The first real explosive Internet IPO was a company called TheGlobe.com. It was kind of a proto-social networking/message board site, and on the day it went public in 1998, its shares soared 606%. Its co-founders were briefly worth around $100 million each. They become overnight celebrities, known for their extravagant lifestyles and even their fashion choices. Of course, it all came to an end when the tech bubble collapsed. So what is the experience of a bubble collapsing and watching all of your wealth vanish actually like? On this episode, we spoke with TheGlobe.com Co-Founder and Co-CEO Stephan Paternot, about the IPO, and the moment he knew it was all coming to an end. We also discussed how he went from ultra-rich to needing help from his parents to pay the rent, and what it was like bouncing back from that psychologically.
Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Wisn't and I'm Tracy Hallaway. So, Tracy, I think you know, and I think listeners know that, at least for me, my interest in markets like really came about during the dot combo. Yes, you have brought this up a number of times, and I have to say, I love hearing the stories of you losing money during the bubble. I made a little money. I made a little money too, but I also I also lost them. But for me, like so many things, are things that I've sort of like learned or like internalized about how that markets work, like still come from more or less that period. And I think it's obvious that on some level what we're seeing now in markets, we've seen in crypto, we've seen in tech, has some pretty obvious parallels to that period. I feel like the late nineties early two thousand's tech bubble would be a good grounding for the current market situation. Uh So I envy you that experience. But the thing that interests me a lot about two thousand, when the bubble burst and all the tech stocks collapsed and all of that, is when did people actually declare like tech is over, the tech bubble has burst. This is it? Because this is a question that comes up a lot now, right, right, So it's like what is over and what is real? And one like, so obviously a year ago there were a lot of people who on paper were worth a lot more money than they are right now. But presumably, you know, people are like, well, what's the bottom? When does this bounce back? What's what? What do we? What do we? What sticks with us? Like these are all really interesting questions, and of course no one knows the answer. But you know, all of these conversations happened after the late nineties dot com bubble, and you know, I think people forget like for years no one talked about Amazon, like two thousand one through say two thousand ex or seven. It was not a particularly prominent company that people talked about, right. So this is the other thing that interests me. It's what comes out of the wreckage of a bubble bursting. Because everyone was very excited about the Internet in the late nineties, and so you saw a bunch of companies rise up to come up with some sort of internet based business model, and then it all kind of went away after the bubble burst, but some companies that did phenomenally well decades later actually emerged out of that rubble. And the question of course now is whether or not the same thing might happen. So the question is like, how how do you know it's over? What comes after that? What is it like to lose on paper? Sort of like unbelievable gobs of money, which a lot of people are going through now. So you know, obviously there were a lot of like the dot com I p o s people remember pets dot com was sort of infamous or like hundreds and tons, but like I think the real first one, the one that really caused people's attention just like, wow, this is unbelievable amount of wealth here. I don't know, do you remember the globe dot com? You know what? It rings a bell, But I'm not that familiar with it. I think it was famous for at the time being like the biggest one day pop in IPO history. Yeah, it was, I think at one time, and it was definitely like one of the first lenges, like a little bit earlier than the rest, and so it sort of had this media ac rise um and then fall. Anyway, Uh, the the fact the co founders of the company. They were like in the media and they're famous for like being really young and really rich and wearing plastic leather pants to parties, as one does when you're young and really rich, and then of course the bubble collect that's what you were doing. But I was like, oh, this is like really cool anyway, so I'm very excited. I just want to jump right into it. This is like a personal thrill for me because of course there's got me interested in markets. We're gonna be speaking with Stefan Pat don't know. He is currently the co founder and executive chairman of Slated, which is an online film finance marketplace, but also he was the co founder and co CEO of the Globe dot com. So we're going to hear some stories about what those years were like and maybe some takeaways for people today. So Stefan, thank you so much for coming on odd lots my pleasure. That's quite an intro. So let me start with like maybe an embarrassing question, And I don't know if it's an embarrassing question for me or maybe it's an embarrassing question for you, But you know, I know a lot about the Globe because I remember the surge, I remember the I p O. I remember that you and your co founder were extremely rich. I remember you're in the media. I remember the plastic pants. What I don't remember is like, and I don't even think I knew it at the time. What did the Globe do? What was the Globe? Well, you're not the only one who may have known the Globe, primarily because of its stock price. Yeah, much to my chagrin, the Globe dot com was one of the first virtual communities. So back then we didn't call the social networking. It was called virtual community. Uh. And it was a much broader idea that the Internet was new, and there was this idea that maybe people could plug in, log on and exist online and build relationships online and interact with other people online. And that was the concept of virtual community. The tools to do it hadn't been built yet, right, So chat rooms and forums and homepage building, all these basic primitives is what we needed to build um And now we take for granted today, Right, you don't think of these basic primitives and anymore. Just think you know, I'm on Facebook, I'm on TikTok, I'm on I'm on Twitter, I'm on any of these things and you know, I just upload and share and post. That's just it just works. But back then that wasn't obvious. So that's what we we created its first generation primitives for virtual community, and lo and behold, it became one of these stickiest business models we could have ever imagined. And of course, um, you know, Facebook ran with that much more successfully than us in the early two thousand's. What was the journey like from starting this virtual community to eventually, you know, listing in a public market, because that seems like, you know, it's quite an upward trajectory, So how did that work? Well, it's it was non obvious. Um So of course, looking back thirty years later, and that's terrifying to even admit that it's been that long, it all seems obvious, like this was always going to happen. But back then, no one understood what the Internet was, right. Tim Bernard Lee is one of the creators of the HTTP protocol and h t M l UM and it's something that's super fringe, running on the dark one that that's been built, and only university professors and some really geeky university students are logging onto the Worldwide Web and creating web pages, and you really could only go browse other university websites, so it was really cryptic, hard to use. You really needed to know what you were doing, and to even get started, you needed to download what was called a browser, and the first one was really Mosaic. It was a old beta version of Mosaic, which was something that Mark Andreson had created before Netscape. And it just so happens that my old college friend, best friend at the time, Todd Kreiselman, and I we downloaded Mosaic. We we found her. We we had dial up modems. I was using a fourteen four modem, he had a nineteen point to kill a bit modems, so super slow, but we both logged in and found our way into what was the first chat room we ever experienced. That's how primitive things were at the time, and startup culture wasn't typical. Not everybody was doing startups. That was very very much a Silicon Valley thing. Most people who were in university like us, were there to go get their degrees and then go and maybe become a banker, a lawyer and you know, earn your stripes that way. So for us to want to go and try to do something different and create a startup in college, let alone one in this new universe called the Internet. Was super risky. Our parents didn't understand what we were talking about, most of our professors didn't understand what we were talking about, and we just sort of had to wing it and say, look, I think Todd and I want to we think there's something there. There's this thing called the Internet. It's just beginning. There's only a few million people around the world using it, but we've stumbled on this social experiment and chat that is so addictive. We think that could be the beginning of something huge. So that's where it started. Non obvious. We were taking the path less traveled by, certainly not the safe choice that you know, most of our friends were gonna go and get jobs and earn fifty six seventy thousand a year. We were gonna go make nothing. There was no such thing as online advertising or e commerce or any way to make money. So it was going we were going into the great scary unknown with this um well before there was ever the concept of an I p O related to the Internet space. So let's talk about that I P O I think it was, which is a little bit earlier than the real man, Russ. You're a little bit earlier out of the gate than a lot of these companies. The stocks surge six six percent of Clinic to something I'm reading here, Um, it was market Camp was a little bit under a billion. What was that like? What was that day like? And how much were you worth like the day before that day? And how much were you worth that day? Well, I think for for you to fully comprehended, for your audience to fully comprehend what it felt like that day, you would have to understand that. Uh. You know, for the four years between the inception of the Globe and US going public, there was no I P O Mania. Only a few companies had gone public in this space. One of them was Yahoo. One of them was Netscape first and it sort of blew up and it became this news item. Yahoo went public and then not also became a news item. But in the short months after they've gone public, their stocks have tanked. So people were going, Okay, well, I don't we don't quite understand what this Netscape is, this Yahoo thing is. It doesn't seem to be working. Well, what is the Globe bringing to the to the table that's new or different. Well, what we were bringing to the table in four years later was this super addictive social interaction online that was capturing people's imagination. It was still at a point where the market wasn't receptive to I p O, so we didn't know that our I p O was gonna work. We were actually coming We were in a recession in the summer of the markets have come down because long term capital management had collapsed. We were running out of money and we were thinking, I don't know that we're gonna be able to go public. We're probably gonna run out of money and our business is just gonna go under and everyone will No one will ever discovered with the internet is let alone virtual community. And that's a bummer because we've just been at it for four years talking about virtual community. But by November, and it really was on Friday November, the market turned that week and suddenly there were a couple other companies that went public. Company called Fox went public, and then a couple other small dot coms went public that went up pretty quickly. And suddenly, um after having done a three week road show for our I p O and having been turned down by all the institutions that we're looking at the marks collapsing as the market turn. The phone start ringing off the hook, calling all of our bankers saying, hey, hold on, what's this thing you guys have been saying again about the Internet and virtual community, the globe dot com. We want in. And suddenly this little three million share offering we had had something like forty five million shares of demand, massively oversubscribed x UM. We didn't manage to move the price up much again because we were worried that the market would turn again and r S one filing would go stale, and that the ICHO again would never happen and we would die right there, right right, you know, at the goal line. UM, So we just we we just told the bank let's not try to mess with the price. Let's just take what we can get. And that day we were pricing at nine dollars a share, which was way down from what we had been hoping to raise earlier in our I p O process. But that um, there was enough interest, and that morning the bankers were telling us, hey, guys, the interest is climbing. Um, we're gonna go. You guys should be pricing right around eleven a m. It's nine thirty ten am, but it looks like this is going to price at thirty dollars a share, and we were like, wait, weren't we priced at nine dollars? How's it going up to twenty thirty? What's going on? Because this was very unusual. Stocks weren't popping that that way back in the day. And another half hour later, they're saying, oh, never mind, it's not gonna go at thirty dollars a share, and we're like, okay, so what is it? Nine ten eleven and they're like, no, it's actually gonna fifty to sixty dollars a share, Like okay, wait, wait, what's going on? And within another half hour, right as we're coming up to eleven o'clock, the main trader that day suddenly yells out eight seven seven and the and I just remember that hundreds of bankers on that floor at bear Sterns stood up to look where we were standing, not understanding what was going on. And it turns out our stock had run up from seven in the span of a couple of hours. And we started getting phone calls on our cell phones and people were telling us, oh my god, it's there's something on CNN and CNBC and they're talking about the globye yo and the world record, and you know, so my partner and I talked. We were like totally caught off guard. This sort of blew our minds away. It was headspinning. It was exhilarating. It was also terrifying. We didn't really know what an I p O was. We were twenty four years old, and the fact that it went out of control up a thousand percent and was all over the news was unusual. And they're telling us it's a world record I p O. Is that is that good? Well, it's good because you're all over the media. But very quickly it was like my god, you guys left so much money on the table, Like okay, well but beer Stairs didn't want to reprice this up, you know, to ten or eleven or twelve, let alone seven, So there was you know, it was it was an exhilarating, crazy day, but we knew we had a new lease on life. Our company was going to survive. Everyone was now saying, whoa what is this internet thing going on? And our I p os somehow ended up becoming this lightning rod and kicking off I p O mania right where every dot com wanted to go public and the same thing happened, and then that we just happened to us. I have so many questions, Um, I'm gonna try to fit them all in into one mega question. Okay, One, what did you do that night? Yeah? Did you go out and celebrate? Secondly, what do you think accounted for the big pop? You know, this was a sector that a lot of people were unfamiliar with. As you mentioned, there had been some I p o s that had flopped recently, So like, why did everyone suddenly come together and you know, seemingly want to have a slice of the globe dot com? And then thirdly, what was it like pricing with the bankers? Because you know you mentioned you you went public at nine dollars, it felt like you might have left money on the table. Um, how did they actually work out that number? Well, let me start with maybe this last question and then work my way backwards from there. Um, So there had been a huge amount of capital sitting on the sidelines in the market because of the recession that had kicked in. Long term capital management had unwound. Everyone was freaking out capital pull out of the markets. So there's a lot of money sitting there waiting to be deployed, and something like a hundred plus UH road shows had been canceled, so tons of companies that would ordinarily go public that year had haul pulled their I p o S were one of the last companies on the road show that refused to quit because we knew we were going to go under if we didn't raise the money. Um. The way that the pricing worked was, you know, the banks would like you to believe that there's some giant, brilliant formula behind behind all this, but all they can never really do is look at comps and what are comps based on other comps? And what are those comps based on other comps? So it's like, okay, it's basically, what are other companies similar to you in concept? What are they trading at? What's their multiple to revenue? Or in the case of Internet companies that have very little revenue, it was, well, you know, how big is your audience? You know, you guys have you know, x millions of users versus Yahoo? How do we you know? What have they valued at right now? Well? There, their stock is low, So maybe you guys shouldn't have such a high stock price either. So it was it was it's very much. It's arbitrary, and um, you know, bear Stearns had basically said to us, listen, we're gonna take you on the road show to our institutions, to the t ro prices and Jenas funds, and we think we can sell this at you know, let me think finger in the air. Um, you know, a hundred million dollar company and that would price you guys at and the numbers may be an accurate because it's been thirty years and I don't remember exactly, but you know that's at eleven to thirteen dollar a share price. And as we went onto the road and we said, okay, fine, hundred million dollar company or ninety million dollar company eleven or thirteen dollars a share. We don't have a better guess. I mean, either way, we were only generating a few million in revenue, so these multiple seem big. Who were we to complain? But as we went on the road show and the markets were crapping out and all that capital got pulled out, m everyone would take the meeting with us. They all thought the concept was I guess a little bit mind blowing. Okay, there's this thing called the Internet. There's virtual community. People are interacting with each other, okay, and no one has seen the matrix yet, right, And most people people hadn't read Neil stevenson snow Crash, right, so they couldn't really imagine a world. Will you plug into this thing called the metaverse? But there was something to our story a virtual community, right that we're not just a site online where you look up information. It's not just a magazine online. It's not a place where you just shop online. It's a place where you will build relationships and spend hours of your life, because that's what our users were doing, spending hours of their lives in chat rooms. Something about that resonated with all the institutions on the road show. But what didn't resonate with them was the markets are collapsing. You guys should stop your ip O. Didn't you notice everybody else cancel it? So we, unfortunately, after the three week road show, had no choice. The bear Sterns trying to lower the price, like, well, no one's taking it at eleven and thirteen, they're not taking it at ten, they're not taking it at nine, they're not taking it eight like okay, so no price is low enough, and eventually bear Sterns and this is just I guess their sterns where they got some of their reputation. They were like thinking that we'll we'll scoop up the whole of the globe and by the whole thing is six dollars a share, and it felt like so sharky of them to want to pull that, and we were like, no, we're not going to do that. So we held off. And it's only because the market turned around at a critical juncture where everyone was suddenly going okay, okay, okay, what are the what are the new I p o S on deck? Fox Cool? That got priced tent below their their pop so it's well priced. And then there was another little dot com called earth Web that went up a couple and I think that made everybody click and go, oh, the action is where these dot com companies are. Who's the last company we all met with that we liked the globe? So so suddenly the timing those vectors came together and Bear Stearns, you know, we then had to twist their arm to convince them, listen, move the price back up, you know, six bucks of shares insulting you know, like, okay, eight, Like, come on, that's way below our I p O price. It should have been eleven and thirteen. Okay, fine, nine, But we can't go higher or we'll lose the interest and everyone will walk and your s one's going to go stale on Monday, and it's it's it's Thursday today. So we felt we were sort of stuck between a rock and hard place. Um, they wouldn't want it. They didn't want us to interpret the forty million shares of demand is something that should require moving the price. Even though everyone on our team thought the price should move, we kept it at nine. And that's how it got set at nine. It's because of an accident in our market. Timing brought us further down. Everyone else that went public the following week and thereafter we're suddenly coming in way above their price ranges. Forget eleven to thirteen dollars, they were pricing thirty dollars a share on the you know, the same scale, And so we realized that this sort of blew everything up for everybody else. Unfortunately, we were the guinea pig. And and what's more unfortunate for us is that all of these institutions these big players that are supposedly there to own shares in your company and hold for the long haul. And the banks, you know, when they're taking on the road show, they're telling you all about their institutional clients are gonna hold your stock, and you know they're they're big buyers, buying you know, five million dollar chunks and they're gonna hold it for the long haul, that that's going to be your base. You know, very little piece of it will go to retail. But what happened is is the day of the I p O, when the stock went up a thousand percent, all these institutions that bought in at nine dollars were like, holy shit, Christmas came early, we're dumping it. So they sold all their stock to the highest bidders, which were the ones bidding all the way up to the are a lot of institutions and day traders at that time that didn't put in limit orders, so they were just buying at market, you know, at seven ninety seven, and you know, and it meant that all the institutions dumped the stock. The stock traded hands on average five times that day, so fifteen million shares and a three million share offering and it meant that the globe was left being primarily held by retail investors, people who didn't understand what was going on. You know, the institutions did extremely well, but it meant that we had a base of investors that weren't classically long long holders of stock. So sort of that that's set us up for not a good start to our our public life. And what did you do that night? Yeah, yeah, so yes, that night there was some celebration. UM. Bear in mind, the day before, two days before, we didn't know we were going public, so we didn't really have time to call up all of our friends and tell everyone, like, guys, you know, Friday night, we're gonna be celebribrating. It's very impromptu. But there was going out. Um, there was you know, some champagne or and or vodka one of my favorite nightclubs. Um. And you know, me explaining to my then very new girlfriend that something had crazy had just happened that day and she didn't really understand what the hell I was talking about. But it was a surreal evening for me and for Todd and for our company. Um. Again, we went from our company is going to go under two new lease on life and apparently we did a world record with it, so this can only mean good things. So how much was so? How much were you personally worth? How much were you and Todd? Are you personally worth at the top? And what was the deal with the plastic pants? Because, like I said, I didn't remember question. I didn't remember what the Globe dot com did, but I do remember that you were in the media for wearing plastic pants. So what do you answer? But so, yeah, that's the story fashion choices. So you know, it's like I wouldn't want to look at what I was wearing. Vinyl was big in the late nineties. It was I think I just think I just were a little too farn uh. So yeah, I mean Todd and I each had a million shares in the company. We owned ten percent of the company each, so technically at that peak day we were worth ninety seven million each. And that was sort of the headline at the time, you know, net geeks strike it rich on the cover of the New York Post and pretty much all the tabloids. Um. So, suddenly having my dorman at the building recognized and go, oh my god, congratulations, it was I felt suddenly very vulnerable that everybody knew too much. Um, but yeah, the vinyl pants that happened a year later, among all of the wonderful media coverage and celebration and growing the business and becoming somewhat of a sensational story because back then dot com whiz kids wasn't a thing, so this was sort of the beginning of that whole thing, and everyone was fascinated, like international media in particular. For them, this is a quintessential Americana dream. Not only in America can you be a young entrepreneur, a young celebrity and make it rich, And that doesn't happen in Europe. So Europeans were just fascinated with this story. You know, a dorm dorm room college startup that suddenly ends up, you know, the nexus of Wall Street worth a billion dollars like that was completely surreal to them, and it was pretty novel as well in America. But in America, you know, there was a much more entrepreneurial spirit in general, and the start up the concept of startups was not a typical um, you know, maybe a public company at twenty four was a little bit atypical. So some of the media wanted to just you know, most of the time when we were being brought into interviews, it wasn't to get into the nitty gritty of our platform. It was to be like, oh my god, what's it like being rich? If you guys bought new houses, new cars, tell us, tell us, tell us, you're getting marriage offers. It was. It was sensational, and so to a certain extent, Todd and I accepted that, like if if we've become these dot com whiz icons, Okay, let's let's just play that game. This is how we get the media coverage and drive our traffic up. Let's not be boring about it. Let's let's let's play into that fantasy. Let's explain to them this great new virtual world we've created. Let's let's act like we're the cool We're the cool kids who always knew um what they were doing and that they were ahead of their time. We didn't. But eventually, um, you know, CNN came calling and they wanted they were launching a new series camera what's called I think it's called CNN Movers, half hour documentary with jan Hopkins, and um, they wanted to follow us around. They wanted to know what what was the what was the life like of twenty four year old public company CEOs. So they are there. I made the faithful decision to let them into my life, you know, let them into our homes. That's what they wanted to do, and follow us out. They knew that I like to go out and go to a club and go dance, and they're like, can we follow you? And I said sure, Well I wasn't gonna go on CNN and just dancing jeans was I Obviously important decisions taken. You got a dance vinyl pants exactly look I mean and back then, you know, this was way before the days of you know, Elon must smoking weed on Joe Rogan and like that's just you know, typical Thursday afternoon. I was thinking, what's the most crazy thing I can do that will capture everyone's imagination and go, yes, this is the embodiment of the American dream. Well, I'll put on my vinyl pants in some tight T shirt and spike my hair with gel and we'll go to a club and I will dance on a table and make sure that there's other pretty girls dancing there, and you know, shake a bottle of champagne. I don't remember everything I did, but the cliche what is now clearly a cliche, But now, of course it's so tame, it's it's honestly like it would it wouldn't make any news anymore today because it's just not that interesting. So part of me wants to just ask questions about what it was like clubbing in the ninety nineties, because I think that would have been an interesting experience. But um, I want to ask a serious question, which was you did the I p O. You raised a bunch of money, you had fundraisings before that. What were you planning to do with all the money? Like was there actually a plan for expansion or acquisitions and things like that? Yes, uh so there wasn't. There was definitely a method to the madness, and we had raised I think a couple hundred million dollars over like quarter five six rounds of financing. It's nothing magical. It's you raise the money you need to buy more servers, hire more people, and build out your infrastructure and your team, and you know you never have enough money, right because back then it was called Netscape poin the term GDF get big fast, So it was all about spend, spend it as fast as you can, to grow as fast as you can. Everyone the only thing they cared about were eyeballs. Whoever is getting the biggest audience doesn't matter what your revenues are. Yet it doesn't matter forget profits. Just grow grow, grow, grow grow. So after our I p O and I p Omnia kicked in and all of our competitors, you know, we'd raised twenty seven million or I p O everyone else was raising sixty two hundred million, We're like, oh my god, they're outspending us in ads and servers and hiring. It became this race. And by the way, these are the parallels of every single crypto boom bust cycles. It's interesting you see that because you know, we an that Escape was of course uh founded, as you mentioned by Mark Andreas and get big Fest. We like just didn't interview like you know, now think about all the Andres and Horowitz companies. That's sort of like how many hundreds of or thousands of companies have essentially taken jeep that netscap, Netscape GBF model, and now it's like that is the thing or that is really defined tech in this modern age. Yeah, well, look, every boom bust cycle goes through that, right. But when you start off building something on really uncharted territory, no one's exciting. Everyone thinks they're crazy and they're very scared about putting money in. Right, So first you have to tell the story and build a market and get the users, and then other companies need to tag along. And eventually, when the demand is there and the excitement is there, fomo kicks in. Right. That's when all the fast followers come in, and of course investors they go through their wave as well. Right, there's the there's the laggards, and then there's the ones with the fomo. Not right in the beginning, but a little bit later, who go, oh my god, everyone's doing well with that. I got a pile in. That's where valuations go sky high. That's where the industries get built because billions of dollars flow in. But inevitably we passed keep madness and then you know, eyeballs isn't enough. We need revenues. And then revenues isn't enough. You're losing money like crazy. You know, remember Amazon, they were losing billions of dollars a year famously, and it takes a shakeout. Right, So when the bubble burst in two thousand, two thousand one. It's because there wasn't enough profits. There wasn't enough advertising dollars or e commerce, or the margins weren't big enough to sustain all of this. So the these using capital as this defensive moat to just outspend your competition. That started in the dot com era, and then it got carried through again in UM the twenty I see omnia. It also has been part of web two point oh right, just who from Uber to Lift to UM just you name it, everybody. Capital is a defensive moat became a core strategy and in notably always leads to this shakeout. So that's part. That's the bus cycle. But the beautiful thing is is we always come out of the bus cycle eventually. Right. Some of the original players who usually started before a maniac kicks in and have have been working from first principles, not from crazy had a money pouring showering down on them, but from really good first principles. Usually those players survive, some of them don't UM, but it's the ones who work from first principles who usually do the best. Then the ones that are the most disciplined and not spending their money as fast as they can, who then continue. But those who come in later at the point of FOMO, will do so much spending to catch up and try to overtake the market, they will be the first to get to implode when there's a market controversion. So can I just ask when did you actually know it was over? Or let me ask two things? Okay, One, when did you know it was over? That the bubble had burst? And then secondly, what was your first sign of real trouble? Like is there a moment or thing that you can pinpoint? Yeah? So we we for better or worse? Where the canary in the coal mine with the globe right. We were early, Um, we could see this was going to be exciting before everybody piled in. And then we could see that as everyone piled in and more and more money was getting burned by all companies, that it was becoming untenable to keep spending our way to stay ahead. And spending your money meant using some of that cash to launch huge ad campaigns, you know, hiring more staff, bigger sales teams. You're doing that, But some of the cash and your stock as a public company was to acquire more companies as well. If we can't organically grow fast enough, we will acquire companies. Then you acquire some companies, but their valuations are going up too, so you're now paying inflated prices for other small companies to try to bulk yourself up. And you name it all the major companies, Facebook, Alphabet and all that. They they bought hundreds of companies over the years that don't largely get reported, So all you really ever see is this big top line growth, But what you don't realize is what fraction of that was the original organic stuff versus all the acquisitions and then the padding and sandbagging of their numbers so that the analysts can't quite see how you're you're buying your traffic, you're buying the revenues to try to help goose your your overall top line figures. And we were having to do the same thing. We're buying more and more companies. They were helping, but not enough. And you know, a lot of there wasn't enough advertising dollars to go around for all the Internet companies, so there's a lot of barter advertising going on, which was getting accounted by a lot of companies as revenues, but it wasn't real revenues, so there's some you know, some percentages phantom revenue. And we could see that we're on the little, you know, guinea pig wheel here, running as fast as we can, and it's getting harder and harder to keep up with that wheel. We can't feed the beast fast enough. So we could see the writing on the wall here that at some point the music is gonna stop and there won't be enough chairs to go around. So we kept playing the game and doing pretty well all the way into the beginning of the two thousands. We had our best quarter ever, which I believe was like a ten million dollar quarter million dollar a year a run rate, which back then that was a big deal. But we were still losing money. But that's when my partner and I have felt like we couldn't keep up anymore. Um, the sky was gonna start, it was gonna fall, and it was gonna fall maybe on us first, and my my partner and I taught, and I we ended up resigning and bringing in a new CEO with more experience than us could. We could bring more discipline and maybe help control costs and would maybe navigate what we thought would be an upcoming storm better than us, and unfortunately, you know, even though our revenues were climbing, traffic was climbing. Uh. We could see the storm coming. My partner and I resigned, bring in the new CEO. And then months later, um, other dot com started going under. They were running out of cash, and then the stock market started to slide over the course of like mid two thousand, spring of two thousand, all the way until the beginning of two thousand one. Everything fell, so, you know, the globe. Unfortunately, we got called out early. As you know, this is exactly what's wrong with the whole Internet space. It was always a giant hoax, you know, run by these dot com kids. But two months later everyone went down. Yahoo, Amazon drops in their stock. Um. Luckily for the big players, they market consolidated under them, right, They got to buy a lot of companies up on the cheap, they got to hoard enough cash, uh, and they made it through. Yeah who obviously didn't make it through for very long after the Internet renaissance, But out of the ashes, um, you know, Amazon came back super strong, and then of course, you know, the next generation portals came along, like Google, and then eventually the next generation social networks like Facebook. Right, so there needed to be a total washout. All of the cost the costs of building dot coms needed to come down for all these new second generation web two point oh companies to sort of be borne out of and have succeeded since. So what is it like on a personal basis to go from hundred million dollars plastic pants got the model girlfriend time to live an egregious, frivolous life. Is I think you're quoted to assume something a little less egregious and frivolous, said a little less than a hundred million. I don't know what's that like? And then how do you I mean, you have a new company now, So what don't you just talk a little bit about because there's gonna be a lot of people right now going through that who were like, we're at a billion last year and now we're you know, how do you how much that process? Like, look, I went through an existential crisis when when the globe essentially folded a year later after the dot com bubble burst and the Internet went under and the media was basically like, ha ha, we told you so you know I it made me question my own sanity. Wait, what were we all crazy with what this internet thing could be? Were we crazy? What? So? What virtual community the potential it had? Maybe we were. And it took a couple more years of licking my wounds and retreating from the world. And by the way, by the end of all of this, not only did I not have ninety seven million dollars, I was a million dollars in debt because I had borrowed a million dollars against my stock to try to also bet on other dot COM's day went under, So all of a sudden, I'm retreating from the world. I had to, you know, ask my parents to help me with to keep my roof over my head. And I barely pulled through financially. And luckily, the reason I was able to pull through financially ultimately is because three or four years later, in two thousand four, the dot com world came back with a vengeance. The Internet renaissance kicked in. You know, Google appeared and then if Facebook appeared, and I was able to corral enough of my original investors who had made returns on the globe they had invested in early and sold at the I P O and made a killing, and luckily many of them said, hey, steph, whatever you do next, we're in okay. Um, well, I don't want to run another company right now. I'm like still in shell shock here. But I see a lot of other entrepreneurs now who are going and doing their second companies. So I think the Internet is really coming back. And so I created a bunch of angel funds, brought in my my angel investors alongside me, made some bets. Those companies ended up doing really well. Uh without getting through a list of all the things they did, they were part of the new fabric of Internet two point oh. And so that got me back in the game and rebuilt my confidence as as an investor and as somebody who understood the market well enough to see what good products might disrupt the world. Um, but you know, look, it's to be honest, my confidence was really shaken as a CEO, and as you know, had hitting such a flying that close to the sun and having my wings melt. It took me ten fifteen years to really want to to really consider getting back in the CEO set. And just on that note, I mean, when you when you look at what's happening in markets, right now. I mean like the nasdact down. I think so far this year crypto crashing, people talking about a crypto winter. What do you think is happening here? Is it? Is it the tech bubble all over again? Or is there something different about this cycle? Nope, it's the same game, new players. It's the same game. Uh. And it's it's It's quite obvious. And by the way, when I had my doubts and I went lived, I got into bitcoin back when it was at Mount Cox at sixty dollars a bitcoin um and I appreciate, enjoyed watching it go from sixty to six and thought to myself, well, Jesus six d I better sell it now. And then it only went up further, so I bought back in and then it only crashed. So I realized, Okay, me trying to time the market and figure out you know, mass investor psychology, uh is not working. So what I'm gonna do here is go to first principles. Is this a long hold? Is the promise of bitcoin or really brought more broadly, blockchain, does it really have the potential to change the world? And my feeling was yeah, but this is actually more like the dot com bubble before one point oh. This is like the laying down of DARPA net. This is like before people all get dial up modems and before all of the great utilities of the Internet appeared. Right, this is laying down the fabric of of the of web. What is web three point oh now? And so I'm gonna be a long halt. And it's once I stopped trying to bet the market and repeat people's minds and tea leaves about buying and selling that I started to do really well. And I went through the first bubble and crypto winter, and then the second, and then the third. And it's in the third I c omania where I was like, there's this other thing called Ethereum World computer. I'm all in on that, and it's the same thing. It went all the way up, then came crashing all the way down, just kept holding. And if you look at the four or five major bubbles and crypto winters on a log arrhythmic scale, they keep moving up another order of magnitude higher each time. And yes, because there's a huge amount of speculation and there's a huge amount of huge amount of capital and fomo and people growing money at bad blockchain concepts and bad level one or bad level two or god knows, God knows what other ponzi schemes out there. But that's what had to happen with the Internet to begin with. Until you got to Internet two point oh, you could truly say Internet two point oh was where the world discovered the real value of the Internet. It just became hyper centralized. Well, we're still most of the world hasn't even dipped their toe in yet to crypto. Right, it's all been about the currency, not the utility. The utility it's all started and focused on the lego blocks, the building lego blocks of the financial systems you defy, right, And then it started to find a broader utility with n f t s, but again very gimmicky like you know, board eight board apes and yacht clubs and god knows what that that's cool for capturing people's imagination, but that's not the true unlocking of the broader utility of what blockchain can do. That will come later. So it's a ten to twenty year play before the world will discover the true utility with a staying power um and that will become Web three and I am beyond bullish despite seeing my crypto networth plump plummet. No problem. I haven't been buying into it because of Fomo. I've been in it since the beginning and it's still early, early early days. Imagine people panicking after Internet one point, oh bubble burst and dumping their Amazon stock. Right there, We're dumping their Apple stock right there. Oh, it's all going under. It's all a fat well. You would have missed out on one of the greatest returns you could have ever had in the history of investments with Amazon, So you got you gotta sit tight. Stefan Patterne. Honestly a real pleasure, in a real sort of thrill to chat with you and some incredible lessons. I actually like we hit we should we should have you back. I think, you know, we could talk for like two more hours about so many like here you talking about capital markets and that process was fascinating. You can talk longer just about like the period of be ingregiously rich. I'm talking about there's so much more. Thank you so much for coming on, Odd Lodge. I thought there shows like a real treat and some like extremely interesting perspective on the Internet and what's happening now in market. So that was fantastic. I love that. I love that conversation. There were so many interesting things, you know. I was just looking at the Globes chart, you know, which was crazy. Yeah, but it's crazy that you can still actually call that up because I think it turned into so if you have a terminal, you can look at the Globe dot com. I think it turned into like a shell company. Yeah, and I think they were like doing voipe stuff for a while. But what's crazy, And Jim Channo has talked about this in a recent episode, like how tiny it was because like you know, he had his beak, it was like a hundred million. The company itself never was worth a billion. And then of course last year with like the Spacks, we'd have these like fort intollar companies that didn't do it. It's crazy how small the numbers. The other thing that struck me about that conversation was when he was talking about get big fast, Yeah, and it does feel like a lot of startups have internalized that motto and you kind of wonder if it's ever going to go away, or if like just raising as much money as you can to get market share as quickly as possible expand as quickly as possible if that's just the standard forever and the market injuries and through line the fact that start that model like started Netscape and now purveys through entrees and Horowitz. It's really interesting also that the not just the get big fast, but the cycle and how the late players entered the game have to spend even more and so it creates this race. And then to hear him describe how an early two thousand, the sort of like hamster wheel is on, it's like we can't We're spending so much money and it's just like the marginal value of those acquisition dollars or growing traffic starts to decline. Like I think serious lessons for like thinking about things that upen during this second but also the realization that he described about having to bring in a new CEO and someone who could actually instill a capital discipline and maybe have like a bit more of a strategy around finances, because it feels like with a lot of these startups by you know, I don't want to call him a tech bro, but you know, technology brother, technology brother, it feels like technology brother and sisters. It feels like what you need to start something up successfully. Sorry, in a garage and like developed new technology may not be exactly what you need to run a multi billion dollar company, right, Yeah, No, it's so much stuff. I love that. We gotta have him back. Yeah, all right, should we leave it that? Let's leave it there. Okay. This has been another episode of the All Thoughts podcast. I'm Tracy Alloway. You can follow me on Twitter at Tracy Alloway. And I'm Joe Wisenthal. You can follow me on Twitter at the Stalwart. Follow our guests Defawn Pattern on Twitter, He's at Stefan Pattern, and check out his book All About This, a very public offering the story of the Globe dot Com in the first Internet Revolution. Follow our producer Carmen Rodriguez at Carmen Arman, and check out all of our podcasts at Bloomberg under the handle at podcasts. Thanks for listening.