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> To be fair, true developers were not really negatively affected at least not more so than other professions.

My anecdote is the opposite: My father was an engineer at a company that made machines for semiconductor manufacturing.

They had a physical product, customers liked them, they sold each machine at a profit - none of the obvious-with-hindsight folly of companies like Pets.com.

However, when the dot-com bust happened they went out of business anyway. Turns out the collapse of the likes of Pets.com dropped the demand for semiconductors from the point where every wafer manufacturer wanted to expand capacity to the point where no-one wanted to. Boom, no orders. And of course, some investors when they see 'tech stocks' are falling, will sell your stock even if your business is much less speculative than the likes of Pets.com.

There were three lessons I learned:

1. Your business may be nothing like Pets.com and may seem to have strong fundamentals - but if the bottom falls out of tech stocks, you can end up unemployed anyway.

2. When the going gets tough, satellite offices get hit before head office.

3. If you have car/mortgage/credit card payments, you can get insurance that covers the payments if you lose your job. A lot of the time this isn't a good investment - but once the company started laying people off and everyone could see the writing on the wall, people with debt brought gold-plated insurance and were glad they did.

One more note for your first lesson: you might have a hot product that you sell at a product, but your own salespeople can kill you.

Lucent (AT&T spun them off to commercialize things from Bell Labs) had the absolute best product of the late 90s/early 2000: the Ascend MAX DSLAM/modem bank. Before that, an ISP needed T1 phone lines (24 channels) plugged into a CSU plugged into 24 modems plugged into a chassis that would emit serial that would be plugged into a router, along with a server that would do authentication and logging for billing and IP assignment. The Ascend MAX turned all of that into one box: phone connections to ethernet and all services provided and remotely administrated. Insanely great.

The problem was that Lucent's salespeople were very good, and the market for new ISPs was huge -- everybody was starting one or expanding their available markets -- so Lucent started offering financing.

When you finance your house or car, your loan is backed by the asset: the house or car still has some large percentage of the loan value at any given time, even with depreciation.

When you finance your ISP equipment purchase, Lucent assumed that they could always repo the MAX and sell it at a discount to some other growing ISP.

They didn't count on the ISP market collapsing.

Yes, it can definitely be the opposite. And product companies can have the hardest time if their target audience was the bubble companies or those that supported the bubble companies. This is also part of why I think a lot of things are different this time around, although we could still crash, but I personally feel it would be different.

Last time much of the entire market and product was new, e.g. web purchasing was barely in its infancy, companies were building up around that and the web wasn't an integral part of peoples lives, yet. Today, everything we do is around smart devices, the internet etc, so I don't think a collapse like we saw during the dot com boom/bust is likely. But that's just my opinion, could be totally wrong.

> To be fair, true developers were not really negatively affected at least not more so than other professions.

That was my experience as well, all the weird roles got cut in companies, all the crazy extras removed, but the companies that had working business models kept on trucking and hiring competent developers, and competent developers at unsustainable businesses had no trouble finding new work.

Because at the end of the day, the dotcom crash was about the crazy financial expectations of internet-enabled companies, not a rejection of the internet itself.

Austrian school of economics believes that occasional recessions are useful because they destroy bad ideas (not exclusively bad ideas, but many bad ideas) and therefore free up resources for new ideas. Some of which will be good, some bad.

For a huge example: Madoff was only discovered because of the 2008 crisis. SEC had plenty of evidence against him for years before that, including the fact he did not actually trade! The guy didn't even trade securities and posted consistent double digits returns! The SEC did not investigate. Only when clients started asking for funds has the scheme collapsed.

I that is the SEC for you. At one if the firms I worked at we had an algorithmic trader who did hundreds of thousands of naked shorts (selling short a stock he didn’t own). He always canceled the order, bought shares, or swapped internally but was still a no-no, and he would do this thousands of times a day. He got caught and we put together a report of his activity that required a hand truck to deliver. The SEC took one look at that and made the firm promise to increase their internal oversight and that was it. They didn’t even open any of the boxes.

Naked shorts are still legal if you're a market maker, for example. They're not entirely bad, it's sort of like credit - it's only bad when you fail to deliver. If you do deliver then it's great as it lubricates the system. See "Regulation SHO":

https://www.sec.gov/investor/pubs/regsho.htm

Not sure if this was the case at your company, i.e. if they had the permission to do so. If not then I don't know why they didn't prosecute that trader. Most organizations cannot do naked shorts and have to pre-borrow securities.

    occasional recessions are useful because they 
    destroy bad ideas (not exclusively bad ideas, 
    but many bad ideas) and therefore free up resources 
    for new ideas. Some of which will be good, some bad.

I feel this was absolutely true for the world of internet applications.

The stuff built in the early dot-com era was typically garbage from a technical standpoint. Heaps and heaps and heaps of spaghetti code written in PHP, Perl, and ASP Classic. You could theoretically write maintainable code in those technologies if you were truly dedicated but this was decidedly not the norm.

Think of literally any basic best practice for writing either the server or client portions of a web application that we might follow in 2019. In, say, 1997 those best practices hadn't been invented yet and even if you traveled back to 1997 in a time machine you couldn't implement some of them since the technology hadn't been invented yet.

From a technical perspective, roughly 2002-2006 was when things started to get really good from a technical standpoint.

- A lot of untalented folks (people calling themselves "developers" but with no real coding ability) were filtered out of the industry.

- A lot of lessons had been learned about how to build this stuff.

- More and more people were getting high-speed internet access.

- The use of AJAX to build responsive client-side applications became a thing, thanks largely to...

- ...Google, who released two absolutely world-shaking web applications in Gmail and Google Maps. These became something of a guiding light in a number of ways. Both from a technical showcase of what could be accomplished with web standards, and a design perspective... it showed a lot of pointy-haired bosses that what people wanted was minimal design and maximum usefulness, not a flashy multimedia experience.

- Other "Web 2.0" tech like RSS matured and enabled LOTS of cool demos (sadly we've moved away from this...)

- Pressure from Firefox forced Microsoft to finally embrace some more web standards and we edged away from the brink of a Microsoft-ruled internet

Dunno. Practices in 1997 and 2002 didn't differ in very appreciable degree, just that piles of crap C++ became piles of crap Java. AJAX was made possible not by Google but by Microsoft's XHR and IE5. RSS never took of in any appreciable commercial way…

I would say the bust had no substantial impact on technology side of thing. Perhaps the pricing became bit more modest, and sure, lots of careers were "filtered out".

Ajax was made technically possible by Microsoft XHR and IE5. It took Gmail and gmaps to bring this to wide attention.

Yes. I remember people (including me) being a bit amazed by the web version of Outlook that first made use of it. Technically MS introduced this functionality in IE5 in 1999, as an ActiveX control.

It was a Microsoft-only thing for a while though, until Mozilla/Safari/Opera implemented their own versions. That took a few years IIRC.

At any rate, Gmail was what made the world really take notice of what AJAX could do.

For the record there where a lot of people that where doing the same thing before the XHR object, they where just using an iframe and polling to get the data which was usually an HTML snippet or XML. They would construct the url for data with JS in the main frame, change the url of the hidden frame to point to a different CGI script, get the data and read it into JS variables. It was just that none of them got the exposure of Gmail or Outlook web. Now in saying that iFrame polling was a huge hack and a major PITA but it worked. IIRC one of the major CGI/Perl chat apps used this hack to update the web chat window.

>I would say the bust had no substantial impact on technology side of thing.

I think that it did, because it focused development efforts of companies that remained in business. Many failed dot-coms should have failed before the bust, but they kept acting like working businesses as long as they had capital available. They diluted markets, absorbed development talent by offering equity and large salaries, and in general distorted the whole industry.

After the bust, the technologies and idea that got attention/effort/built up were the ones with a solid foundation, not the pipe dreams.

One thing I will add too, is if you do go back to the enterprise or at least out of tech, make sure you don't allow yourself to stagnate or miss the upswing. I saw that happen to friends who got salary stuck making half what they would had they joined the broader market during the recovery. Enterprises can rescue you in some instances, but they are not usually great for salary growth outside of a few key places and people.

So I'd only caution people to pay close attention the whole time so you can know when to jump back into the market and to capitalize on that next salary increase.

> To be fair, true developers were not really negatively affected at least not more so than other professions.

I did fine in 2009 when I was laid off, getting a job in a month, but hiring can be random and I knew some great people that struggled to find their next role. Some developed issues as a result that raised the bar yet higher. People are crazy and irrational so never take these things personally. Deliver good work and keep acting in good faith to find a place that will treat you well. Smart people don't want to live in contexts of misery.

Yea, I think this is the normal thing that happens to good people that do their work and contribute to the team. And you are so right, don't take it personally because that can eat you up and it was almost never personal.

>Ironically a lot of money can be made in downturns if you know where to look and how to approach it.

Can you expand on this? I'm honestly curious about what machinations begin once a company dies or the market sinks.

Start a new company. Lots of talent available and investors look for heads-down new things. Classic Namazu stuff.

Capital's harder to get, but personnel and real estate is cheaper if you get funded. And then while you develop, hopefully the market recovers, and there's cash available for subsequent rounds and with customers to buy your stuff.

And it really depends on who your customers are. The amount of cash available during a recession doesn't change. It just gets more sluggish and people tend to be more reluctant to let it go. But it's there all the same.

I don't know if people tend to be more reluctant to let it go, they just change where it goes. As an example, a company I worked at during the dot.com crash made a lot of bones in regulatory compliance until 9/11...at which point, redundancy and high availability became the money machine.

What is "classic Namazu stuff"? I have never heard that phrase.

It's probably not super common, I just like to use it to describe economic upheaval and opportunity.

So there's this giant catfish in Japanese mythology, the Namazu. It's captive in the ocean, under a giant keystone held down by the daimyojin Kashima. When Kashima gets tired or distracted, he lets off pressure a little, the Namazu wriggles around to get free and that wriggling sets off earthquakes and subsequently, tsunamis.

After an earthquake, there's always a rebuilding and a redistribution of wealth. And after the Edo earthquake of 1855, woodcut prints depicting the namazu and society (namazu-e), money falling from the sky, businessmen vomiting and defecating money, etc. got super popular. (https://www.illustrationchronicles.com/When-Giant-Catfish-Sh...)

Others already mentioned some keys.

But a couple key things change (many more do too these are two I look for), yes capital is harder to come by, or at least requires better fundamentals and connections but the overall market is in a selling mood (e.g. good buying market). So enterprises and healthy businesses are looking for things to buy on the cheap (which is relative to the high of the market), and how to expand cost effectively. There is of course a cool down period that you have to get through before this starts happening.

Enterprises after they snap up their initial FTE roles they need to fill start looking for a lot more consultants to fill project roles versus bringing on more FTE's. This opens up more consulting gigs at pretty favorable pricing usually. You can now hire people to expand a consulting practice because people are less expensive so you can grow when things are "down" for others.

When the air pops out of the system people also get discouraged from the market and run away. A lot of the speculators will back out and so it becomes a more sane environment for a few years. If you are a developer and just work through it as things recover you change jobs a couple of times and you can really jump your salary during the recovery because there is a time when demand becomes super high but supply again is low. This also is again where it is awesome to be a consultant, I kept increasing the rates for my company all through the downturn and people would pay.

Outside of tech a downturn is usually time to capitalize on real estate, rentals and a host of other things. But you have to set yourself up to do this usually a little before things take a full slide into that first year. But if you are relatively debt free and can take some debt on during the down point of the market on real estate you can make a lot of money on the upswing. To be clear, real estate may not crash at the same time or rate, or may not at all. But the demands for rentals vs buying changes as does the buying power of people, so you can leverage those both.