This is a line my friend Jerry Colonna uses when something like the AT&T – Time Warner deal occurs. As time passes, the line has shifted to “We were right – just fifteen years early.”
Jerry was Fred Wilson‘s partner at Flatiron Partners. We were all investing in Internet-related stuff at the end of the 1990s. Jerry and Fred had one of the most successful VC funds during this time period until the Internet bubble burst and blew us all up for a while. We made plenty of investments together and I sat on a number of boards with Jerry – we had some big winners and a handful of craters in the ground.
At the peak, AOL bought Time Warner for $162 billion. We only know that was the peak in hindsight – at the time it looked like it validated a lot of what we were doing by investing in the Internet.
“This merger will launch the next Internet revolution,” said Steve Case, America Online’s chairman and chief executive, told a news conference Monday. “We’re still just scratching the surface.”
The market responded according to plan.
“Analysts expect competing Internet and entertainment companies to seek similar deals in hopes of keeping pace with AOL and Time Warner, and some of those stocks also got a lift Monday. Disney jumped $4.81 1/4 to $35.93 3/4 and News Corp. rose $7.31 1/4 to 45.06 1/4 on the NYSE. Lycos leaped $9 to $79.75 and Yahoo! climbed $28.81 1/4 to $436.06 1/4 on the Nasdaq Stock Market.”
Yup – you saw that correctly, Yahoo was at $436 / share. I think it split 2:1 twice, which would have made it priced at $109 / share. It’s currently at $42 / share so if I got the splits right, after its collapse in 2001 to a low of around $5 / share it took it 15 years to claw its way back to $42 / share (a 10x from the low, 40% of its high at the peak.)
Ponder Gartner’s Hype Cycle for a moment. You can apply this to pretty much anything in tech.
2000 was the Peak of Inflated Expectations. 2002 was the Trough of Disillusionment.
Now, choose any new and exciting technology now. Apply Gartner’s Hype Cycle to it. Ponder where you end up.
Steve Case wrote a book earlier this year called The Third Wave: An Entrepreneur’s Vision of the Future. In addition to looking forward to the future, Steve uses his lessons from the past to explore how things play out. It spans the time frame from 1985 – 2015 which you can just lay down on the Gartner Hype Cycle.
In the context of this, the AT&T – Time Warner deal seems extremely well timed and relevant. Now it’s all about execution.
Consider any of Apple / Google / GM / Ford buying Tesla. Where does that fall on Gartner’s Curve? How about the auto industry. Or drones. Or what people are currently calling AI. Or – well – keep going.
One of the biggest challenges in tech is not being right. It’s being ten or fifteen years too early.
I’ve been reading a bunch of history lately. So I was psyched to see a long post titled Never trust a corporation to do a library’s job highlighting some of the amazing stuff that the Internet Archive has done with the Wayback Machine and its other properties including the Live Music Archive and their Software Collection.
So – I decided to go down a website memory lane trip for Intensity Ventures (my personal investment company), SOFTBANK Technology Ventures (my first VC firm), and Flatiron Partners (Fred Wilson and Jerry Colonna’s first VC firm, which was an affiliate of SOFTBANK). As a special bonus, I was the webmaster for Intensity Ventures and SOFTBANK Venture Capital (for at least the first few years.)
Let’s start with Intensity Ventures on 12/23/96 (the first entry in the Wayback Machine). The URL is www.feld.com (just like site for the page you are currently on) – I’ve owned the feld.com domain since 3/2/95, although apparently I have to get Seth Levine’s permission to change things now. Here’s the home page.
If you want to play around, just click on the image above and then start exploring from within the Wayback Machine. For example, take a look at the Companies page.
Ok – time to move forward in time to 12/5/98, the first time the Wayback Machine grabbed a copy of the SOFTBANK Venture Capital page which at the time was called SOFTBANK Technology Ventures. Note the four partners and the various office addresses, including mine in Eldorado Springs, Colorado.
If you want a little more SOFTBANK Technology Ventures, take a look at the Partners page.
You’ll note a few extra partners here. Ron Fisher, who at the time was Vice Chairman of SOFTBANK Holdings was responsible for watching over us for SOFTBANK. Ron is one of my favorite people on the planet and has been an incredible mentor for me. Any time he calls me about anything, I make sure I do everything I can to help make sure it happens.
You’ll also notice Flatiron Partners on the list. At the time, it was jointly funded by SOFTBANK and Chase. Fred Wilson and Jerry Colonna owned the firm but SOFTBANK and Chase were their LPs, they were an extended part of the SOFTBANK team, and we were an extended part of their team. There is a ton of history here that’s good basis for longer blog posts at some point, but for now I’ll leave you with the Flatiron Partners website from 3/29/98 along with a special bonus link to the Flatiron Partners 1996 Holiday Card.
It’s always useful to remember that humans can modify their view of history, but the Internet never forgets.