things? But if they actually brought in money and that’s the question, I think that’s the question everybody’s afraid to answer.
Broc:
Okay, so the dot-com bubble it was specifically people were buying up domains like as real estate digital real estate?
Joseph:
Well, so it wasn’t just it was domains were a big part of it, but like with that broadcast dot com thing, guess how much he got? So it did actually function as a business, but guess how much Yahoo bought it for?
Zach:
I’m ninety percent sure it was Yahoo.
Joseph:
Yeah, so Yahoo bought it for like three billion. So essentially he came up with like the early version of YouTube. Kind of. So essentially it was kind of like a sports station, because he’s really into sports, online. And because like Zach was saying, like the internet was just hyping on everything, they’re like, my gosh, you can watch sports on the internet. And so that was basically it. And he had a team And everyone’s like, No, he’s great. He gave a ton of money to all of his employees. And he did, like he made a bunch of his employees millionaires and all that. But I have a hard time not thinking that when he sold, that he wasn’t just like Kaching, cash out, these guys are idiots for buying it for this much because there was nothing to back up that it was worth that.
Zach:
He had to have seen the bubble coming too. Otherwise I feel like he probably could have held out for more if he wanted to. Yeah.
Joseph:
And speaking of Yahoo, it’s like the one company that has no ability to see the bubble because they’ve had so many offers until they were just worth nothing. And they essentially just kept doubling down, like it’s gonna get bigger and bigger and bigger and bigger.
Zach:
They were a juggernaut. Like if you ever saw a T V commercial in like the late nineties or early two thousands, it was a Yahoo commercial. Mm-hmm. Like they were just everywhere and they were like the ones that Google was afraid of. And I think at some point they tried to buy Google or something like that in their history, but they they were like the massive juggernaut and now they’re more of like a kind of like remember Yahoo kind of a
Joseph:
Yeah. The older demographic uses them, but that’s pretty much it. But bonus points. D do you guys know what company so Elon made a bunch of money too, same thing. Do you guys know what he exited from? Made it? PayPal. Yep.
Zach:
was a PayPal that was originally called X dot com. Yeah. That’s it. He’s had the domain name since PayPal was it.
Joseph:
Was it really? I did not know that. I was wondering if he just paid out the nose for X or something like that.
Zach:
There’s three one character URLs out there. I think one of them was Q dot com. I can’t remember what the other one is, but X dot com was his and that’s what he used for PayPal until he departed. That’s awesome. And then he just sat on it for probably like two decades or something until he pulled it back out.
Joseph:
And I and I don’t remember, but I think it was somewhere around it was not what like Mark Cuban made. I think it was like 50 million ish, which is still a lot. But that’s arguably one of those where I don’t think they had the money at the time to prove that it was gonna make money. So I think it’s still kind of qualified as a they paid a lot of money for something that they didn’t they couldn’t back it up. But with getting into eBay and all that, it probably easily proved to be a good investment for whoever bought it. But I think it still qualified as like making because it was like college kids made it, made a ton of money. Yeah. So it still qualifies as a bubble. But yeah, I mean, I think that whole time was just weird because you had all the excitement. The Windows operating system had come out just before that. So then everybody was connecting using the Microsoft browser. You had AOL, you had Liteco.
Zach:
Computers in the home for the first time ’cause prior to that it was like you had computers at work. Rich guys had computers in their home office and every once in a while like a wealthy family would have a computer in the living room and then suddenly just like within a couple years ever like half the families in America had a computer in their living room. They had AOL internet and everybody was going on the internet for every reason and it just got super big super fast.
Joseph:
Yeah. And it was all information based. Like the idea- there was zero online shopping. The idea of like giving money online was you would have been called a fool. It was like that’s stupid.
Zach:
Yeah, you do not put your credit card on the internet. That was like a huge no no back in the day.
Broc:
Did you notice anything happen to the economy? What was the economy like? Did it affect the overall?
Joseph:
I remember that Radio Shack was huge at the time. And they carried a lot of PCs. And I remember that like one of my friends’ dads was a manager there. And I think he got laid off. Like I think Radio Shack, that was when they tanked and never came back.
Zach:
It might have been when we lost our circuit city here, I think.
Joseph:
So it really affected the brick and mortar stores that were selling computers. I don’t know why, to be honest, because home still needed them. Was that because Mac kind of took over the market? No.
Zach:
Mac really didn’t start coming around real big and that till I feel like the late two thousands. Like that’s when like a lot of things like Adobe creative suite got kind of good at that point. People started to need like more artistic based computers. It was more of a I think just everybody who had a computer had one by then. and people weren’t jumping to upgrade them. They didn’t like that was back then where you can buy a computer and it was relevant for a good five or six years. It wasn’t immediately out of date within a year or two.
Joseph:
The why it happened is essentially all the money was coming from massive investment firms like it does now. And they’re just pouring money into all these dot coms. And then essentially they all realize this is just hype. So they all start polling at the same time and it can’t be held up. So you have all these companies that they’ve paid three billion dollars for that they realize are worth nothing. And so all the people are selling the stock and it just starts cascading, just toppling everything.
Zach:
It’s like somebody like it’s gotta it’s gotta end with somebody. It’s like somebody finally gets it and they’re like, I can’t flip this back over and make a bigger profit because it’s starting to show its true colors. People are starting to see, there’s not actually real wealth behind this. It’s just like people keep making money until it’s unfortunate enough to land on somebody who’s not gonna make money, and then from there it just dominoes down.
Broc:
Like a Game of Hot Potato.
Joseph:
And we make the same mistakes. Everybody’s been talking about NVIDIA stock four thousand percent and all that. And it’s like first sign, if you see people talking about numbers like that where they’re like, you gotta buy now, it’s a terrible, yeah, terrible idea.
Broc:
We’ll talk about NVIDIA.
