People making the same mistake as 1999 with the Internet Economy

There was an attempt by Flipkart to take over Myntra, which was turned down. This is nothing compared to what is happening in the US or A. Absolutely mind boggling valuation of $ 19 Billion for a company which would not be valued at even $ 100 million by traditional valuing metrics — I’m talking about Facebook takeover of WhatsApp.

1999 Internet bubble

But Indian story is more poignant to us. In an ecosystem with so many players, some with deep pockets (like Junglee by Amazon), you think taking over a company is going to help you with consolidating the market. Who knows what happen. People are selling shoes over the internet — because they don’t like shopping.

This was the same story in 1999 — the internet will grow big because people will shop from their PCs and brick and cement stores are going to close. But people like shopping. The nerds writing the code there may not, but if they just go over and ask the designers who are building their websites, they will find out that trying out a shoe online is just not fun.

1999 internet bubble
Certainly there ARE people who don’t like to go out to shop. Also there are things which are best bought over the internet — cheap electronic items like headphones or condom packs. But other than that, the sales or future outlook don’t justify the valuations.

Would there be a market for online stores?

Sure, there would be the odd Amazon or Google which pay over far more than their values, but those would be few and far between. Even hedging the risks by buying in all the internet shopping portals wouldn’t pay. And yet, people — like 1999 — are going after the fad.

You as a programmer, should try to get experience of a startup, valuable experience. But don’t try to start your own company unless you have a valuable proposition, that wouldn’t blow up when this who fashion gets changed for something new — or dull.