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Survivors (and Victims) of the Dot-Com Era

by Erin Biba

When the dot-com bubble burst in the early 2000s it was a make-or-break moment for countless digital companies. CEOs and founders who were international superstars at the time suddenly found themselves in the red. “It was so extreme, it did kill careers,” says Mark Weber, Curatorial Director of the Computer History Museum’s Internet History Program. Looking back, it’s hard to say what the success stories had in common, but there’s a pretty easily identifiable trend among the failures: a whole lot of overpromising.

“They were not in a position to uniquely deliver on their promises,” Weber recalls. “They were being floated on venture capital and they didn’t have special skills to back up their ideas. The ones that did succeed had a unique service that they were actually equipped to deliver on. Had the crash not happened, some companies would have survived, but they didn’t have enough cash [at the time].”

Still, there are some strange quirks that accompany the bust. For example, “when you looked at actual growth of the number of people using the web—the number of websites and people using them—the line pretty much didn’t change through the boom and bust. The stock market was going crazy but the Web kept growing at the same pace before and after,” he says.

And that meant some companies and careers managed to weather the storm. As for those who lost their shirts, victims include familiar names whom you’d never expect to be counted as failures in their fields. In fact, many of the businesses that went bust did so after their leaders sold them off to the highest bidder for a nice chunk of change.

“The companies end up being a temporary shell around groups of people who know each other,” says Weber. “It becomes a profession for them—starting companies. They don’t all take off in a big way. Often they get sold to someone else and the serial entrepreneur types just keep moving on.”

 

James H. Clark (Victim)

Founder, Netscape

“Netscape was far and away the single most important company at the time,” Weber says. Launched in 1994, Netscape Navigator dominated the Internet until the late 1990s when it was the first major casualty in The Browser Wars. By the end of the decade its entire business was essentially killed by Microsoft’s Internet Explorer. Clark, the company’s founder, may have failed in saving the browser but he’s not so worse for the wear. Today Clark is worth $2.1 billion, having been an early investor in Apple, Facebook and Twitter, as well as founding net-based health information behemoth WebMD.

Jeff Bezos (Survivor)

Founder, Amazon

The internet shopping warehouse launched in 1997 in Bezos’ garage and managed to survive the bust. The site has been a runaway success ever since. In November, the titan’s net worth surpassed $100 billion (he made $32 billion in 2017 alone), making him one of the richest men in the world. Though he hasn’t given much of that to charity, the CEO has used his wealth instead to purchase The Washington Post and launch his own private space company, Blue Origin.

David Bohnett (Victim)

Founder, GeoCities

In 1999, GeoCities—a web page hosting service that operated essentially like the original AOL— was the third-most visited website on the Internet. That same year, the company was sold to Yahoo for $3.57 billion in stock despite the fact that it had some $8 million in losses the year before. Bohnett took the money from his sale (about $300 million) and launched a venture capital firm. Today, GeoCities is defunct but in addition to his entrepreneurial activities Bohnett runs his own foundation that supports arts, education and LGBT rights.

Pierre Omidyar (Survivor)

Founder, eBay

When online auction site eBay went public in 1998, its founders became billionaires and the site barely blinked an eye during the dot-com bust. Omidyar is worth about $10 billion today, which he uses to invest in real estate as well as resorts in California and Mexico. The billionaire also owns a media company, which runs online news site The Intercept, and in 2016 he launched a venture capital firm.

Greg McLemore (Victim)

Founder, Pets.com

Pets.com was a massively high-profile digital pet supply store that, despite having enough capital to purchase a Super Bowl ad, lived for exactly two years—from 1998 to 2000. McLemore managed to get out just before the bust by selling the company to a venture capitalist firm that partnered with Amazon. Pets.com is long dead, but McLemore is now the CEO of Pasadena real estate development firm Octane and is, according to his LinkedIn page, “a serial entrepreneur.”

Angie Hicks (Survivor)

Co-Founder, Angie’s List

One of the less well-known companies launched amid the dot-com era (and one of the very few to be founded by a woman) Angie’s List was started in 1995 and very quietly marched its way through the bust. In fact, the site wasn’t wildly successful until 2015, when it jumped from 70,000 subscribers to 3.2 million in just two years. In May of 2017 the site was sold to IAC (which also owns Match.com) for $500 million and Hicks has remained with the company as its CMO.

Shawn Fanning (Victim)

Co-Founder & Lead Developer, Napster

The peer-to-peer music downloading service was one of the most notorious sites of the era. Peaking at more than 25 million global users in 2001, the site collapsed after lawsuits essentially forced it to become a legal business. And while Fanning’s co-founder Sean Parker would go on to become President of Facebook (he’s now worth about $2.6 billion), Fanning didn’t fare as well. In 2011 the two teamed up for a live video website called Airtime, which emulated Chatroulette and was plagued by glitches.

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