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Tagged with History

John Collison on why the early 2000s had a Telco Bubble, not a Dot-Com Bubble

John Collison talks about why the Dot-Com Bubble is a misnomer:

People don’t really remember this, but by market cap, the 2000 bubble was really a Telco bubble and not an internet bubble — in that the run-up of the WorldCom stock’s and companies like that, it was much larger in terms of total size than all the internet companies [at the time].

There’s some good reading to be done on what happened with that. It really drove a lot, you basically had all this investments and optimism around the growth of the internet.

I think it was WorldCom kept going around with this talking point of the internet is doubling every 4 months and it felt like it was going to the moon and bandwidth and things like this. That ended up with this incredible oversupply of internet capacity, fiber especially, that then made things really cheap for when everything washed out in 2001, 2002. And as a result, it was a platform on which everything else could build [upon] during that period following.

John Collison on John Malone’s Liberty Media

John Collison on how history rhymes:

I was pretty interested in the cable companies that emerged in the late 1980s, early 1990s. This is like a particularly American phenomenon. It was a new technology platform, new technology paradigm, laying coax cable to all these towns across America. And you had way more television bandwidth, number of channels possible, than previously was the case. When you read it, it actually rhymes a lot with some of the technology shifts that we see.

Firstly, [there is] John Malone, who’s one of the most successful serial acquirers of all time with Liberty Media, where they basically continue to roll up small cable companies and build a very large company out of acquiring kind of small little local cable companies.

The second thing that was of course, interesting is it was one of the original kind of new technology company from out of town versus local municipalities. And it was funny as I was reading Cable Cowboy: John Malone and the Rise of the Modern Cable Business, they describe how one of the cable companies, I can’t remember who, getting into spat with a local Colorado town and changing the programming to just be “Call your mayor and tell him you want cable in your town.” And you know, exactly like the tactics Uber might’ve used, during that period when they were getting into fights with local cities.

Again, there’s a lot of history repeating itself.