IT Experts: Repeat of Dot-Com Bubble Burst Unlikely

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Dot-com Bubble BurstThe dot-com bubble burst of the late 1990’s to 2000 is unlikely to
happen again in the foreseeable future, according to some IT industry
experts.
       
“I don’t see another bust as being imminent,” said Harvey Bass, CEO of Stascom Technologies, an IT executive recruitment firm based in Lake Hopatcong, NJ. “In the late 90’s, venture capital firms weren’t wise to the problem of investing in dot-com startups.” Bass added that most new startups today are underfunded and often fail before they have a significant impact on the marketplace or economy. “They rarely get lent money, so these days they fail quietly and go away,” he said. As the head of a technology recruitment firm, Bass said he frequently advises clients and candidates to shy away from investing—either personally or professionally in IT start ups.     
       
With interest rates at historic lows at the time and the exponential growth of the Internet, creative, tech savvy and creative entrepreneurs coupled with cash-friendly Venture Capitalists launched hundreds of thousands of Web-based companies known as dot-com businesses between 1997 and 2000. Nearly all of them, about 90 percent, came crashing down a few years later in what is now commonly known as the dot-com bubble bust.  
           
Another small business and industry expert agreed with Bass, yet took the notion of a bubble bust a step further.  “There are many bubbles looming and the tech start up scene isn’t thinking big enough,” said Steven Boughton, president of Great Turning Advisors, a business accelerator for entrepreneurs based in Randolph, NJ. “Tech might be part of the solution to today’s problem, but people care more about seeing their values expressed in the economy,” he said. “They want to be sure business is doing the right thing.”

Boughton added the dot-com and social media ages brought people closer together and gave billions of people access to unlimited information. “The question on most people’s mind is: now what?” he said.
        
Lastly, during the period leading up to the dot.com bust, venture capitalists and angel investors eagerly invested in tech start ups—especially those headed by former IT employees who decided to become entrepreneurs armed with well developed business plans. The trend was short-lived and is virtually non-existent today.  “Venture capitalists are following the trends instead of setting them and they’re not lending money to startups,” Boughton concluded.