What the bubble got right

Paul Graham, the author of Hackers & Painters, has published an article about the dotcom bubble and has some interesting insights on it:


Too bad that things work in a totally different way in Pakistan. Firstly, the concept of VCs is alien to most people and you’ll be hard-pressed to find many “26 year old” entrepreneurs (hey, I’m one of them ). Most businesses are started and run with personal savings after years of work or with the help of rich parents for the lucky few that have them. That’s another reason why it’s so tough to do business here without “powerful connections”.

Secondly, IPOs are quite rare and happen only after a company has been profitable for many years and has at least a few hundred employees. That pretty much rules out stock options as an incentive to work for a startup.

As for technology, it consists mainly of redoing or improving on what has already been done elsewhere. There is little in the way of new ideas and innovations. I see the same mistakes being made here that were common in the US and other technology centers a couple of years ago. Maybe it’s because people are too busy worrying about putting food on the table and other short-term problems.

The one point I really liked in the article was how what we’ve seen of the Internet is nothing compared to what’s coming. The medium is still in its infancy so this isn’t surprising. Just look at how much things have changed since the bubble burst. I think we are only now beginning to see the real advantages and these should increase as it matures.