[green_lunch]

I think it was worse in the late 90s early 00s. There is this documentary called 'e-dreams' that came out in 2001. It documents a delivery startup that didn't charge anything to deliver products to customers.

They had virtually no business model (and lost money on every order) and got millions in startup capital. The whole company imploded within a year, but some of the interviews with the executives of the company are pretty telling: they never intended on making a profit. The intent was to either get bought out by a larger company or get an IPO and bank the proceeds.

E-dreams is a really good documentary for anyone interested in seeing a small sliver out of the early days of the first .com boom/bust.

I watch it once-a-year to remind me of the craziness.

[pekk]

This really doesn't show that the situation in the late 90s was more ridiculous than today.

First, this is a very carefully selected story, not a representative sample, so it's anyone's guess how bad a measure it is of the absurdity of the overall situation in the late 90s. If we are selective we can find similarly crazy stories from last year, so that it is only a matter of selling the story that the craziest stuff is representative.

Second, the problem is not merely that people take silly risks, the problem is when too much is staked on those silly risks. If everyone thought the market was wacky and outrageous, they wouldn't stake very much. The really serious situation, where too much is staked, is one where everyone is saying things like "can't lose" leading to a system which is structured for catastrophe.

Third, to say it was worse back then implies that we know how bad it is now, which really drives us to the heart of the issue - what evidence we have today. It doesn't really matter about how crazy we think it was in the late 90s.

[zanethomas]

Sure, now they all have business models. But how realistic are those models? Were they contrived by the same sorts of who gave us the housing bubble?

[andyjdavis]

I haven't seen e-dreams but the documentary sounds somewhat similar to Riot On which is actually from 2004 I believe. It is about a company called Riot Entertainment that took in millions in funding from a bunch of high profile sources, made a ton of fairly dubious decisions before imploding.

https://www.youtube.com/watch?v=g0lrIi0ce5E