Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.
Speaker 1: I'm Joe Wisn't and I'm Tracy Hallaway. So, Tracy, I
Speaker 1: think you know, and I think listeners know that, at
Speaker 1: least for me, my interest in markets like really came
Speaker 1: about during the dot combo. Yes, you have brought this
Speaker 1: up a number of times, and I have to say,
Speaker 1: I love hearing the stories of you losing money during
Speaker 1: the bubble. I made a little money. I made a
Speaker 1: little money too, but I also I also lost them.
Speaker 1: But for me, like so many things, are things that
Speaker 1: I've sort of like learned or like internalized about how
Speaker 1: that markets work, like still come from more or less
Speaker 1: that period. And I think it's obvious that on some
Speaker 1: level what we're seeing now in markets, we've seen in crypto,
Speaker 1: we've seen in tech, has some pretty obvious parallels to
Speaker 1: that period. I feel like the late nineties early two
Speaker 1: thousand's tech bubble would be a good grounding for the
Speaker 1: current market situation. Uh So I envy you that experience.
Speaker 1: But the thing that interests me a lot about two thousand,
Speaker 1: when the bubble burst and all the tech stocks collapsed
Speaker 1: and all of that, is when did people actually declare
Speaker 1: like tech is over, the tech bubble has burst. This
Speaker 1: is it? Because this is a question that comes up
Speaker 1: a lot now, right, right, So it's like what is
Speaker 1: over and what is real? And one like, so obviously
Speaker 1: a year ago there were a lot of people who
Speaker 1: on paper were worth a lot more money than they
Speaker 1: are right now. But presumably, you know, people are like, well,
Speaker 1: what's the bottom? When does this bounce back? What's what?
Speaker 1: What do we? What do we? What sticks with us?
Speaker 1: Like these are all really interesting questions, and of course
Speaker 1: no one knows the answer. But you know, all of
Speaker 1: these conversations happened after the late nineties dot com bubble,
Speaker 1: and you know, I think people forget like for years
Speaker 1: no one talked about Amazon, like two thousand one through
Speaker 1: say two thousand ex or seven. It was not a
Speaker 1: particularly prominent company that people talked about, right. So this
Speaker 1: is the other thing that interests me. It's what comes
Speaker 1: out of the wreckage of a bubble bursting. Because everyone
Speaker 1: was very excited about the Internet in the late nineties,
Speaker 1: and so you saw a bunch of companies rise up
Speaker 1: to come up with some sort of internet based business model,
Speaker 1: and then it all kind of went away after the
Speaker 1: bubble burst, but some companies that did phenomenally well decades
Speaker 1: later actually emerged out of that rubble. And the question
Speaker 1: of course now is whether or not the same thing
Speaker 1: might happen. So the question is like, how how do
Speaker 1: you know it's over? What comes after that? What is
Speaker 1: it like to lose on paper? Sort of like unbelievable
Speaker 1: gobs of money, which a lot of people are going
Speaker 1: through now. So you know, obviously there were a lot
Speaker 1: of like the dot com I p o s people
Speaker 1: remember pets dot com was sort of infamous or like
Speaker 1: hundreds and tons, but like I think the real first one,
Speaker 1: the one that really caused people's attention just like, wow,
Speaker 1: this is unbelievable amount of wealth here. I don't know,
Speaker 1: do you remember the globe dot com? You know what?
Speaker 1: It rings a bell, But I'm not that familiar with it.
Speaker 1: I think it was famous for at the time being
Speaker 1: like the biggest one day pop in IPO history. Yeah,
Speaker 1: it was, I think at one time, and it was
Speaker 1: definitely like one of the first lenges, like a little
Speaker 1: bit earlier than the rest, and so it sort of
Speaker 1: had this media ac rise um and then fall. Anyway, Uh,
Speaker 1: the the fact the co founders of the company. They
Speaker 1: were like in the media and they're famous for like
Speaker 1: being really young and really rich and wearing plastic leather
Speaker 1: pants to parties, as one does when you're young and
Speaker 1: really rich, and then of course the bubble collect that's
Speaker 1: what you were doing. But I was like, oh, this
Speaker 1: is like really cool anyway, so I'm very excited. I
Speaker 1: just want to jump right into it. This is like
Speaker 1: a personal thrill for me because of course there's got
Speaker 1: me interested in markets. We're gonna be speaking with Stefan
Speaker 1: Pat don't know. He is currently the co founder and
Speaker 1: executive chairman of Slated, which is an online film finance marketplace,
Speaker 1: but also he was the co founder and co CEO
Speaker 1: of the Globe dot com. So we're going to hear
Speaker 1: some stories about what those years were like and maybe
Speaker 1: some takeaways for people today. So Stefan, thank you so
Speaker 1: much for coming on odd lots my pleasure. That's quite
Speaker 1: an intro. So let me start with like maybe an
Speaker 1: embarrassing question, And I don't know if it's an embarrassing
Speaker 1: question for me or maybe it's an embarrassing question for you,
Speaker 1: But you know, I know a lot about the Globe
Speaker 1: because I remember the surge, I remember the I p O.
Speaker 1: I remember that you and your co founder were extremely rich.
Speaker 1: I remember you're in the media. I remember the plastic pants.
Speaker 1: What I don't remember is like, and I don't even
Speaker 1: think I knew it at the time. What did the
Speaker 1: Globe do? What was the Globe? Well, you're not the
Speaker 1: only one who may have known the Globe, primarily because
Speaker 1: of its stock price. Yeah, much to my chagrin, the
Speaker 1: Globe dot com was one of the first virtual communities.
Speaker 1: So back then we didn't call the social networking. It
Speaker 1: was called virtual community. Uh. And it was a much
Speaker 1: broader idea that the Internet was new, and there was
Speaker 1: this idea that maybe people could plug in, log on
Speaker 1: and exist online and build relationships online and interact with
Speaker 1: other people online. And that was the concept of virtual community.
Speaker 1: The tools to do it hadn't been built yet, right,
Speaker 1: So chat rooms and forums and homepage building, all these
Speaker 1: basic primitives is what we needed to build um And
Speaker 1: now we take for granted today, Right, you don't think
Speaker 1: of these basic primitives and anymore. Just think you know,
Speaker 1: I'm on Facebook, I'm on TikTok, I'm on I'm on Twitter,
Speaker 1: I'm on any of these things and you know, I
Speaker 1: just upload and share and post. That's just it just works.
Speaker 1: But back then that wasn't obvious. So that's what we
Speaker 1: we created its first generation primitives for virtual community, and
Speaker 1: lo and behold, it became one of these stickiest business
Speaker 1: models we could have ever imagined. And of course, um,
Speaker 1: you know, Facebook ran with that much more successfully than
Speaker 1: us in the early two thousand's. What was the journey
Speaker 1: like from starting this virtual community to eventually, you know,
Speaker 1: listing in a public market, because that seems like, you know,
Speaker 1: it's quite an upward trajectory, So how did that work? Well,
Speaker 1: it's it was non obvious. Um So of course, looking
Speaker 1: back thirty years later, and that's terrifying to even admit
Speaker 1: that it's been that long, it all seems obvious, like
Speaker 1: this was always going to happen. But back then, no
Speaker 1: one understood what the Internet was, right. Tim Bernard Lee
Speaker 1: is one of the creators of the HTTP protocol and
Speaker 1: h t M l UM and it's something that's super fringe,
Speaker 1: running on the dark one that that's been built, and
Speaker 1: only university professors and some really geeky university students are
Speaker 1: logging onto the Worldwide Web and creating web pages, and
Speaker 1: you really could only go browse other university websites, so
Speaker 1: it was really cryptic, hard to use. You really needed
Speaker 1: to know what you were doing, and to even get started,
Speaker 1: you needed to download what was called a browser, and
Speaker 1: the first one was really Mosaic. It was a old
Speaker 1: beta version of Mosaic, which was something that Mark Andreson
Speaker 1: had created before Netscape. And it just so happens that
Speaker 1: my old college friend, best friend at the time, Todd Kreiselman,
Speaker 1: and I we downloaded Mosaic. We we found her. We
Speaker 1: we had dial up modems. I was using a fourteen
Speaker 1: four modem, he had a nineteen point to kill a
Speaker 1: bit modems, so super slow, but we both logged in
Speaker 1: and found our way into what was the first chat
Speaker 1: room we ever experienced. That's how primitive things were at
Speaker 1: the time, and startup culture wasn't typical. Not everybody was
Speaker 1: doing startups. That was very very much a Silicon Valley thing.
Speaker 1: Most people who were in university like us, were there
Speaker 1: to go get their degrees and then go and maybe
Speaker 1: become a banker, a lawyer and you know, earn your
Speaker 1: stripes that way. So for us to want to go
Speaker 1: and try to do something different and create a startup
Speaker 1: in college, let alone one in this new universe called
Speaker 1: the Internet. Was super risky. Our parents didn't understand what
Speaker 1: we were talking about, most of our professors didn't understand
Speaker 1: what we were talking about, and we just sort of
Speaker 1: had to wing it and say, look, I think Todd
Speaker 1: and I want to we think there's something there. There's
Speaker 1: this thing called the Internet. It's just beginning. There's only
Speaker 1: a few million people around the world using it, but
Speaker 1: we've stumbled on this social experiment and chat that is
Speaker 1: so addictive. We think that could be the beginning of
Speaker 1: something huge. So that's where it started. Non obvious. We
Speaker 1: were taking the path less traveled by, certainly not the
Speaker 1: safe choice that you know, most of our friends were
Speaker 1: gonna go and get jobs and earn fifty six seventy
Speaker 1: thousand a year. We were gonna go make nothing. There
Speaker 1: was no such thing as online advertising or e commerce
Speaker 1: or any way to make money. So it was going
Speaker 1: we were going into the great scary unknown with this
Speaker 1: um well before there was ever the concept of an
Speaker 1: I p O related to the Internet space. So let's
Speaker 1: talk about that I P O I think it was,
Speaker 1: which is a little bit earlier than the real man, Russ.
Speaker 1: You're a little bit earlier out of the gate than
Speaker 1: a lot of these companies. The stocks surge six six
Speaker 1: percent of Clinic to something I'm reading here, Um, it
Speaker 1: was market Camp was a little bit under a billion.
Speaker 1: What was that like? What was that day like? And
Speaker 1: how much were you worth like the day before that day?
Speaker 1: And how much were you worth that day? Well, I
Speaker 1: think for for you to fully comprehended, for your audience
Speaker 1: to fully comprehend what it felt like that day, you
Speaker 1: would have to understand that. Uh. You know, for the
Speaker 1: four years between the inception of the Globe and US
Speaker 1: going public, there was no I P O Mania. Only
Speaker 1: a few companies had gone public in this space. One
Speaker 1: of them was Yahoo. One of them was Netscape first
Speaker 1: and it sort of blew up and it became this
Speaker 1: news item. Yahoo went public and then not also became
Speaker 1: a news item. But in the short months after they've
Speaker 1: gone public, their stocks have tanked. So people were going, Okay, well,
Speaker 1: I don't we don't quite understand what this Netscape is,
Speaker 1: this Yahoo thing is. It doesn't seem to be working. Well,
Speaker 1: what is the Globe bringing to the to the table
Speaker 1: that's new or different. Well, what we were bringing to
Speaker 1: the table in four years later was this super addictive
Speaker 1: social interaction online that was capturing people's imagination. It was
Speaker 1: still at a point where the market wasn't receptive to
Speaker 1: I p O, so we didn't know that our I
Speaker 1: p O was gonna work. We were actually coming We
Speaker 1: were in a recession in the summer of the markets
Speaker 1: have come down because long term capital management had collapsed.
Speaker 1: We were running out of money and we were thinking,
Speaker 1: I don't know that we're gonna be able to go public.
Speaker 1: We're probably gonna run out of money and our business
Speaker 1: is just gonna go under and everyone will No one
Speaker 1: will ever discovered with the internet is let alone virtual community.
Speaker 1: And that's a bummer because we've just been at it
Speaker 1: for four years talking about virtual community. But by November,
Speaker 1: and it really was on Friday November, the market turned
Speaker 1: that week and suddenly there were a couple other companies
Speaker 1: that went public. Company called Fox went public, and then
Speaker 1: a couple other small dot coms went public that went
Speaker 1: up pretty quickly. And suddenly, um after having done a
Speaker 1: three week road show for our I p O and
Speaker 1: having been turned down by all the institutions that we're
Speaker 1: looking at the marks collapsing as the market turn. The
Speaker 1: phone start ringing off the hook, calling all of our
Speaker 1: bankers saying, hey, hold on, what's this thing you guys
Speaker 1: have been saying again about the Internet and virtual community,
Speaker 1: the globe dot com. We want in. And suddenly this
Speaker 1: little three million share offering we had had something like
Speaker 1: forty five million shares of demand, massively oversubscribed x UM.
Speaker 1: We didn't manage to move the price up much again
Speaker 1: because we were worried that the market would turn again
Speaker 1: and r S one filing would go stale, and that
Speaker 1: the ICHO again would never happen and we would die
Speaker 1: right there, right right, you know, at the goal line. UM,
Speaker 1: So we just we we just told the bank let's
Speaker 1: not try to mess with the price. Let's just take
Speaker 1: what we can get. And that day we were pricing
Speaker 1: at nine dollars a share, which was way down from
Speaker 1: what we had been hoping to raise earlier in our
Speaker 1: I p O process. But that um, there was enough interest,
Speaker 1: and that morning the bankers were telling us, hey, guys,
Speaker 1: the interest is climbing. Um, we're gonna go. You guys
Speaker 1: should be pricing right around eleven a m. It's nine
Speaker 1: thirty ten am, but it looks like this is going
Speaker 1: to price at thirty dollars a share, and we were like, wait,
Speaker 1: weren't we priced at nine dollars? How's it going up
Speaker 1: to twenty thirty? What's going on? Because this was very unusual.
Speaker 1: Stocks weren't popping that that way back in the day.
Speaker 1: And another half hour later, they're saying, oh, never mind,
Speaker 1: it's not gonna go at thirty dollars a share, and
Speaker 1: we're like, okay, so what is it? Nine ten eleven
Speaker 1: and they're like, no, it's actually gonna fifty to sixty
Speaker 1: dollars a share, Like okay, wait, wait, what's going on?
Speaker 1: And within another half hour, right as we're coming up
Speaker 1: to eleven o'clock, the main trader that day suddenly yells
Speaker 1: out eight seven seven and the and I just remember
Speaker 1: that hundreds of bankers on that floor at bear Sterns
Speaker 1: stood up to look where we were standing, not understanding
Speaker 1: what was going on. And it turns out our stock
Speaker 1: had run up from seven in the span of a
Speaker 1: couple of hours. And we started getting phone calls on
Speaker 1: our cell phones and people were telling us, oh my god,
Speaker 1: it's there's something on CNN and CNBC and they're talking
Speaker 1: about the globye yo and the world record, and you know,
Speaker 1: so my partner and I talked. We were like totally
Speaker 1: caught off guard. This sort of blew our minds away.
Speaker 1: It was headspinning. It was exhilarating. It was also terrifying.
Speaker 1: We didn't really know what an I p O was.
Speaker 1: We were twenty four years old, and the fact that
Speaker 1: it went out of control up a thousand percent and
Speaker 1: was all over the news was unusual. And they're telling
Speaker 1: us it's a world record I p O. Is that
Speaker 1: is that good? Well, it's good because you're all over
Speaker 1: the media. But very quickly it was like my god,
Speaker 1: you guys left so much money on the table, Like okay,
Speaker 1: well but beer Stairs didn't want to reprice this up,
Speaker 1: you know, to ten or eleven or twelve, let alone seven,
Speaker 1: So there was you know, it was it was an exhilarating,
Speaker 1: crazy day, but we knew we had a new lease
Speaker 1: on life. Our company was going to survive. Everyone was
Speaker 1: now saying, whoa what is this internet thing going on?
Speaker 1: And our I p os somehow ended up becoming this
Speaker 1: lightning rod and kicking off I p O mania right
Speaker 1: where every dot com wanted to go public and the
Speaker 1: same thing happened, and then that we just happened to us.
Speaker 1: I have so many questions, Um, I'm gonna try to
Speaker 1: fit them all in into one mega question. Okay, One,
Speaker 1: what did you do that night? Yeah? Did you go
Speaker 1: out and celebrate? Secondly, what do you think accounted for
Speaker 1: the big pop? You know, this was a sector that
Speaker 1: a lot of people were unfamiliar with. As you mentioned,
Speaker 1: there had been some I p o s that had
Speaker 1: flopped recently, So like, why did everyone suddenly come together
Speaker 1: and you know, seemingly want to have a slice of
Speaker 1: the globe dot com? And then thirdly, what was it
Speaker 1: like pricing with the bankers? Because you know you mentioned
Speaker 1: you you went public at nine dollars, it felt like
Speaker 1: you might have left money on the table. Um, how
Speaker 1: did they actually work out that number? Well, let me
Speaker 1: start with maybe this last question and then work my
Speaker 1: way backwards from there. Um, So there had been a
Speaker 1: huge amount of capital sitting on the sidelines in the
Speaker 1: market because of the recession that had kicked in. Long
Speaker 1: term capital management had unwound. Everyone was freaking out capital
Speaker 1: pull out of the markets. So there's a lot of
Speaker 1: money sitting there waiting to be deployed, and something like
Speaker 1: a hundred plus UH road shows had been canceled, so
Speaker 1: tons of companies that would ordinarily go public that year
Speaker 1: had haul pulled their I p o S were one
Speaker 1: of the last companies on the road show that refused
Speaker 1: to quit because we knew we were going to go
Speaker 1: under if we didn't raise the money. Um. The way
Speaker 1: that the pricing worked was, you know, the banks would
Speaker 1: like you to believe that there's some giant, brilliant formula
Speaker 1: behind behind all this, but all they can never really
Speaker 1: do is look at comps and what are comps based
Speaker 1: on other comps? And what are those comps based on
Speaker 1: other comps? So it's like, okay, it's basically, what are
Speaker 1: other companies similar to you in concept? What are they
Speaker 1: trading at? What's their multiple to revenue? Or in the
Speaker 1: case of Internet companies that have very little revenue, it was, well,
Speaker 1: you know, how big is your audience? You know, you
Speaker 1: guys have you know, x millions of users versus Yahoo?
Speaker 1: How do we you know? What have they valued at
Speaker 1: right now? Well? There, their stock is low, So maybe
Speaker 1: you guys shouldn't have such a high stock price either.
Speaker 1: So it was it was it's very much. It's arbitrary,
Speaker 1: and um, you know, bear Stearns had basically said to us, listen,
Speaker 1: we're gonna take you on the road show to our institutions,
Speaker 1: to the t ro prices and Jenas funds, and we
Speaker 1: think we can sell this at you know, let me
Speaker 1: think finger in the air. Um, you know, a hundred
Speaker 1: million dollar company and that would price you guys at
Speaker 1: and the numbers may be an accurate because it's been
Speaker 1: thirty years and I don't remember exactly, but you know
Speaker 1: that's at eleven to thirteen dollar a share price. And
Speaker 1: as we went onto the road and we said, okay, fine,
Speaker 1: hundred million dollar company or ninety million dollar company eleven
Speaker 1: or thirteen dollars a share. We don't have a better guess.
Speaker 1: I mean, either way, we were only generating a few
Speaker 1: million in revenue, so these multiple seem big. Who were
Speaker 1: we to complain? But as we went on the road
Speaker 1: show and the markets were crapping out and all that
Speaker 1: capital got pulled out, m everyone would take the meeting
Speaker 1: with us. They all thought the concept was I guess
Speaker 1: a little bit mind blowing. Okay, there's this thing called
Speaker 1: the Internet. There's virtual community. People are interacting with each other, okay,
Speaker 1: and no one has seen the matrix yet, right, And
Speaker 1: most people people hadn't read Neil stevenson snow Crash, right,
Speaker 1: so they couldn't really imagine a world. Will you plug
Speaker 1: into this thing called the metaverse? But there was something
Speaker 1: to our story a virtual community, right that we're not
Speaker 1: just a site online where you look up information. It's
Speaker 1: not just a magazine online. It's not a place where
Speaker 1: you just shop online. It's a place where you will
Speaker 1: build relationships and spend hours of your life, because that's
Speaker 1: what our users were doing, spending hours of their lives
Speaker 1: in chat rooms. Something about that resonated with all the
Speaker 1: institutions on the road show. But what didn't resonate with
Speaker 1: them was the markets are collapsing. You guys should stop
Speaker 1: your ip O. Didn't you notice everybody else cancel it?
Speaker 1: So we, unfortunately, after the three week road show, had
Speaker 1: no choice. The bear Sterns trying to lower the price, like, well,
Speaker 1: no one's taking it at eleven and thirteen, they're not
Speaker 1: taking it at ten, they're not taking it at nine,
Speaker 1: they're not taking it eight like okay, so no price
Speaker 1: is low enough, and eventually bear Sterns and this is
Speaker 1: just I guess their sterns where they got some of
Speaker 1: their reputation. They were like thinking that we'll we'll scoop
Speaker 1: up the whole of the globe and by the whole
Speaker 1: thing is six dollars a share, and it felt like
Speaker 1: so sharky of them to want to pull that, and
Speaker 1: we were like, no, we're not going to do that.
Speaker 1: So we held off. And it's only because the market
Speaker 1: turned around at a critical juncture where everyone was suddenly
Speaker 1: going okay, okay, okay, what are the what are the
Speaker 1: new I p o S on deck? Fox Cool? That
Speaker 1: got priced tent below their their pop so it's well priced.
Speaker 1: And then there was another little dot com called earth
Speaker 1: Web that went up a couple and I think that
Speaker 1: made everybody click and go, oh, the action is where
Speaker 1: these dot com companies are. Who's the last company we
Speaker 1: all met with that we liked the globe? So so
Speaker 1: suddenly the timing those vectors came together and Bear Stearns,
Speaker 1: you know, we then had to twist their arm to
Speaker 1: convince them, listen, move the price back up, you know,
Speaker 1: six bucks of shares insulting you know, like, okay, eight, Like,
Speaker 1: come on, that's way below our I p O price.
Speaker 1: It should have been eleven and thirteen. Okay, fine, nine,
Speaker 1: But we can't go higher or we'll lose the interest
Speaker 1: and everyone will walk and your s one's going to
Speaker 1: go stale on Monday, and it's it's it's Thursday today.
Speaker 1: So we felt we were sort of stuck between a
Speaker 1: rock and hard place. Um, they wouldn't want it. They
Speaker 1: didn't want us to interpret the forty million shares of
Speaker 1: demand is something that should require moving the price. Even
Speaker 1: though everyone on our team thought the price should move,
Speaker 1: we kept it at nine. And that's how it got
Speaker 1: set at nine. It's because of an accident in our market.
Speaker 1: Timing brought us further down. Everyone else that went public
Speaker 1: the following week and thereafter we're suddenly coming in way
Speaker 1: above their price ranges. Forget eleven to thirteen dollars, they
Speaker 1: were pricing thirty dollars a share on the you know,
Speaker 1: the same scale, And so we realized that this sort
Speaker 1: of blew everything up for everybody else. Unfortunately, we were
Speaker 1: the guinea pig. And and what's more unfortunate for us
Speaker 1: is that all of these institutions these big players that
Speaker 1: are supposedly there to own shares in your company and
Speaker 1: hold for the long haul. And the banks, you know,
Speaker 1: when they're taking on the road show, they're telling you
Speaker 1: all about their institutional clients are gonna hold your stock,
Speaker 1: and you know they're they're big buyers, buying you know,
Speaker 1: five million dollar chunks and they're gonna hold it for
Speaker 1: the long haul, that that's going to be your base.
Speaker 1: You know, very little piece of it will go to retail.
Speaker 1: But what happened is is the day of the I
Speaker 1: p O, when the stock went up a thousand percent,
Speaker 1: all these institutions that bought in at nine dollars were like,
Speaker 1: holy shit, Christmas came early, we're dumping it. So they
Speaker 1: sold all their stock to the highest bidders, which were
Speaker 1: the ones bidding all the way up to the are
Speaker 1: a lot of institutions and day traders at that time
Speaker 1: that didn't put in limit orders, so they were just
Speaker 1: buying at market, you know, at seven ninety seven, and
Speaker 1: you know, and it meant that all the institutions dumped
Speaker 1: the stock. The stock traded hands on average five times
Speaker 1: that day, so fifteen million shares and a three million
Speaker 1: share offering and it meant that the globe was left
Speaker 1: being primarily held by retail investors, people who didn't understand
Speaker 1: what was going on. You know, the institutions did extremely well,
Speaker 1: but it meant that we had a base of investors
Speaker 1: that weren't classically long long holders of stock. So sort
Speaker 1: of that that's set us up for not a good
Speaker 1: start to our our public life. And what did you
Speaker 1: do that night? Yeah, yeah, so yes, that night there
Speaker 1: was some celebration. UM. Bear in mind, the day before,
Speaker 1: two days before, we didn't know we were going public,
Speaker 1: so we didn't really have time to call up all
Speaker 1: of our friends and tell everyone, like, guys, you know,
Speaker 1: Friday night, we're gonna be celebribrating. It's very impromptu. But
Speaker 1: there was going out. Um, there was you know, some
Speaker 1: champagne or and or vodka one of my favorite nightclubs. Um.
Speaker 1: And you know, me explaining to my then very new
Speaker 1: girlfriend that something had crazy had just happened that day
Speaker 1: and she didn't really understand what the hell I was
Speaker 1: talking about. But it was a surreal evening for me
Speaker 1: and for Todd and for our company. Um. Again, we
Speaker 1: went from our company is going to go under two
Speaker 1: new lease on life and apparently we did a world
Speaker 1: record with it, so this can only mean good things.
Speaker 1: So how much was so? How much were you personally worth?
Speaker 1: How much were you and Todd? Are you personally worth
Speaker 1: at the top? And what was the deal with the
Speaker 1: plastic pants? Because, like I said, I didn't remember question.
Speaker 1: I didn't remember what the Globe dot com did, but
Speaker 1: I do remember that you were in the media for
Speaker 1: wearing plastic pants. So what do you answer? But so, yeah,
Speaker 1: that's the story fashion choices. So you know, it's like
Speaker 1: I wouldn't want to look at what I was wearing.
Speaker 1: Vinyl was big in the late nineties. It was I
Speaker 1: think I just think I just were a little too
Speaker 1: farn uh. So yeah, I mean Todd and I each
Speaker 1: had a million shares in the company. We owned ten
Speaker 1: percent of the company each, so technically at that peak
Speaker 1: day we were worth ninety seven million each. And that
Speaker 1: was sort of the headline at the time, you know,
Speaker 1: net geeks strike it rich on the cover of the
Speaker 1: New York Post and pretty much all the tabloids. Um. So,
Speaker 1: suddenly having my dorman at the building recognized and go,
Speaker 1: oh my god, congratulations, it was I felt suddenly very
Speaker 1: vulnerable that everybody knew too much. Um, but yeah, the
Speaker 1: vinyl pants that happened a year later, among all of
Speaker 1: the wonderful media coverage and celebration and growing the business
Speaker 1: and becoming somewhat of a sensational story because back then
Speaker 1: dot com whiz kids wasn't a thing, so this was
Speaker 1: sort of the beginning of that whole thing, and everyone
Speaker 1: was fascinated, like international media in particular. For them, this
Speaker 1: is a quintessential Americana dream. Not only in America can
Speaker 1: you be a young entrepreneur, a young celebrity and make
Speaker 1: it rich, And that doesn't happen in Europe. So Europeans
Speaker 1: were just fascinated with this story. You know, a dorm
Speaker 1: dorm room college startup that suddenly ends up, you know,
Speaker 1: the nexus of Wall Street worth a billion dollars like
Speaker 1: that was completely surreal to them, and it was pretty
Speaker 1: novel as well in America. But in America, you know,
Speaker 1: there was a much more entrepreneurial spirit in general, and
Speaker 1: the start up the concept of startups was not a
Speaker 1: typical um, you know, maybe a public company at twenty
Speaker 1: four was a little bit atypical. So some of the
Speaker 1: media wanted to just you know, most of the time
Speaker 1: when we were being brought into interviews, it wasn't to
Speaker 1: get into the nitty gritty of our platform. It was
Speaker 1: to be like, oh my god, what's it like being rich?
Speaker 1: If you guys bought new houses, new cars, tell us,
Speaker 1: tell us, tell us, you're getting marriage offers. It was.
Speaker 1: It was sensational, and so to a certain extent, Todd
Speaker 1: and I accepted that, like if if we've become these
Speaker 1: dot com whiz icons, Okay, let's let's just play that game.
Speaker 1: This is how we get the media coverage and drive
Speaker 1: our traffic up. Let's not be boring about it. Let's
Speaker 1: let's let's play into that fantasy. Let's explain to them
Speaker 1: this great new virtual world we've created. Let's let's act
Speaker 1: like we're the cool We're the cool kids who always
Speaker 1: knew um what they were doing and that they were
Speaker 1: ahead of their time. We didn't. But eventually, um, you know,
Speaker 1: CNN came calling and they wanted they were launching a
Speaker 1: new series camera what's called I think it's called CNN Movers,
Speaker 1: half hour documentary with jan Hopkins, and um, they wanted
Speaker 1: to follow us around. They wanted to know what what
Speaker 1: was the what was the life like of twenty four
Speaker 1: year old public company CEOs. So they are there. I
Speaker 1: made the faithful decision to let them into my life,
Speaker 1: you know, let them into our homes. That's what they
Speaker 1: wanted to do, and follow us out. They knew that
Speaker 1: I like to go out and go to a club
Speaker 1: and go dance, and they're like, can we follow you?
Speaker 1: And I said sure, Well I wasn't gonna go on
Speaker 1: CNN and just dancing jeans was I Obviously important decisions taken.
Speaker 1: You got a dance vinyl pants exactly look I mean
Speaker 1: and back then, you know, this was way before the
Speaker 1: days of you know, Elon must smoking weed on Joe
Speaker 1: Rogan and like that's just you know, typical Thursday afternoon.
Speaker 1: I was thinking, what's the most crazy thing I can
Speaker 1: do that will capture everyone's imagination and go, yes, this
Speaker 1: is the embodiment of the American dream. Well, I'll put
Speaker 1: on my vinyl pants in some tight T shirt and
Speaker 1: spike my hair with gel and we'll go to a
Speaker 1: club and I will dance on a table and make
Speaker 1: sure that there's other pretty girls dancing there, and you know,
Speaker 1: shake a bottle of champagne. I don't remember everything I did,
Speaker 1: but the cliche what is now clearly a cliche, But now,
Speaker 1: of course it's so tame, it's it's honestly like it
Speaker 1: would it wouldn't make any news anymore today because it's
Speaker 1: just not that interesting. So part of me wants to
Speaker 1: just ask questions about what it was like clubbing in
Speaker 1: the ninety nineties, because I think that would have been
Speaker 1: an interesting experience. But um, I want to ask a
Speaker 1: serious question, which was you did the I p O.
Speaker 1: You raised a bunch of money, you had fundraisings before that.
Speaker 1: What were you planning to do with all the money?
Speaker 1: Like was there actually a plan for expansion or acquisitions
Speaker 1: and things like that? Yes, uh so there wasn't. There
Speaker 1: was definitely a method to the madness, and we had
Speaker 1: raised I think a couple hundred million dollars over like
Speaker 1: quarter five six rounds of financing. It's nothing magical. It's
Speaker 1: you raise the money you need to buy more servers,
Speaker 1: hire more people, and build out your infrastructure and your team,
Speaker 1: and you know you never have enough money, right because
Speaker 1: back then it was called Netscape poin the term GDF
Speaker 1: get big fast, So it was all about spend, spend
Speaker 1: it as fast as you can, to grow as fast
Speaker 1: as you can. Everyone the only thing they cared about
Speaker 1: were eyeballs. Whoever is getting the biggest audience doesn't matter
Speaker 1: what your revenues are. Yet it doesn't matter forget profits.
Speaker 1: Just grow grow, grow, grow grow. So after our I
Speaker 1: p O and I p Omnia kicked in and all
Speaker 1: of our competitors, you know, we'd raised twenty seven million
Speaker 1: or I p O everyone else was raising sixty two
Speaker 1: hundred million, We're like, oh my god, they're outspending us
Speaker 1: in ads and servers and hiring. It became this race.
Speaker 1: And by the way, these are the parallels of every
Speaker 1: single crypto boom bust cycles. It's interesting you see that
Speaker 1: because you know, we an that Escape was of course
Speaker 1: uh founded, as you mentioned by Mark Andreas and get
Speaker 1: big Fest. We like just didn't interview like you know,
Speaker 1: now think about all the Andres and Horowitz companies. That's
Speaker 1: sort of like how many hundreds of or thousands of
Speaker 1: companies have essentially taken jeep that netscap, Netscape GBF model,
Speaker 1: and now it's like that is the thing or that
Speaker 1: is really defined tech in this modern age. Yeah, well, look,
Speaker 1: every boom bust cycle goes through that, right. But when
Speaker 1: you start off building something on really uncharted territory, no
Speaker 1: one's exciting. Everyone thinks they're crazy and they're very scared
Speaker 1: about putting money in. Right, So first you have to
Speaker 1: tell the story and build a market and get the users,
Speaker 1: and then other companies need to tag along. And eventually,
Speaker 1: when the demand is there and the excitement is there,
Speaker 1: fomo kicks in. Right. That's when all the fast followers
Speaker 1: come in, and of course investors they go through their
Speaker 1: wave as well. Right, there's the there's the laggards, and
Speaker 1: then there's the ones with the fomo. Not right in
Speaker 1: the beginning, but a little bit later, who go, oh
Speaker 1: my god, everyone's doing well with that. I got a
Speaker 1: pile in. That's where valuations go sky high. That's where
Speaker 1: the industries get built because billions of dollars flow in.
Speaker 1: But inevitably we passed keep madness and then you know,
Speaker 1: eyeballs isn't enough. We need revenues. And then revenues isn't enough.
Speaker 1: You're losing money like crazy. You know, remember Amazon, they
Speaker 1: were losing billions of dollars a year famously, and it
Speaker 1: takes a shakeout. Right, So when the bubble burst in
Speaker 1: two thousand, two thousand one. It's because there wasn't enough profits.
Speaker 1: There wasn't enough advertising dollars or e commerce, or the
Speaker 1: margins weren't big enough to sustain all of this. So
Speaker 1: the these using capital as this defensive moat to just
Speaker 1: outspend your competition. That started in the dot com era,
Speaker 1: and then it got carried through again in UM the
Speaker 1: twenty I see omnia. It also has been part of
Speaker 1: web two point oh right, just who from Uber to
Speaker 1: Lift to UM just you name it, everybody. Capital is
Speaker 1: a defensive moat became a core strategy and in notably
Speaker 1: always leads to this shakeout. So that's part. That's the
Speaker 1: bus cycle. But the beautiful thing is is we always
Speaker 1: come out of the bus cycle eventually. Right. Some of
Speaker 1: the original players who usually started before a maniac kicks
Speaker 1: in and have have been working from first principles, not
Speaker 1: from crazy had a money pouring showering down on them,
Speaker 1: but from really good first principles. Usually those players survive,
Speaker 1: some of them don't UM, but it's the ones who
Speaker 1: work from first principles who usually do the best. Then
Speaker 1: the ones that are the most disciplined and not spending
Speaker 1: their money as fast as they can, who then continue.
Speaker 1: But those who come in later at the point of FOMO,
Speaker 1: will do so much spending to catch up and try
Speaker 1: to overtake the market, they will be the first to
Speaker 1: get to implode when there's a market controversion. So can
Speaker 1: I just ask when did you actually know it was over?
Speaker 1: Or let me ask two things? Okay, One, when did
Speaker 1: you know it was over? That the bubble had burst?
Speaker 1: And then secondly, what was your first sign of real trouble?
Speaker 1: Like is there a moment or thing that you can pinpoint? Yeah?
Speaker 1: So we we for better or worse? Where the canary
Speaker 1: in the coal mine with the globe right. We were early, Um,
Speaker 1: we could see this was going to be exciting before
Speaker 1: everybody piled in. And then we could see that as
Speaker 1: everyone piled in and more and more money was getting
Speaker 1: burned by all companies, that it was becoming untenable to
Speaker 1: keep spending our way to stay ahead. And spending your
Speaker 1: money meant using some of that cash to launch huge
Speaker 1: ad campaigns, you know, hiring more staff, bigger sales teams.
Speaker 1: You're doing that, But some of the cash and your
Speaker 1: stock as a public company was to acquire more companies
Speaker 1: as well. If we can't organically grow fast enough, we
Speaker 1: will acquire companies. Then you acquire some companies, but their
Speaker 1: valuations are going up too, so you're now paying inflated
Speaker 1: prices for other small companies to try to bulk yourself up.
Speaker 1: And you name it all the major companies, Facebook, Alphabet
Speaker 1: and all that. They they bought hundreds of companies over
Speaker 1: the years that don't largely get reported, So all you
Speaker 1: really ever see is this big top line growth, But
Speaker 1: what you don't realize is what fraction of that was
Speaker 1: the original organic stuff versus all the acquisitions and then
Speaker 1: the padding and sandbagging of their numbers so that the
Speaker 1: analysts can't quite see how you're you're buying your traffic,
Speaker 1: you're buying the revenues to try to help goose your
Speaker 1: your overall top line figures. And we were having to
Speaker 1: do the same thing. We're buying more and more companies.
Speaker 1: They were helping, but not enough. And you know, a
Speaker 1: lot of there wasn't enough advertising dollars to go around
Speaker 1: for all the Internet companies, so there's a lot of
Speaker 1: barter advertising going on, which was getting accounted by a
Speaker 1: lot of companies as revenues, but it wasn't real revenues,
Speaker 1: so there's some you know, some percentages phantom revenue. And
Speaker 1: we could see that we're on the little, you know,
Speaker 1: guinea pig wheel here, running as fast as we can,
Speaker 1: and it's getting harder and harder to keep up with
Speaker 1: that wheel. We can't feed the beast fast enough. So
Speaker 1: we could see the writing on the wall here that
Speaker 1: at some point the music is gonna stop and there
Speaker 1: won't be enough chairs to go around. So we kept
Speaker 1: playing the game and doing pretty well all the way
Speaker 1: into the beginning of the two thousands. We had our
Speaker 1: best quarter ever, which I believe was like a ten
Speaker 1: million dollar quarter million dollar a year a run rate,
Speaker 1: which back then that was a big deal. But we
Speaker 1: were still losing money. But that's when my partner and
Speaker 1: I have felt like we couldn't keep up anymore. Um,
Speaker 1: the sky was gonna start, it was gonna fall, and
Speaker 1: it was gonna fall maybe on us first, and my
Speaker 1: my partner and I taught, and I we ended up
Speaker 1: resigning and bringing in a new CEO with more experience
Speaker 1: than us could. We could bring more discipline and maybe
Speaker 1: help control costs and would maybe navigate what we thought
Speaker 1: would be an upcoming storm better than us, and unfortunately,
Speaker 1: you know, even though our revenues were climbing, traffic was climbing. Uh.
Speaker 1: We could see the storm coming. My partner and I resigned,
Speaker 1: bring in the new CEO. And then months later, um,
Speaker 1: other dot com started going under. They were running out
Speaker 1: of cash, and then the stock market started to slide
Speaker 1: over the course of like mid two thousand, spring of
Speaker 1: two thousand, all the way until the beginning of two
Speaker 1: thousand one. Everything fell, so, you know, the globe. Unfortunately,
Speaker 1: we got called out early. As you know, this is
Speaker 1: exactly what's wrong with the whole Internet space. It was
Speaker 1: always a giant hoax, you know, run by these dot
Speaker 1: com kids. But two months later everyone went down. Yahoo,
Speaker 1: Amazon drops in their stock. Um. Luckily for the big players,
Speaker 1: they market consolidated under them, right, They got to buy
Speaker 1: a lot of companies up on the cheap, they got
Speaker 1: to hoard enough cash, uh, and they made it through.
Speaker 1: Yeah who obviously didn't make it through for very long
Speaker 1: after the Internet renaissance, But out of the ashes, um,
Speaker 1: you know, Amazon came back super strong, and then of course,
Speaker 1: you know, the next generation portals came along, like Google,
Speaker 1: and then eventually the next generation social networks like Facebook. Right,
Speaker 1: so there needed to be a total washout. All of
Speaker 1: the cost the costs of building dot coms needed to
Speaker 1: come down for all these new second generation web two
Speaker 1: point oh companies to sort of be borne out of
Speaker 1: and have succeeded since. So what is it like on
Speaker 1: a personal basis to go from hundred million dollars plastic
Speaker 1: pants got the model girlfriend time to live an egregious,
Speaker 1: frivolous life. Is I think you're quoted to assume something
Speaker 1: a little less egregious and frivolous, said a little less
Speaker 1: than a hundred million. I don't know what's that like?
Speaker 1: And then how do you I mean, you have a
Speaker 1: new company now, So what don't you just talk a
Speaker 1: little bit about because there's gonna be a lot of
Speaker 1: people right now going through that who were like, we're
Speaker 1: at a billion last year and now we're you know,
Speaker 1: how do you how much that process? Like, look, I
Speaker 1: went through an existential crisis when when the globe essentially
Speaker 1: folded a year later after the dot com bubble burst
Speaker 1: and the Internet went under and the media was basically like,
Speaker 1: ha ha, we told you so you know I it
Speaker 1: made me question my own sanity. Wait, what were we
Speaker 1: all crazy with what this internet thing could be? Were
Speaker 1: we crazy? What? So? What virtual community the potential it had?
Speaker 1: Maybe we were. And it took a couple more years
Speaker 1: of licking my wounds and retreating from the world. And
Speaker 1: by the way, by the end of all of this,
Speaker 1: not only did I not have ninety seven million dollars,
Speaker 1: I was a million dollars in debt because I had
Speaker 1: borrowed a million dollars against my stock to try to
Speaker 1: also bet on other dot COM's day went under, So
Speaker 1: all of a sudden, I'm retreating from the world. I
Speaker 1: had to, you know, ask my parents to help me
Speaker 1: with to keep my roof over my head. And I
Speaker 1: barely pulled through financially. And luckily, the reason I was
Speaker 1: able to pull through financially ultimately is because three or
Speaker 1: four years later, in two thousand four, the dot com
Speaker 1: world came back with a vengeance. The Internet renaissance kicked in.
Speaker 1: You know, Google appeared and then if Facebook appeared, and
Speaker 1: I was able to corral enough of my original investors
Speaker 1: who had made returns on the globe they had invested
Speaker 1: in early and sold at the I P O and
Speaker 1: made a killing, and luckily many of them said, hey, steph,
Speaker 1: whatever you do next, we're in okay. Um, well, I
Speaker 1: don't want to run another company right now. I'm like
Speaker 1: still in shell shock here. But I see a lot
Speaker 1: of other entrepreneurs now who are going and doing their
Speaker 1: second companies. So I think the Internet is really coming back.
Speaker 1: And so I created a bunch of angel funds, brought
Speaker 1: in my my angel investors alongside me, made some bets.
Speaker 1: Those companies ended up doing really well. Uh without getting
Speaker 1: through a list of all the things they did, they
Speaker 1: were part of the new fabric of Internet two point oh.
Speaker 1: And so that got me back in the game and
Speaker 1: rebuilt my confidence as as an investor and as somebody
Speaker 1: who understood the market well enough to see what good
Speaker 1: products might disrupt the world. Um, but you know, look,
Speaker 1: it's to be honest, my confidence was really shaken as
Speaker 1: a CEO, and as you know, had hitting such a
Speaker 1: flying that close to the sun and having my wings melt.
Speaker 1: It took me ten fifteen years to really want to
Speaker 1: to really consider getting back in the CEO set. And
Speaker 1: just on that note, I mean, when you when you
Speaker 1: look at what's happening in markets, right now. I mean
Speaker 1: like the nasdact down. I think so far this year
Speaker 1: crypto crashing, people talking about a crypto winter. What do
Speaker 1: you think is happening here? Is it? Is it the
Speaker 1: tech bubble all over again? Or is there something different
Speaker 1: about this cycle? Nope, it's the same game, new players.
Speaker 1: It's the same game. Uh. And it's it's It's quite obvious.
Speaker 1: And by the way, when I had my doubts and
Speaker 1: I went lived, I got into bitcoin back when it
Speaker 1: was at Mount Cox at sixty dollars a bitcoin um
Speaker 1: and I appreciate, enjoyed watching it go from sixty to
Speaker 1: six and thought to myself, well, Jesus six d I
Speaker 1: better sell it now. And then it only went up further,
Speaker 1: so I bought back in and then it only crashed.
Speaker 1: So I realized, Okay, me trying to time the market
Speaker 1: and figure out you know, mass investor psychology, uh is
Speaker 1: not working. So what I'm gonna do here is go
Speaker 1: to first principles. Is this a long hold? Is the
Speaker 1: promise of bitcoin or really brought more broadly, blockchain, does
Speaker 1: it really have the potential to change the world? And
Speaker 1: my feeling was yeah, but this is actually more like
Speaker 1: the dot com bubble before one point oh. This is
Speaker 1: like the laying down of DARPA net. This is like
Speaker 1: before people all get dial up modems and before all
Speaker 1: of the great utilities of the Internet appeared. Right, this
Speaker 1: is laying down the fabric of of the of web.
Speaker 1: What is web three point oh now? And so I'm
Speaker 1: gonna be a long halt. And it's once I stopped
Speaker 1: trying to bet the market and repeat people's minds and
Speaker 1: tea leaves about buying and selling that I started to
Speaker 1: do really well. And I went through the first bubble
Speaker 1: and crypto winter, and then the second, and then the third.
Speaker 1: And it's in the third I c omania where I
Speaker 1: was like, there's this other thing called Ethereum World computer.
Speaker 1: I'm all in on that, and it's the same thing.
Speaker 1: It went all the way up, then came crashing all
Speaker 1: the way down, just kept holding. And if you look
Speaker 1: at the four or five major bubbles and crypto winters
Speaker 1: on a log arrhythmic scale, they keep moving up another
Speaker 1: order of magnitude higher each time. And yes, because there's
Speaker 1: a huge amount of speculation and there's a huge amount
Speaker 1: of huge amount of capital and fomo and people growing
Speaker 1: money at bad blockchain concepts and bad level one or
Speaker 1: bad level two or god knows, God knows what other
Speaker 1: ponzi schemes out there. But that's what had to happen
Speaker 1: with the Internet to begin with. Until you got to
Speaker 1: Internet two point oh, you could truly say Internet two
Speaker 1: point oh was where the world discovered the real value
Speaker 1: of the Internet. It just became hyper centralized. Well, we're
Speaker 1: still most of the world hasn't even dipped their toe
Speaker 1: in yet to crypto. Right, it's all been about the currency,
Speaker 1: not the utility. The utility it's all started and focused
Speaker 1: on the lego blocks, the building lego blocks of the
Speaker 1: financial systems you defy, right, And then it started to
Speaker 1: find a broader utility with n f t s, but
Speaker 1: again very gimmicky like you know, board eight board apes
Speaker 1: and yacht clubs and god knows what that that's cool
Speaker 1: for capturing people's imagination, but that's not the true unlocking
Speaker 1: of the broader utility of what blockchain can do. That
Speaker 1: will come later. So it's a ten to twenty year
Speaker 1: play before the world will discover the true utility with
Speaker 1: a staying power um and that will become Web three
Speaker 1: and I am beyond bullish despite seeing my crypto networth
Speaker 1: plump plummet. No problem. I haven't been buying into it
Speaker 1: because of Fomo. I've been in it since the beginning
Speaker 1: and it's still early, early early days. Imagine people panicking
Speaker 1: after Internet one point, oh bubble burst and dumping their
Speaker 1: Amazon stock. Right there, We're dumping their Apple stock right there. Oh,
Speaker 1: it's all going under. It's all a fat well. You
Speaker 1: would have missed out on one of the greatest returns
Speaker 1: you could have ever had in the history of investments
Speaker 1: with Amazon, So you got you gotta sit tight. Stefan Patterne.
Speaker 1: Honestly a real pleasure, in a real sort of thrill
Speaker 1: to chat with you and some incredible lessons. I actually
Speaker 1: like we hit we should we should have you back.
Speaker 1: I think, you know, we could talk for like two
Speaker 1: more hours about so many like here you talking about
Speaker 1: capital markets and that process was fascinating. You can talk
Speaker 1: longer just about like the period of be ingregiously rich.
Speaker 1: I'm talking about there's so much more. Thank you so
Speaker 1: much for coming on, Odd Lodge. I thought there shows
Speaker 1: like a real treat and some like extremely interesting perspective
Speaker 1: on the Internet and what's happening now in market. So
Speaker 1: that was fantastic. I love that. I love that conversation.
Speaker 1: There were so many interesting things, you know. I was
Speaker 1: just looking at the Globes chart, you know, which was crazy. Yeah,
Speaker 1: but it's crazy that you can still actually call that
Speaker 1: up because I think it turned into so if you
Speaker 1: have a terminal, you can look at the Globe dot com.
Speaker 1: I think it turned into like a shell company. Yeah,
Speaker 1: and I think they were like doing voipe stuff for
Speaker 1: a while. But what's crazy, And Jim Channo has talked
Speaker 1: about this in a recent episode, like how tiny it
Speaker 1: was because like you know, he had his beak, it
Speaker 1: was like a hundred million. The company itself never was
Speaker 1: worth a billion. And then of course last year with
Speaker 1: like the Spacks, we'd have these like fort intollar companies
Speaker 1: that didn't do it. It's crazy how small the numbers.
Speaker 1: The other thing that struck me about that conversation was
Speaker 1: when he was talking about get big fast, Yeah, and
Speaker 1: it does feel like a lot of startups have internalized
Speaker 1: that motto and you kind of wonder if it's ever
Speaker 1: going to go away, or if like just raising as
Speaker 1: much money as you can to get market share as
Speaker 1: quickly as possible expand as quickly as possible if that's
Speaker 1: just the standard forever and the market injuries and through
Speaker 1: line the fact that start that model like started Netscape
Speaker 1: and now purveys through entrees and Horowitz. It's really interesting
Speaker 1: also that the not just the get big fast, but
Speaker 1: the cycle and how the late players entered the game
Speaker 1: have to spend even more and so it creates this race.
Speaker 1: And then to hear him describe how an early two thousand,
Speaker 1: the sort of like hamster wheel is on, it's like
Speaker 1: we can't We're spending so much money and it's just
Speaker 1: like the marginal value of those acquisition dollars or growing
Speaker 1: traffic starts to decline. Like I think serious lessons for
Speaker 1: like thinking about things that upen during this second but
Speaker 1: also the realization that he described about having to bring
Speaker 1: in a new CEO and someone who could actually instill
Speaker 1: a capital discipline and maybe have like a bit more
Speaker 1: of a strategy around finances, because it feels like with
Speaker 1: a lot of these startups by you know, I don't
Speaker 1: want to call him a tech bro, but you know,
Speaker 1: technology brother, technology brother, it feels like technology brother and sisters.
Speaker 1: It feels like what you need to start something up successfully. Sorry,
Speaker 1: in a garage and like developed new technology may not
Speaker 1: be exactly what you need to run a multi billion
Speaker 1: dollar company, right, Yeah, No, it's so much stuff. I
Speaker 1: love that. We gotta have him back. Yeah, all right,
Speaker 1: should we leave it that? Let's leave it there. Okay.
Speaker 1: This has been another episode of the All Thoughts podcast.
Speaker 1: I'm Tracy Alloway. You can follow me on Twitter at
Speaker 1: Tracy Alloway. And I'm Joe Wisenthal. You can follow me
Speaker 1: on Twitter at the Stalwart. Follow our guests Defawn Pattern
Speaker 1: on Twitter, He's at Stefan Pattern, and check out his
Speaker 1: book All About This, a very public offering the story
Speaker 1: of the Globe dot Com in the first Internet Revolution.
Speaker 1: Follow our producer Carmen Rodriguez at Carmen Arman, and check
Speaker 1: out all of our podcasts at Bloomberg under the handle
Speaker 1: at podcasts. Thanks for listening.