1995-2000: A Turning Point in the Economy

From 1995 through 2000, a major turn in our economy occurred when the number of Internet users dramatically increased. Today, this time period is commonly referred to as the dot-com era or dot-com bubble. “Unrestrained by business models that required making a profit and having huge sums of money from venture capitalists (private investors), many dot-coms engaged in daring and sometimes fraudulent business practices” Turban, Volonino, & Wood, 2013, p.157). Ultimately, the stock prices continued to inflate, increasing the bubble until it burst in early 2000. Eventually, we learned our lessons about the dot-com bubble and its impact on the economy.

Surviving the Dot-Com Era and the Lessons Learned.

There are several lessons we can take away from the dot-com era according to the founder of the Dot Com Archive. First, investors seek out those who have a long-term plan. This leads into the next lesson learned, which is to not put all your eggs in one basket. Again, having a plan is important. When starting out, it’s important to start small and work towards big goals instead of the other way around. If not, the company is likely to fail, which is the case for Webvan, who put their entire efforts and resources one plan, which ultimately failed. It’s equally important for any entrepreneur to understand when to keep going, and when to stop. Having a business plan can mitigate failure, and help provide foresight when it’s time to change the plan. Even with a plan, business ventures can be forgiving if you are patient. Sometimes the way to success is through failure first. Lastly, the dot-com era showed us that there are many great ideas out there, but nobody know if it will ultimately succeed. Business opportunities are a lot about taking risk in hopes of reward. Knowing when and how much risk to take is important, because it could make or break the business. Those who survived this era learned that having a plan is the most important lesson about successful business start-ups (Warner, 2009).

Why Webvan Failed.

The Webvan Group was one of thousands of companies looking to make a quick profit with the goal to sustain itself long-term, but failed when the dot-com bubble burst. The company “promised to revolutionize the business of grocery shopping -somehow managed to accomplish all these things in little more than 18 months” (Glasner, 2001). Their failure didn’t come as a major surprise after their customers decreased dramatically in a short amount of time leading to a loss of profit. “In the first quarter of the year, Webvan had reported a net loss of $217 million and an accumulated deficit of $830 million” (Glasner, 2001).

Ultimately, they failure came from assuming too much, too quickly and not having reserve savings to help out when service was slow. “It didn’t help that while customers were slow to buy Webvan’s munchies, investors had been too quick to buy its stock. Their early enthusiasm pushed Webvan to expand more quickly than was wise. When Webvan began making incredibly aggressive investments, that’s exactly what investors were telling it to do. Then Wall Street one day changed its mind, and Webvan suddenly found itself with an extraordinary amount of infrastructure and without the ability to get to profitability” (Glasner, 2001).


Glasner, J. (2009, July 10). Why webvan drove off a cliff. Wired, Retrieved from

Turban, E. Volonino, L. & Wood, G. (2013). Information technology for management: Advancing sustainable, profitable business growth (Ninth ed.). Hoboken, NJ: John Wiley & Sons.

Warner, A. (2009, January 30). 5 survival lessons from the dot com bubble. Retrieved from

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