A Dot-Com Level Unwinding?
Taking stock of the absolutely insane past two weeks
A founder friend texted on a group thread, “Is this the craziest 2 weeks of our lives in tech?” And then he answered his own question, “I say clearly yes.”
I replied, “I mean the SBF thing is insane. But what else?”
He texted back, “elon closes twitter deal, earnings season wreckage for all of faang, layoffs every which way?”
Oh yes, how could I forget.
FTX has been dominating my mind: The collapse of a company once valued at $32 billion, a company that raised $210 million from the preeminent venture capital firm in the world — that’s not supposed to happen. That Sam Bankman-Fried, the CEO of FTX, could go from the Democratic Party’s second biggest donor to Sequoia writing its investment in his company down to zero is crazy. (Make sure to read, Bankman-Fried’s Cabal of Roommates in the Bahamas Ran His Crypto Empire — and Dated.”)
Elon Musk’s handling of the Twitter acquisition — whichand have been covering in gripping detail over at Platformer — has been no less jaw-dropping. Musk told Twitter’s staff that “bankruptcy isn’t out of the question.”
Yes, the stock market had a good week. The NASDAQ Composite is up 6.4% over the past five days. (Down 29% since the start of the year.) But Meta’s decision to axe 11,000 people, 13% of its staff, overwhelmed any good feeling from a brief stock market reprieve.
I went viral on Twitter this week calling the FTX implosion a “dot-com bust level event.” It was certainly a pivotal moment in crypto. The guy who convinced the mainstream press that he was the smartest guy in the room had almost everyone fooled.
But, what do I know about the dot-com crash? I graduated from high school in 2008. I’m a Great Recession kid.
So I asked a couple people who might remember the ultimate unwinding for the tech sector. I posed some version of does this feel like the dot-com bust yet?
I asked Mark Cuban, who made his fortune selling a company ahead of the dot-com crash, Bessemer’s Jeremy Levine, who sits on the board of Shopify and is someone I turn to with questions like this, and Howard Morgan, the the 76-year-old co-founder of First Round Capital and chairman of the B Capital Group. And after I nudged her on Twitter, Elizabeth “Beezer” Clarkson, a partner at Sapphire Partners, weighed in too.