FP Passport reminds us a bit about what was happening in the world the last time the stock market was this low.
I have a pretty good frame of reference for that time: I just turned 19, I was finishing high school and started university in 1997.
One big difference between then and now is how we use computers. I remember going to a university orientation session in February or March, asking if I’d need to bring one and the reps looked at me like it was a dumb question: “Uh, not really… Some people do. But there are plenty of stations to use in the computer labs.” I used one of those labs when I got there in September to set up my first email address. Also, my first year in residence was the year my school introduced broadband internet for students.
Some other things that come to mind:
- Google didn’t exist yet as a company (the domain google.com was registered in September 1997)
- almost nobody had any clue what an MP3 was; Napster was born in 1999 and the only people sharing music were FTP geeks
- the Motorola StarTac was the hot cell phone (the Nokia 5100 series that really opened up the non-business market – with ring tones and games — wasn’t introduced until 1998)
Personally, I was pretty music-oriented back then. Looking back, it doesn’t seem like a great time for straightforward rock music. We were in sort of a post-grunge burnout I guess: “Electronica” was the buzz word with groups like Chemical Brothers and Prodigy getting onto mainstream (formerly known as “alternative”) rock radio… Radiohead was just becoming the Radiohead we know them as today. They released OK Computer in 1997 and still weren’t too big to play London Ontario’s Centennial Hall in August… Billboard’s top 5 albums of 2007 included Spice Girls and the Space Jam Soundtrack… (and some hit singles that really annoyed the bejeezuz out of everyone)… Hip hop was still exploding and got a lot of attention from the East-West coastal feud. In April, fans of Biggie were still mourning his March death. Puff Daddy became a suburban household name in the album that followed…
Something else. Everybody was wearing friggin Tommy Hilfiger clothes, which drove me nuts (I was into bowling shirts, cross trainers, and ironic goodwill items) — but seems like nothing compared to the more 00′s luxe boom that sent everyone shopping for Louis Vuitton and Burberry.
Which brings us back to the economy…
Everyone was already conceiving themselves as an “investor” – buying mutual funds, etc – but the dotcom boom that turned ordinary working people into stock speculators was just starting. By 1999 it was common to hear mechanics and dental assistants bragging about making tens of thousands of dollars on stocks they paid pennies for — “It’s so easy! It’s the internet! You’re stupid not to!”
Even after the dotcom crash in 2000, we didn’t learn from our ”irrational exuberence.” People simply became irrationally exuberant about other stuff: real estate, hedge funds, and other more complex schemes enabled by the speed and sophistication of better technology. Economists like Robert Shiller are saying as late as 2007 we were still in the same boom (or at least the same “boom mentality”) that started in the 1990′s.
In the process we seem to have what amounts to a mainstream cult of wealth that we didn’t have 12 years ago. It’s been all about appearances and desire, and a lot of it is just going to evaporate and leave nothing left.
For example, Motorola struggled to shift from their utilitarian mindset about mobile technology to Nokia’s way — and later companies like Samsung and Apple – that appreciated the importance of consumer desire, rather than practical need.
I worked in wireless retail between 2000 and 2006 (or from the Nokia 5190 to the Motorola RAZR). When cameras first came out it took a year or two before I talked to one customer who could actually articulate why they wanted a camera on their phone. Companies were in an arms race of features that customers didn’t necessarily want or need — at least not until they were available and other people had them.
In 2005, one memorable customer complained that none of our free phones had cameras; he didn’t want to pay $50 for a camera phone when other phones — that were just as good, as phones — cost $0. So I asked him why he wanted a camera on his phone. He responded like it was a stupid question: “Well, if it’s available I want it, obviously.”
Along the way our economy has generated some incredible new stuff: Google and everything about it, digital music, social networking, rich mobile communications; and we’re still creating great new stuff that actually works as an investment by making us more productive, helping us create even more great new stuff.
But there’s also a lot of mere sparkle and fluff or hot air that we can’t keep from fading or blowing away…
This is the big cultural change I think we’ll see in the next couple of years. We’re going to start looking at how we spend (not just our money, but our time and attention) to make sure we’re investing it to become more generative and meaningful — not just because “if it’s available we want it.”
Oh, and one more thing I remember pretty clearly from April 1997: my first legal-drinking-age case of Labatt’s cost $28.65…
