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Comment by acdha | Hacker News Reader

> The .com bubble was largely companies with no business

Ah, yes, companies like Amazon.com, eBay, PayPal, Expedia, and Google. Never heard of those losers again. Not to mention those crazy kids at Kozmo foolishly thinking that people would want to have stuff delivered same-day.

The two lessons you should learn from the .com bubble are that the right idea won’t save you from bad execution, and that boom markets–especially when investors are hungry for big returns–can stay inflated longer than you think. You can be early to market, have a big share, and still end up like Netscape because Microsoft decided to take the money from under the couch cushions and destroy your revenue stream. That seems especially relevant for AI as long as model costs are high and nobody has a moat: even if you’re right on the market, if someone else can train users to expect subsidized low prices long enough you’ll run out of runway.

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Thing is that it took 10-15 years for the stocks of these companies to reach the same marketcap again.

That’s what people predicted bit, for example, on Amazon’s case it was less than 3 years because they just kept posting solid numbers. The thing which all of those companies have in common is that they stood out from the Pets.com types in having profitable revenue - they didn’t need a miracle to be profitable, only for customers to keep buying.

You’re right that many .com companies lacked fundamentals but you’re cherry-picking survivors. For every Amazon, there were dozens of Pets.coms. The current AI wave does feel different in terms of revenue traction (e.g., Cursor’s $500M ARR), but the broader lesson still applies: hype cycles don’t discriminate between good and bad execution in the short term.

Cursor’s growth is impressive, but sustained dominance isn’t guaranteed. Distribution, margins, and defensibility still matter and we haven’t seen how durable any of that is once incentives tighten and infra costs stop being subsidized.

My point in listing survivors was simply to make the point that while there were plenty of doomed businesses, there were also many giants which were big at the time and could be told apart by looking at their fundamentals — they had real people paying them money for tangible things at a price which could be profitable. Amazon famously reported low numbers due to reinvestment but they were profitable in most business segments a few years after entering, which was quite different from the “lose money on every sale, make it up on volume” plays many dotcoms made.

How does that refute the statement you quoted? I said the vast majority of companies during the bubble had no business, were run on hype dollars and had insane P/E ratios. That supports a handful of companies making it through the bloodbath, but also a cherry picked examples that neither refutes my claim or supports yours.

You said “largely” and I think that’s painting with too broad a brush. The dotcom world included a bunch of companies which are still around (or were acquired later after surviving the collapse), and it wasn’t hard to tell who those were even at the time. There was a lot of lazy boosterism and criticism painting the whole field as the same, and that was a disservice to readers who could’ve used a more thoughtful triage approach. That’s especially the case for companies like Kozmo which actually had a popular idea and had the potential to be profitable (they were in most urban markets) but made the mistake of expanding too quickly or taking on more debt than they could service.

You’re sidestepping the core point. Of course some companies had fundamentals, even Kozmo had product market fit in a narrow sense. But the broader ecosystem was bloated with capital chasing flimsy ideas, and most dot-coms had no viable path to profit. That’s not “too broad a brush”, it’s backed by the collapse itself.

Kozmo is a great case study: decent demand, terrible unit economics, and zero pricing power. They didn’t just scale too fast, they scaled a structurally unprofitable model. There was no markup, thin margins, and they held inventory without enough throughput.

Many of these companies may fail but it’s a much different environment and the path to profitability is moving a lot quicker.

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