Lessons from the Dotcom Bubble

The dotcom bubble spectacularly burst a few years ago, attracting BILLIONS of dollars in venture capital funding for start-up businesses with little more than enormous but unproven ideas to start and build their business on the Internet.

At the same time, BILLIONS OF DOLLARS were spent on hiring a sizable workforce.

 renting sizable buildings, and leasing pricey office and computer equipment in numerous places across the world. Additional hundreds of millions of dollars were spent on intensive media advertising to encourage people to visit their websites.

There was never a day when you weren't inundated with commercials begging with you to utilise "this dot com firm" or "that dot com company's" products or services. result macau If you were fortunate enough to be present during the frenzy, you will remember it very clearly. Everywhere I looked, there were dot com commercials. Some of them had incredibly appealing designs and catchy taglines.

The bulk of those enterprises, sadly, mainly relied on the hype around the Internet, unproven big ideas, and the "First Mover Advantage," with the company's listing on the stock exchange serving as the ultimate reward for its founders and backers.

Due to the emergence of millionaires as a result of Internet enterprises going public.

 Billions more of dollars were invested in new Internet projects, enthusing venture capitalists and entrepreneurs. Because it would appear that the road to millionaire status was just a few months away at that moment, rather than the years it would take via the conventional approach.

Venture capitalists were looking for opportunities to invest in a capable management group and a sizable concept involving the Internet. Because the Internet was still relatively new at the time, nobody could anticipate if such significant ideas would be successful. The objective was to list the dot com businesses as soon as possible, at all costs, in order to profit from the venture rather than to determine whether they would. Naturally, it was only a matter of time before all involved understood the full gravity of the situation, with incredibly dreadful consequences.

It's true that this mishap has a lesson that will be recorded in marketing history books.

Any enthusiasm generated for a sound business plan that wasn't going to be successful over the long run wasn't going to last. That is to say, no amount of marketing bluster or the use of the "First Mover Advantage" will be able to alter the fact that a business cannot produce enough income to meet its operational costs.

According to the First Mover Advantage theory, you will have a significant competitive advantage over all of your competitors if you are the first to be seen offering your product or service everywhere on the Internet (even though you may not be the first to do so, only the first to be SEEN to do so). This is in contrast to all of your competitors who arrived later or who arrived earlier but only actively promoted themselves after you arrived.