Everything new is old again. Remember when that joint venture between Al Gore, DARPA, and the porn industry built the Internets? All those Ted Stevens Memorial Tubes, Chutes, and Trucks made it look all shiny and new. It was a new frontier where everything would be free and unsullied by the clutches of the corporatists. But as corporatists often do, they got into it anyway.
They threw truckloads of simoleons at anything with a phone modem and an e at the beginning of its name and found that making money from something free isn’t quite as easy as it might first appear. The steam from their ears became trapped within their ostentatiously drab Silicon Valley low-rises and formed a bubble. It was a bubble the likes of which no one had ever seen before. An eBubble.
At first, they were all so proud of their little bubble. It was brilliant and bright and mostly paid for with someone else’s money – as money-making schemes generally are. Nerds became the new kings, and venture capitalists their new Chancellors of the Exchequers. No one believed that something so beautiful wouldn’t just go on forever. They hired Kate Winslet and celebrated with her on the bow of a CGI Titanic shouting, “OUR SHIT DON’T STINK! SUCK IT WORLD!”
The Forever Bubble Bursts
People were out of work. There were hundreds of Silicon Valley low-rises sitting forlorn and empty along with the McMansions that used to belong to the paper-rich who suddenly found, to their great dismay, that paper really isn’t worth much after all – and come to think of it, neither are bubbles. The economy went down some tubes of a non-Internet variety.
The irrational exhiberenteers who inflated the bubble now stood around saying, “You know, I did…not…see…that…coming! Who knew?” Then, they all granted themselves bonuses for not seeing the fall coming. Then another rewarding themselves for doing nothing when it happened. Then another to say it was someone else’s fault. And finally, another to retain their valuable experience so they wouldn’t jump ship for another place that had sunken in the very same way.
But all was not lost. An ill-mannered, hoodie-wearing Jewish boy from Harvard had an idea for something new. His name was Mark. He built the ultimate killer app. He called it “Inyourfacebook”, then shortened it to something less jarring on the advice of a friend who actually had a soul and a social life – “Facebook”.
Facebook brought total strangers together so they could trade pictures of cats in funny hats, tell people when they went to Safeway, or invite all their friends on the west coast to their daughter’s violin recital in the east coast. People liked it very much judging from the number of times they pushed the buttons labeled “Like”.
Mark realized it must make money though. Mom and Dad were not going to be happy when he broke the news about dropping out of Harvard. He was working without a safety net and the ability of moving back in with Mom and Dad if the cockamamie thing went south was very safe indeed.
First he sold ads, like those eDinosaurs over at Yahoosaurus, but they didn’t make enough. So, he struck on the idea of stealing the identities of every person who used his invention, but found he could only sell them back to companies to target the ads they weren’t buying. And then he thought of the perfect money maker, the killer device on which to play his killer app. He’d con someone with lots of money into handing it over to him just as he’d convinced those millions to gift him their identities.
Go to Wall St. Because That’s Where Stupid People Have Money
As bank robber Willie Sutton once said, you rob banks because that’s where the money is. However, Mark needed both money and gullible people so he went where they were – “Well hello, Wall Street!”
Here were people who had gobs of money they conned from many others. They were gullible too. They were the same people who believed in the bubble before. Surely a new one would be indestructible!
Fool me once, shame on you. Fool me twice and you are a Wall St. banker. The boy even fancied himself a bit of a Robbin Hood, stealing from the rich and giving it to the richer – that would be him.
He convinced a bunch of them to create something called an IPO. IPOs give you something of absolutely no tangible value in exchange for lots of money. The idea is that the person who gets the money will someday use it to make something tangible that is worth more money so everyone can die with more toys and live happily ever after, especially the Chinese who make most of the world’s toys and own most of America’s debt.
So the IPO was much anticipated. People talked and rumored and speculated. They hoped against common sense that it would be much like the forever bubble of years before. Only this time, everyone was convinced it wouldn’t burst…at least until the closing bell on the first day of trading. Make that the second day of training. No, make it the third and so on and so on until the only people living happily ever after were the very expensive lawyers everyone was hiring to sue everyone else and keep the under-regulating regulators away.
It’s a sad tale, but there are lessons here:
- Bubbles burst, even if you fart them out in gold. It is the defining characteristic of bubbles.
- Never tell the rest of the world to suck it because one day you’ll fall back down here with 99% of the rest of us and you’ll be fresh meat on the suckage line.
- Remember, conning a con man is much easier than it appears. So easy, in fact, you may con yourself while trying to con them.
- The are no killer apps, only stupid billionaires.
And there you have the proof my friends.
Everything new is old again.
- Facebook’s IPO and the new tech bubble | Michael Wolff (guardian.co.uk)
- facebook-cookbook and a Recipe for Disaster (bakulaji.typepad.com)
- Overheard on CNN.com: ‘I saw this one coming a mile away,’ reader says of Facebook (news.blogs.cnn.com)
- ‘The Golden Age of Silicon Valley Is Over, and We’re Dancing on its Grave’ – Derek Thompson – Business – The Atlantic (mbcalyn.com)
- Facebook IPO madness shows we are in a tech bubble (theweek.co.uk)
- Can you handle “the bubble?” (om.co)
- The Facebook IPO and the ‘Malincentivization’ of the Technology Sector (mikethemadbiologist.com)
- Facebook: Seriously, How Did This Become Such A Mess? (pandodaily.com)