The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers

The Hard Things About Hard Things draws its inspiration from the author’s experience during the first tech boom, which spanned from the mid-1990s to 2000. During this period, the Internet was becoming mainstream, thanks in large part to web browsers like Mosaic, Netscape Navigator, and Internet Explorer. The Internet was the harbinger of the Information Age, and the potential for selling goods and services online launched a multitude of startup companies eager to cash in. Many of these companies chose Internet domain names ending in dot-com (for example, www.CompanyA.com). This gave rise to the generic term “dot-com” to describe these startups.

Conflict arose when these companies began to trade their stocks publicly. Both institutional and private investors were eager to buy and happily snatched up dot-com shares, thereby dangerously inflating tech stock prices. The fact that venture capital was easy to acquire at this time accelerated the trend toward the overvaluation of tech stocks. Because high-tech companies were a novelty, investors were willing to buy shares based on the new technology’s potential earnings rather than insisting on a solid track record of past performance. The same Gold Rush mentality afflicted earlier generations of investors when the novel technologies of their day first appeared; stock shares for railroads, the automobile, radio, and television all went through similar boom-and-bust cycles.