TweetFollow Us on Twitter

Aug 00 Viewpoint

Volume Number: 16 (2000)
Issue Number: 8
Column Tag: Viewpoint

Viewpoint

by Jordan Dea-Mattson

Of Tulips and Dot.COMs

A Mania for Tulips

In his book Extraordinary Popular Delusions & the Madness of Crowds, Charles MacKay recounts the history of the Danish Tulip Mania of the 17th Century. It is a fascinating story that has definite lessons for us today.

Tulips were originally introduced to Europe from Turkey in the mid-1500s. Their beauty made them popular among the well to do and having various varieties in your garden soon became a status symbol, if not a requirement for being considered a cultured individual. Soon, connoisseurs, desiring to one-up one another, would focus on getting the right variety of bulbs, so that their gardens would be "just right".

As you might suspect, as the popularity of tulips grew, the demand for tulip bulbs drove their prices higher and higher. Ordinary people seeing the price for individual bulbs double and then double again soon started buying them - not to have them in their gardens - but as investments.

Holland was hit particularly hard by the mania for tulips. An entire industry of tulip exchanges and brokers sprung up, and soon ordinary folks were emptying their bank accounts and mortgaging their homes to get in on this sure-fire way to riches.

A "crash" - or to use the new and improved, politically correct phrase, a "correction" - finally came, and when it did it was bloody. People lost their homes. Families were bankrupt. People's "sure thing" investments in tulip bulbs returned to being what they were originally: the source of beautiful flowers.

Today's Tulips

For the last several years - up through March of this year - anything that smelled of "dot.com", "Internet", "digital convergence", or "new economy" was the "sure thing" that would bring you untold riches. For a while - as in the Danish Tulip Mania - it seemed to hold true. You could invest in almost any "half-baked" idea - and lets be honest here, they were ideas not companies - and you would double your money in a couple of months.

But when you dug into these ideas you found that many of them weren't and wouldn't ever be ready for baking. People were launching magazines on the Internet - a very tough business, just ask our publisher - like Salon.com, and commanding valuations that you would never find placed on an established magazine with a stable subscriber base and lots of faithful advertisers. It was absurd.

Even that darling of the Internet's new economy, Amazon.com - which when you dig into it is only a very slick and efficient retailer - was and still is, even at around $30 a share, absurdly overvalued.

And like in the Danish Tulip Mania, a whole industry has grown up around the trading of our latest mania. There are web sites - many of which, in the greatest of ironies, have gone public as part of our Internet Mania - chat rooms, magazines, and mutual funds, all of which are focused on driving the Mania forward.

And, like the Danish Tulip Mania, our Internet Mania seems to be unwinding itself to an extent. As I write this column, the NASDAQ has finished a week long decline. A decline that has former Internet darlings like Amazon.com and e-toys further in the red than ever before. The mania part of the Internet seems to be - unlike the Danish Tulip Mania - imploding softly.

It Isn't All Mania

If you are reading this column, you in all probability agree with me that the Internet is going to change the way that we live across the board. You probably agree that we haven't seen but a glimmering of the beginning of the changes it will bring. This is true, but it is going to be a long-hard road to the "Promised Land". Unfortunately, it is going to be a long road with a lot of potholes along the way.

The mania isn't over. It has just subsided for a while. In the years ahead, there will be Internet related gold rushes from time to time. Gold rushes that will happen, because in large part "there is gold in them hills..." This is the fundamental difference between the Danish Tulip Mania and our present dot.com mania: if you dig hard enough, you can find value.

Making Money in a Gold rush

In the California Gold rush of 1849 - and any of the others I have studied - for every person that struck it rich prospecting for gold, there were hundreds that lost everything. It wasn't the miners or the prospectors that made fortunes.

The folks that struck it rich in each and every gold rush were those that provided goods and services to the miners and the prospectors. It was people selling denim jeans - does the name Levi-Strauss ring a bell, food, laundry service, tools, banking, and recreation.

This is a lesson that we should keep in mind as we survey the business prospects in the "new economy". Over the last few years I have watched friends and acquaintances stream into the businesses of the "new economy" one by one. I have seen them go to one "sure thing" after another. They have gone to web-tailers, and business to business exchanges. They have joined network infrastructure companies and system integrators. By and large they are all doing well, but the ones that are most secure are the ones that are selling something to the "miners" and "prospectors" of the Internet gold rush.

If you want to make your fortune on the frontiers of the New Economy, I recommend that you focus on providing services to the prospectors with stars in their eyes and cash in their pockets. But make sure that you get cash up-front, and try and get a piece of each claim that they file. Who knows, one of them might strike a mother-load.
 

Community Search:
MacTech Search:

Software Updates via MacUpdate

VoxSyn (Music)
VoxSyn 1.0 Device: iOS Universal Category: Music Price: $6.99, Version: 1.0 (iTunes) Description: VoxSyn turns your voice into the most flexible vocal sound generator ever. Instantly following even subtle modulations of pitch and... | Read more »
Catch Battleplans on Google Play from Ju...
Real-time strategy title Battleplans is due for release on Google Play on June 30th, following its release for iOS systems last month. With its simple interface and pretty graphics, the crowd-pleaser brings a formerly overlooked genre out for the... | Read more »
iDoyle: The interactive Adventures of Sh...
iDoyle: The interactive Adventures of Sherlock Holmes - A Scandal in Bohemia 1.0 Device: iOS Universal Category: Books Price: $1.99, Version: 1.0 (iTunes) Description: Special Release Price $1.99 (Normally $3.99) | Read more »
Five popular free apps to help you slim...
Thanks to retail and advertising, we're used to thinking one season ahead. Here we are just a week into the summer and we're conditioned to start thinking about the fall. [Read more] | Read more »
How to ride longer and tame more animals...
It's hard to accurately describe Rodeo Stampede to people who haven't seen it yet. It's like if someone took Crossy Roadand Disco Zoo and put them in a blender, yet with a unique game mechanic that's still simple and fun for anyone. [Read more] | Read more »
Teeny Titans - A Teen Titans Go! Figure...
Teeny Titans - A Teen Titans Go! Figure Battling Game 1.0.0 Device: iOS Universal Category: Games Price: $3.99, Version: 1.0.0 (iTunes) Description: Teeny Titans, GO! Join Robin for a figure battling RPG of epic proportions! TEENY... | Read more »
NinjAwesome: Tips and tricks to be a mor...
Sorry about that headline, but I'm going to go ahead and assume that GameResort would not have named its game NinjAwesome without expecting some of that. It is, in fact, pretty awesome the way it combines an endless runner and old school arcade... | Read more »
Into Mirror (Games)
Into Mirror 1.0 Device: iOS Universal Category: Games Price: $1.99, Version: 1.0 (iTunes) Description: "Is all that we see or seem, but a dream within a dream?"- Edgar Allan Poe New game by Lemon Jam Studio, the team behind Pursuit... | Read more »
Perchang (Games)
Perchang 1.0 Device: iOS Universal Category: Games Price: $1.99, Version: 1.0 (iTunes) Description: Welcome to Perchang! A test of skill and puzzle solving across 60 stunning levels. | Read more »
BusyCal (Productivity)
BusyCal 3.0 Device: iOS Universal Category: Productivity Price: $4.99, Version: 3.0 (iTunes) Description: BusyCal is a powerful, flexible calendar app for managing busy schedules, events and to dos. | Read more »

Price Scanner via MacPrices.net

15-inch Retina MacBook Pros on sale for $200-...
B&H Photo has 15″ Retina MacBook Pros on sale for up to $210 off MSRP. Shipping is free, and B&H charges NY tax only: - 15″ 2.2GHz Retina MacBook Pro: $1799.99 $200 off MSRP - 15″ 2.5GHz... Read more
Mac minis on sale for up to $100 off MSRP
B&H Photo has Mac minis on sale for up to $100 off MSRP including free shipping plus NY sales tax only: - 1.4GHz Mac mini: $449 $50 off MSRP - 2.6GHz Mac mini: $649 $50 off MSRP - 2.8GHz Mac mini... Read more
Clearance 2015 13-inch MacBook Airs available...
B&H Photo has clearance 2015 13″ MacBook Airs available for $300 off original MSRP. Shipping is free, and B&H charges NY sales tax only: - 13″ 1.6GHz/4GB/128GB MacBook Air (MJVE2LL/A): $799.... Read more
Apple refurbished Mac minis available for up...
Apple has Certified Refurbished Mac minis available starting at $419. Apple’s one-year warranty is included with each mini, and shipping is free: - 1.4GHz Mac mini: $419 $80 off MSRP - 2.6GHz Mac... Read more
ABBYY TextGrabber: 1,000,000 Installs in 5 Da...
ABBYY, an international OCR technologies provider, has announced that their image-to-text application TextGrabber, got installed 1,000,000 times in just five days while being featured by the App... Read more
New SkinIt Waterproof Case For iPhone 6
With its impact and waterproof design, the Skinit Waterproof case provides security and protection to guarantee your phone will get you through even the most demanding outdoor conditions. The impact-... Read more
iMacs on sale for up to $150 off MSRP
B&H Photo has 21″ and 27″ iMacs on sale for up to $150 off MSRP including free shipping plus NY sales tax only: - 27″ 3.3GHz iMac 5K: $2181.11 $118 off MSRP - 27″ 3.2GHz/1TB Fusion iMac 5K: $1949... Read more
12-inch 1.1GHz Retina MacBooks on sale for $5...
B&H Photo has 2016 12″ 1.1GHz/256GB Retina MacBooks on sale for up to $50 off MSRP. Shipping is free, and B&H charges NY tax only: - 12″ 1.1GHz Space Gray Retina MacBook: $1249 $50 off MSRP... Read more
WWDC Announcements Revisited Still Underwhelm...
I was disappointed that no new MacBook hardware was announced at this year’s all-software World Wide Developer’s Conference. Not even a hint about what’s in the development pipeline. Of course, we... Read more
Twelve South Compass 2 iPad Stand Now Availab...
Twelve South has updated its most popular iPad stand, Compass 2, with the introduction of two new colors — Gold and Rose Gold. These new color options n perfectly complement the new Rose Gold iPad... Read more

Jobs Board

*Apple* Solutions Consultant - APPLE (United...
Job Summary As an Apple Solutions Consultant, you'll be the link between our future customers and our products. You'll showcase your entrepreneurial spirit as you Read more
*Apple* Retail - Multiple Positions - Apple,...
Job Description: Sales Specialist - Retail Customer Service and Sales Transform Apple Store visitors into loyal Apple customers. When customers enter the store, Read more
*Apple* Retail - Multiple Positions, Towson...
Job Description:SalesSpecialist - Retail Customer Service and SalesTransform Apple Store visitors into loyal Apple customers. When customers enter the store, Read more
*Apple* Professional Learning Specialist - A...
Job Summary The Apple Professional Learning Specialist is a full-time position for one year with Apple in the Phoenix, AZ area. This position requires a high Read more
Executive Director, Big *Apple* Performing...
Big Apple Performing Arts® (BAPA) is looking for a dynamic new Executive Director to lead the organization through its next phase of growth—an exciting opportunity Read more
All contents are Copyright 1984-2011 by Xplain Corporation. All rights reserved. Theme designed by Icreon.