I am a principal owner of a small, mid-western, slow-growth consulting company founded in 1991 by a couple of librarians. We are quite definitely a not.com.

However, our expertise in information architecture design for complex web sites served as a passenger ticket to last year's wild and wacky party onboard the Dot.Com Express.

In our unique role as conservative consultants to some of the world's most risk-loving new economy clients, we were privileged to see the inner workings of the dot.coms during the high-speed transition from irrational exuberance to outright panic.

Once Upon A Time

It was December 1999, and I was in Boston to speak at a Web Design conference. As we left the airport, my taxi driver and I struck up a conversation which he soon steered toward the topic of high-tech investing. By the time I escaped his cab, he had rep eatedly berated me for my reluctance to invest in individual dot.com stocks. I think he actually used the term "wimpy." I should have known then, that it was the beginning of the end.

Over the next several months, we were swept up into the ultimate feeding frenzy, compliments of the dot.com stock market. These were the New Economy days, when P/E ratios, Alan Greenspan, and the concept of risk were inconsequential annoyances left over from the old economy.

Like most other Internet consulting firms, we couldn't hire enough people to satisfy the demand for our services. That was the good news. The bad news was that everyone was living on Internet time.

Our Fortune 500 and dot.com clients alike were intoxicated by high-tech glamour and the need for speed. They wanted flash animation, personalization, collaborative filtering, and automated classification. This was not a great time to be selling the valu e of long-term investments in information infrastructure. In a daytrading world, why worry about next year? We compromised, giving them a balance of "quick-hit" and "medium-term" recommendations.

Great Balls of Fire

A defining characteristic of the information age is that a huge number of people all around the world have almost instant access to the same information at the same time.

Equally important, these people can act based on that information, instantaneously and all at the same time. Microsoft misses earning estimates and the NASDAQ drops within minutes. Greenspan winks and the market soars.

In this age of high-velocity action and reaction, there is a perception of increasingly rapid progress. However, most measures suggest the opposite. Innovation and productivity growth were significantly lower from 1950 to 2000 than from 1900 to 1950. F rom engineering to medicine to education, we have been getting more and more excited over smaller and smaller improvements. This brings to my mind a rather odd metaphor, which I hope to implant in yours.

Picture a long, dark tunnel with a light at the far end. Imagine a number of sheep in the tunnel. They are shuffling slowly forward through the tunnel. Suddenly, they begin moving from side to side, flying through the air and bouncing off the walls at almost the speed of light. Every few seconds, a sheep or two explodes into a brilliant ball of fire. It's a fascinating spectacle but smells really bad. This is how I see the past year's dot.com experience. Tremendous activity. Little progress. Lots of pain and suffering.

So, What Have We Learned?

As a society, over the long-term, we haven't learned anything. Sometime in the not-too-distant future, there will be a new scientific or technological breakthrough. Entrepreneurs, venture capitalists, politicians, and billionaire business executives wil l get things moving. The media will whip the general populace into a frenzy, and another Ponzi scheme will be underway.

The real learning happens at the intersection of an industry and a generation. Those who have lived at the epicenter of the dot.com crash will never forget the feeling of losing their jobs, their homes, their sleep, and their dreams. There is a sadness here that comes with any loss of innocence. But there is also the confidence and hope that comes with maturity.

As we emerge from the ashes during 2001, we will begin to see signs that the Internet industry has come of age. Companies will make intelligent long-term investments in their web sites and intranets, finding ways to improve customer service, increase rev enues, and reduce costs. They will shift emphasis from how fast to how long will it last, designing flexible, scalable sites with life spans measured in years not months.

Most web designers, programmers, and information architects will find stable employment, recognizing the connection between profits and paychecks.

And a small cadre of adrenalin junkies will bide their time, waiting for the next Big Thing. At this point, I'm not sure whether that's depressing or inspiring. After all, exuberance is exuberance, even if it's irrational. You might think about it some time, when you're lying in bed, counting sheep.

End Notes

Have you seen any exploding sheep?

Please send your rants and raves to Peter Morville.

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