Jun 22, 2011
Today, venture capitalist Marc Andreessen, best known as founder of the Netscape Web browser in the 1990s, made a statement regarding prolific rumors about a new dot-com bubble.
“”I don’t see a bubble,” Andreessen said. ”I think people are confusing success with a bubble. Maybe stuff is just working.”
Maybe stuff is just working, indeed.
In 1999, venture capitalists basked in the glow of record-setting growth as many new dot-com companies went IPO for the first time. These companies saw unheralded rises in their stock prices, driving them to move faster, with less caution, and to launch more competitive start-ups. The market would be left to decide which ones came out on top. Start-up capital flowed freely in 1998 and 1999, partially due to low interest rates during those two years, and partly owing to the bravery and enthusiasm of investors. The dot-com “bubble” (as this period of easy capital and growth came to be known) burst on March 10, 2000, when the stock markets bottomed out in the wake of 6 interest rate hikes in one year, and a looming sense of dread of the impending disaster people believed was coming because of the Y2k bug.
In 2001 when the bubble burst was complete, dot-com start-ups that had been successful went out of business after using up venture capital and failing to earn profits. Other companies of that era not only survived, but flourished well into the first decade of the 21st century. Some of the more successful companies, like Amazon.com, went into the unconventional business of electronic retail, setting an example for brick and mortar retail giants to venture out and expand their horizons in e-commerce.
Andreessen, who has investments far and wide across the Internet and Direct TV, thinks it’s only logical that more money should be flowing into a promising sector of the U.S. economy at this time. He doesn’t believe that a bubble is about to burst, but rather, that the one sector that does not appear to be in as much trouble as the others currently are, such as housing, manufacturing, and agriculture, should be eagerly embraced by investors now while the profits are running high. To live in fear of a repeat of the 1999 dot-come burst is to miss the opportunities of today.
