The Dot-Com Bubble Is Reconsidered -- And Maybe Relived
The traditional history of the dot-com bubble has been told many times: Too many companies rushed into the market in defiance of all known business fundamentals, and when the crash came, all but a tiny fraction of them just as quickly imploded and went away.
That received wisdom, though, is now getting a going-over by economists, business historians and others, some of whom are coming to new conclusions about what precisely went wrong during the bubble years, normally dated from the Netscape IPO in August 1995 to March 2000, when Nasdaq peaked at above 5100.
A recent paper suggests that rather than having too many entrants, the period of the Web bubble may have had too few; at least, too few of the right kind. And while most people recall the colossal flops of the period (Webvan, pets.com, etoys and the rest) the survival rates of the era's companies turns out to be on a par, if not slightly higher, than those in several other major industries in their formative years.
The paper is being published in a coming issue of the Journal of Financial Economics. As noteworthy as the findings are, even more interesting is the process that led to them. The work is an outgrowth of the Business Plan Archive at the University of Maryland. Its goal is to become a kind of Smithsonian Institution of the Internet bubble, saving for posterity every business plan, PowerPoint presentation and venture-capital term sheet -- the more frothy and half-baked, the better -- that it can get its hands on.
David A. Kirsch, a professor of management at the university's business school and one of the authors of the study, said it relied on a thorough examination of one particular treasure trove at the archive: every business plan, roughly 1,100 in all, submitted during the period to an East Coast venture firm.
The VC office later closed and donated the papers to the archive on the condition it remain anonymous. Prof. Kirsch said that while the office would be considered second tier when compared with the famous names in Silicon Valley's Sand Hill Road, the 1,100 firms he studied were representative of all of the companies started during the period.
Looking through those business plans, and contemporary press accounts, the study identifies a defining business strategy of the bubble era: Get Big Fast. A business was supposed to grow as quickly as possible because the first successful entrant in a category could keep out challengers. If a company was able to successfully get big, it could use that position to later finesse other questions, such as how it might one day actually make money.
Belief in this "first mover advantage" is today tempered by a new awareness of the risks of being the first out of the chute. Back then, though, VCs used Get Big Fast as their basic investing strategy, despite the absence of any evidence that it worked. By the spring of 2000, however, the world was beginning to wake up to the fact that it didn't work. The crash followed soon thereafter.
The study suggests, though, that the dimensions of that crash might be misunderstood. Nearly half of the companies they studied were still in business in 2004. Prof. Kirsch says that most people believe just a few percent made it through.
The study found that the attrition rate for dot-com companies was roughly 20% a year, which is no different from what occurred during many other industries, such as automobiles, during their early boom periods.
Most of these survivors, though, aren't the titans like Amazon or eBay, but much smaller efforts such as wrestlinggear.com, which sells equipment to high-school and college wrestlers, what Prof. Kirsch called precisely the sort of demanding niche market for which Web shopping was invented.
The fact that so many dot-com companies survived suggests that even more could have started. But that didn't happen, says the study. Investors following conventional wisdom of the day were interested only in companies that could dominate an entire industry. In looking for these, they ignored smaller niche opportunities that had the potential to become modest but profitable enterprises.
"It turns out there were lots of nooks and crannies for entrepreneurial action," says Prof. Kirsch. "But those nooks and crannies might have been $5 million or $10 million businesses -- well worth doing, though not necessarily for VCs."
The paper's other authors were Brent Goldfarb, a University of Maryland economist, and David A. Miller, of UC San Diego.
While they didn't deal with the current Internet bubble involving "Web 2.0" companies, it's clear that a variation on Get Big Fast is alive and well today, just a few years later.
Companies like Interactive, eBay and Google are spending hundred of millions, often billions, on start-ups such as MySpace, Skype and YouTube, which have developed a commanding market presence but without actually making money. Some of the explanations for these purchases have a certain logic; others seem like dot-com déjà vu.
It will take awhile to know whether things will turn out differently this time. But bubbles always have happy endings, don't they?
反思互联网泡沫
互联网泡沫的故事人们已经不知道听了多少遍了：数不胜数的公司无视一目了然的业务基本面而匆匆跻身这个市场；当泡沫破裂时，除了极少数公司之外，大多数公司都很快解体、从市场上消失了。
不过，经济学家、商业史学家和其他一些人现在正在反思这种公认的看法，其中一些人对泡沫时期（通常指1995年8月网景公司(Netscape)首次公开募股到2000年3月那斯达克指数升至5100点）究竟发生了什么问题得出了新的结论。
最近的一份研究报告显示，网络泡沫时期的新加入者不是太多了，而是太少了；至少是业务类型合适的公司太少了。尽管大多数人对当时一些庞然大物（Webvan、pets.com、etoys，等等）的倒塌仍记忆犹新，但同其它几个主要行业初步成形时期的情况相比，互联网初创公司的存活率不相上下，甚至还略高一些。
这篇报告将在最新一期《金融学杂志》(Journal of Financial Economics)上刊登。与上述结论同样引人关注的是其产生的过程。这项工作是马里兰大学(University of Maryland)商业计划档案学会(Business Plan Archive)的成果。该学会的目标是成为记录互联网泡沫的类似“史密森学会”(Smithsonian Institute)那样的机构，拯救所能获得的每一份商业计划书、PowerPoint演示文档和风险投资条款──越是那些半途而废、最终成为泡影的越好。
马里兰大学商学院管理学教授、这份报告的作者之一大卫?克茨(David A. Kirsch)说，报告依赖对档案中特别有价值的商业计划书的研究。这批计划书共有1,100份左右，都是在网络泡沫时期提交给美国东海岸的一家风险投资机构的。
这家风险投资机构后来关闭了，它将所有报告捐给了档案学会，条件是不能披露公司名称。克茨教授说，尽管这家公司同硅谷的知名风险投资企业相比应该属于二流，但他们研究的1,100家公司也能代表在网络泡沫时期成立的所有企业。
通过研究这些商业计划书和当时的资料，研究人员判断出泡沫时期的商业策略：尽快做大做强。企业都希望尽可能快地成长壮大，因为某一领域的第一个成功者能将挑战者拒之门外。如果一家公司能够成功做大，它就能利用这种有利形势解决其它问题，如怎样最终实现盈利等等。
这种对“先发优势”的崇尚如今已让位于“出头的椽子先烂”的心理。但在当时，尽快做大做强却是基本的投资策略，尽管并没有多少证据显示这种做法的威力。不过，到2000年春季，整个世界都开始认识到这种做法并不灵验。不久，互联网泡沫就破裂了。
然而，研究显示，对网络泡沫破裂的范围可能存在误解。在他们所研究的公司中，近一半到2004年仍在运营。克茨说，大多数人都认为仅有百分之几的初创企业幸免于难。
研究发现，网络公司的倒闭比率每年约为20%，同汽车等行业在早期繁荣阶段相差无几。
不过，大多数幸存者并不是亚马逊公司(Amazon.com)或eBay这样的巨头，而是更小的公司，如向大、中学校摔跤爱好者出售用具的wrestlinggear.com。
如此多的互联网公司得以幸存的事实表明，本来还可以有更多的初创公司诞生。但这项研究称，并没有出现这种情况。因循惯例的投资者只对能够主导整个行业的公司感兴趣。他们在寻找这类公司的过程中忽视了市场规模可能不大但却能成为赢利企业的机会。
克茨说，在创业过程中有许多冷门，但这些冷门却可能带来500万甚至1,000万美元的业务，非常值得一试，尽管可能不符合风险投资企业的胃口。
这份研究报告的作者还有马里兰大学经济学家布伦特?古德法勃(Brent Goldfarb)和加州大学圣地牙哥分校的大卫?米勒(David A. Miller)。
尽管他们没有研究包括“Web 2.0”在内的新一轮互联网泡沫现象，但显然，仅仅事隔几年，类似尽快做大做强的思维依然很盛行。
Interactive、eBay和谷歌(Google)这样的公司用数亿甚至数十亿美元收购MySpace、Skype和YouTube等初创公司，这类初创企业尽管有出色的市场表现，但还没有赢利。对这些收购行为的解释有些是符合逻辑的，还有些则仍有泡沫时期的印记。
要判断这次事情是否会有所不同恐怕还需要一段时间。但泡沫总有其应有的结局，不是吗？
Lee Gomes
