The Most Important Lesson From The Dot-Com ErasteemCreated with Sketch.

in #busy5 years ago

Do you look at the placement of cryptocurrencies on Coinmarkcap? Are you one who feels this is important information?

Unfortunately, we know the answer for a lot of people is "yes". I cannot tell you how many times I see people writing about the fact that STEEM is falling on coinmarketcap. To make matters worse, they seem to believe that this is an indication of what is taking place on the blockchain (or any other for that matter).


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What is occurring here is people are failing to apply one of the most important lessons from the Dot-Com Era. That was a time when markets were bidding up (and eventually down) different companies. Tens of billions were pumped into startups by venture capitalists. The next "big thing" was just around the corner.

Of course, in the case of companies such as Amazon and Google, it was. Nevertheless, there is an important lesson that applies to what we are witnessing today.

Although we are not looking at a bubble at the moment, valuations are being placed on different projects by the "markets". We see different blockchain projects getting millions invested in them. Some of these are going to turn out to be remarkable. Sadly, many are going to end up in the "what could have been pile".

The reason I say this is because of what we learned 20 years ago. When looking at what was taking place then, and seeing the parallels today, I am reminded of one simple conclusion:

Speculators, venture capitalists, and money managers are horrible at picking technological winners.

It is a lesson I hold close.

We only need to consider companies such as WebVan.com, Pets.com. Floorz, and eToys. All of these were companies that raked in tens of millions of dollars from venture capitalists. A few of them had marketcaps over a billion dollars. They were promoted by known celebrities who pitched how those companies were going to change everything.

That does not mean that those pitches were not correct at times. Priceline and William Shatner enjoy a long partnership with that company radically altering how we make our travel arrangements. However, the lessons of WebVan are more important.

I see a lot of similarities to what is happening in the blockchain world. The reason I ask the question "what is happening on those blockchains" is because I witnessed the non-rational thinking in the late 1990s.

To provide a technological solution, there needs to be development. Marketing is meaningless without something behind it. All the companies mentioned were able to take millions of dollars and put it in promotion. In the end, they went bust. The question "what are those companies actually doing" yielded no sufficient answer.

Some might remember Yahoo as a $500 stock. While that company did succeed and had a business plan, it ended up being a bit player in the world of search. Once again, even a winner was grossly overestimated. Google beat the pants off that company by developing a bunch of technologies that did change how people operated. In addition to search, it took over the world of email. These were two of the biggest applications over the first decade plus of the Internet.

Is it any wonder it is one of the biggest companies in the world right now?

I also heard some mention the fact that Steem needs a "face". This also applies to that era. I saw many 23 year olds with degrees from prestigious institutions show up looking good with a smile on their faces. That is all it took when added to a sales pitch about something most knew nothing about. The checkbooks opened up instantly.

Of course, the result was a major tax write-off since the 25 years old, ex-CEO was out looking for a job two years later.

History might not repeat itself but it is very similar. Human behavior tends to change very slowly. When mixed with an emotional issue such as money, we tend to fall prey to doing the exact same thing.

So I challenge anyone who feels that marketcap is important: go through each of the tokens ranked ahead of Steem and write down all that is taking place on those blockchains. This is an exercise that will really enlighten anyone who does it. When I say "taking place", I mean truly happening. Do not put down speculation, plans, or ideas from the White Paper. I mean good to honest development.

What applications are there? Is there development code actually being written? What is being done now that will provide users with something a year or two down the road?

Looking at these tokens from this perspective shows the field gets thin very quickly. I would say many of these are more likely to end up as eToys rather than eBay.

I put Steem in the later category. My optimism stems from the fact we can see things happening. Look at the number of applications and what is being done with each of those. Notice how often there are updates from the likes of Steemhunt or Actifit. Tribes are forming which is creating a "hivemind" of ideas that is helping to broaden the appeal.

Steem will not be the only game in town yet it will be there. This ecosystem is not going away. Using most any metric, outside of price, it is growing and expanding. There are more accounts being opened up which means more potential users. The number of accounts getting their very first SP grows each week. More applications are appearing on a monthly basis. Activity on applications such as Splinterlands is reaching all time highs.

Yahoo may never have reached the same price level again yet it did survive because, in spite of the market, it kept developing. While not in the same class as Google, it was one of the Dot Com success stories. Over the years, I am sure, it created a lot of millionaires and is still a service that many use. Yahoo mail is still the second largest email platform and their financial page is very popular for basic information among investors.

How will Steem end up? Time will reveal that answer but we have the most important factor covered. Each day, activity is taking place in an effort to move things forward. In addition to development, there are tens of thousands of accounts that are posting and transacting. In this social media world, this is nothing but it is a start. If some of the Dot Com companies I mentioned had this foundation, things might have turned out differently from them (and their investors).

Many companies had tremendous stories during the Dot Com Era. Unfortunately, that is all they had. There was nothing that connected the story to a practical tool people could use. Those that were able to bridge the idea into reality did well.

It is something that we need to continually apply to the world of cryptocurrency and blockchain. We need to ignore investors, speculators, and pumpers as being technological buffoons when it comes to picking winners and losers while digging deeper into what is taking place. This is where we can find the true winners.

Marketing pitches are a lot easier to create than developing practical solutions that people will use.

The Dot Com Era was littered with them.


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Very good points. The fact that this is a “busy” blockchain with progress taking place daily gives me hope.

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Bad memories when I saw eToys but so true that failure is part of the filtering process to ensure development is more relevant to the demands of the technology.

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Look at the travelfeed announcement today. Not only have they set up stall on the STEEM blockchain with their own exclusive interface. Now they will be onboarding their own users and building a separate community there. Their website is well designed with quality posts on it. Not only that, they are bypassing a lot of the technical parts of STEEM that make it tough to use so that they can onboard the normal users. These people can then learn more about STEEM if they wish in their own time. Brilliant development.

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