It is easy to look at today’s crop of sinking IPOs—like Uber, Lyft, and Peloton—or scuttled public offerings, like WeWork, and see an eerie resemblance to the dot-com bubble that popped in 2000.
Both then and now, consumer-tech companies spent lavishly on advertising and struggled to find a path to profit.
Both then and now, companies that bragged about their ability to change the world admitted suddenly that they were running out of money.
Both then and now, the valuations of once-heralded tech enterprises were halved in a matter of weeks.
Both then and now, there was a widespread sense of euphoria curdling into soberness, washed down with the realization that thousands of workers in once-promising firms were poised to lose their jobs.
But if you look closer, today’s correction isn’t much like the dot-com bubble at all. In fact, it might be more accurate to say that what’s happening today is the very opposite of the dot-com bubble.
Let’s first understand what exactly that bubble was: a mania of stock speculation, in which ordinary investors—from taxi drivers to Laundromat owners to shoe-shiners—bid up the price of internet-related companies for no good reason other than “because, ..
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