My uncle got rich in the dot com bubble
Writer Colette Shade examines the frenzy of the early internet and San Francisco culture at the turn of the millennium
Hi everyone, today we have a break in regularly scheduled programming to bring you a book excerpt from Colette Shade, whose fantastic book Y2K How the 2000s Became Everything (Essays on the Future That Never Was) came out today!
The book is a brilliant and entertaining exploration into how the early 2000s forever changed us and the world we live in. You can read a full essay from the book below titled, “Only Shooting Stars Break the Mold.” It’s all about the dot com bubble, the early days of San Francisco tech, and the promise (and ultimate failure?) of the internet.
Almost every summer we took the same flight: United Airlines nonstop, Dulles to SFO. I chewed water- melon Bubblicious to keep my ears from popping, but they always did as we descended over the bay. It was an unusually steep descent, and as the flight attendants put up the tray tables babies began, inevitably, to cry. I wanted to cry, too, but instead I chomped and chomped, watching the water glitter into view. Soon, I told myself, we would be in the place that I called paradise.
Uncle Paul was my mom’s older brother, and he lived in the Bay Area with his wife, Aunt Caroline. When I was younger they lived in Los Gatos, a sleepy town in the southern part of Silicon Valley with a bunch of notable residents—most important, Steve Wozniak, the less-famous cofounder of Apple. Los Gatos consisted of a valley and dry Mediterranean hills where sequoias and eucalyptus and almond trees grew. Uncle Paul and Aunt Caroline lived in those hills, in a yellow stucco house with a red tile roof and a big sloped yard full of secret paths and bottlebrush trees.
I ran through those paths barefoot until I got a sequoia needle splinter in the arch of my foot.
In 1996 Uncle Paul and Aunt Caroline sold their Los Gatos house for an apartment in San Francisco, on the top of Telegraph Hill. From the living room window you could see the Bay Bridge. Every evening the fog would roll in along the Embarcadero, and you could see it roll out the next day while you ate your cereal on the balcony. At night the cables on the Bay Bridge lit up like strings of pearls. You never needed a coat but you always needed a fleece.
Even then I understood that San Francisco was where it was all happening. It was California, yes, and therefore inherently special due to its comfortable climate and semitropical flora, plus the fact that you had to sit on a plane for nearly six hours to get there. But more important it was the headquarters of the internet. And the internet was where Uncle Paul worked.
His was a typical arc for a certain type of white middle-class boomer. He skipped two grades in school and got into Stanford at sixteen. At one point, Philip Zimbardo (of Stanford Prison Experiment fame) was his faculty dorm resident. But after a couple semesters Uncle Paul got bored. He got into smoking weed and experimenting with psychedelics.
He dropped out and lived in a van. He enrolled in an alternative college with no grades or majors to study music and two semesters of computer science. He learned to sail and took up aikido. He and a friend tried to navigate a sailboat from Georgetown, Guyana to Miami, but ended up wrecking it in the Windward Islands. My uncle emptied his savings to buy a plane ticket home. After graduation, he toured the Pacific Northwest with his Americana band in between working odd jobs.
Eventually, Paul got sick of the bohemian life. So, like former yippie Jerry Rubin, my uncle put on a suit, got a haircut, trimmed his beard, and got a job at Intel when it was a new company and he could get stock options. He began referring to himself as “a born-again capitalist.” He moved up the corporate ladder. He bought a house and a convertible and took foreign vacations and managed his 401(k). He kept sailing and practicing aikido. And then he got into startup investing.
On August 6, 1991—Just a few months before the dissolution of the Soviet Union—the first website went live on the brand-new World Wide Web. It was published by a British computer scien-tist name Tim Berners-Lee at CERN, the European Organization for Nuclear Research in Switzerland. Berners-Lee’s site explained what the World Wide Web was and how it worked, from HTML to URLs to hyperlinks. There were ten websites online the next year, and by 1994 this number had multiplied to three thousand.
But it was in 1995 when the internet inflection point truly arrived, even though only 36 percent of American households that year owned a personal computer. On August 9 (the same day Jerry Garcia died), the computer services company Netscape Communications had its initial public offering on NASDAQ following the successful debut of its web browser Netscape Navigator. Netscape hadn’t made a profit yet, but by the closing bell, the company was worth $58.25 a share, with a market value of $2.9 billion.
“It was the spark that touched off the Internet boom,” wrote Adam Lashinsky of the Netscape IPO. “More than any other company, [Netscape] set the technological, social, and financial tone of the Internet age. Its founders, Marc Andreessen and Jim Clark—a baby-faced twenty-four-year-old programmer from the Midwest and a restless middle-aged tech pioneer who badly wanted to strike gold again—inspired a generation of entrepreneurs to try to become tech millionaires.”
And inspire they did. The late ’90s gave us eBay, Netflix (then a mail-order DVD rental service), PayPal, and Google. Amazon went public (though it was still primarily an online bookseller).
These companies all seemed to be led by earnest, bootstrapping nerds and/or former hippies, a majority of whom were somehow affiliated with Stanford. People, in other words, like Uncle Paul.
By 1998, the dot-com sector was in a frenzy. It seemed like everyone—in the Bay Area especially—was trying to get a piece of the action.
That year, online pet goods retailer Pets.com was founded. In 1999, the company was bolstered by an infusion of startup capital from Amazon, which obtained a 50 percent ownership stake. That November, Pets.com sponsored a float in the Macy’s Thanksgiving Day Parade: a thirty-six-foot-tall balloon version of their mascot, a talking dog sock puppet. In January 2000 the company spent $1.2 million on a Super Bowl ad to drum up excitement about their impending February IPO. The dog mascot was voiced by comedian Michael Ian Black.
The dot-coms kept coming. There was Webvan (an online grocery delivery website), eToys (a web-based toy retailer), and Flooz (a website that sold noncash tokens that could be used at participating retailers like Tower Records). Former US surgeon general C. Everett Koop founded drkoop.com, which made $88.5 million at its June 1999 IPO and quickly became the number-one- ranked health care information site on the internet. Profits spilled over from tech into other ventures: CGI animation pioneers Pixar Studios, cosmetics company Urban Decay (famous for their bold, metallic nail polishes and eyeshadows), and the educational chil- dren’s books company Klutz Press (famous for teaching kids to juggle and Hacky Sack in appropriate Bay Area fashion).
THE INTERNET CAME to my house in 1995 (we were among the 36 percent minority of computer-owning American households that year). One Friday night when I was in second grade (follow- ing our weekly viewing of Kevin Sorbo’s Hercules and its spin-off series Xena: Warrior Princess) my mom brought me over to the computer.
“Let’s go on the internet,” she said.
“What’s the internet?” I asked.
“It’s a new way to get all kinds of information from around the
world on your computer,” she explained.
What information, I wondered, could I possibly need as a
seven-year-old?
“We’ll use our phone to connect to the World Wide Web,” she
added.
If this statement was intended to clarify, it had the opposite
effect.
“Look,” she said, clicking the CompuServe icon.
A window popped up. She clicked the button that said SIGN ON. There was a dial tone, followed by what sounded like some- one pressing buttons on a phone. There were some terrible beeps and screeches and static, followed by more beeps and static. I covered my ears.
When we were finished logging on, she typed www.yahoo.com into the bar at the top of the screen.
“Pick a topic,” she said. “Any topic.” “Maybe Xena,” I said.
She typed “xena warrior princess” into the Yahoo search bar, and we waited. A list of bullet-pointed blue hyperlinks loaded on the screen. She clicked one. The computer whirred, and a bright yellow page with purple text began to load. ALEX’S XENA FAN- PAGE, it read. Below, a photo of the princess warrior herself be- gan to blink into view, line by line. I clicked through the website’s sections: News, Photos, About Me. After a while, my mom said,
“I think that’s enough internet for tonight,” and logged me off. I had to admit, it was cool that I could look at pictures of Xena whenever I wanted.
As the dot-com bubble inflated, I spent more and more time online. Back then, with dial-up, you actually had to log on. I’m going online, people would say. I’m surfing the web. And then you would sit, as I had, through that thirty-second cacophony. If a parent or a sibling picked up the phone, you’d be immediately booted off.
“Hang up!” you’d yell. “I’m on the internet!”
I loved sending emails. I would write to my uncle in California, my cousin in Canada, my friend in Pittsburgh. I went in chat rooms sometimes, where I met kids from Texas and Oregon and England. I visited Beanie Babies fan sites and Pokémon forums. I perused the clothes on limitedtoo.com.
For a school project on the geography and culture of Japan, I used the internet for research, listing websites alongside books in my bibliography. By middle school, I was spending hours each day on AOL Instant Messenger, talking to my friends about boys or homework or what was on TV (often, I had MTV going while I was logged on, and I would provide commentary about each music video as it aired). It was AIM, more than anything, that got me excited about being online. It made me feel like I lived in the future.
IN 1999, WHEN I was in sixth grade, Nokia bought one of Uncle Paul’s startups for $57 million.* That year for Christmas, he gave my brother and me $100,000† each of blue-chip Nokia stock. From a gift bag we produced two brown hats embroidered with the name of the company he sold. (*Over $106 million in 2024 money †Over $187,000 in 2024 money)
“Oh,” I said. My brother directed his attention back to his new Playmobil set.
“There’s something else in there, too,” my mom said with a smirk. I fished around beneath the blue tissue and produced two pieces of paper. I saw our full legal names, and then I saw the number. “Oh my GOD,” I screamed, jumping up and down.
“That’s a lot of zeros,” my dad said.
At five, the significance of this moment was lost on my brother. Even the number meant nothing to him; he could only count to one hundred and he couldn’t read yet. He returned again to Playmobil. But I felt my entire world rearranging. I thought of all the things $100,000 could buy: CDs, Pokémon cards, candy, inflatable furniture.
My parents had other ideas. It was deposited into my T. Rowe Price college fund to pay, they suggested, for Stanford. That wasn’t the only place they wanted me to go: they showed me, too, the campuses of UVA and Georgetown; they suggested William and Mary, Reed, Amherst, and Berklee College of Music. But I specifically remember driving by Stanford’s Palo Alto campus, with its matching red roofs and red-tailed hawks, my mom telling me that one day, maybe, I’d go there, too.
Her logic made sense. I loved Uncle Paul, and he seemed like he had life all figured out. My idol Chelsea Clinton went to Stanford, as did this new golfer Tiger Woods who broke all the records.
Stanford was where this new search engine called Google was invented, which my mom told me was the best one yet because, unlike Yahoo! or Ask Jeeves or Lycos, it used complex algorithms to give users better results. If I could afford it and if I could get in, why would I go anywhere else?
UNCLE PAUL RANG in the millennium in Bora Bora with his wife and a group of their tech friends. His friends took ecstasy under the Milky Way as the year 2000 arrived. He retired at age forty five, then took Aunt Caroline on long trips to Italy and Greece and London. He got multiple black belts in aikido. He went to art school. He was in talks with another guy about going halfsies on a private jet. He bought a second home in Sarasota, an eight-bedroom waterfront mansion that Aunt Caroline filled with antiques. The grown-ups were right, I thought. The new millennium really would change everything. If the internet could make Uncle Paul rich, the same thing must be happening to everyone.
These thoughts were not just the inferences of a child. Adults in positions of power were saying stuff like this in the media all the time.
“The US economy likely will not see a recession for years to come,” said economist and MIT professor Rudi Dornbusch in 1998. “We don’t want one, we don’t need one, and, as we have the tools to keep the current expansion going, we won’t have one. This expansion will run forever.”
You see, insisted Dornbusch, if we just think positively, we can change how the economy works with our minds.
George Gilder—a prolific author, conservative think tank affiliate, and Forbes contributor whose arguments against welfare and economic regulation influenced the policies of Ronald Reagan and Bill Clinton—refashioned himself in the ’90s as a New Economy tech booster. In his 1989 book Microcosm: The Quantum Revolution in Economics and Technology—a book about “the overthrow of matter”—Gilder argues that silicon chips would allow humans to transcend the laws of physics, that “the powers of mind are everywhere ascendent over the brute force of things.”
There were books like Dow 36,000: The New Strategy for Profit- ing from the Coming Rise in the Stock Market, which argued that the Dow would reach 36,000 within three to five years, and that people who purchased blue-chip stocks could expect 300 percent returns on their investments. When the Dow crossed 10,000 for the first time ever on March 29, 1999, traders passed out hats on the floor that said Dow 10,000. New York City Mayor Rudy Giuliani and NYSE Chairman Richard Grasso wore them when they rang the closing bell. “1999 Goes into the Record Book on Wall Street,” reads an L.A. Times headline from January 1, 2000. It seemed like the stock market would keep going up forever and ever, and everyone would be rich if they could just get in on the action.
Some commentators had a more critical take, but they could be handily dismissed as losers and spoilsports. “The Californian Ideology,” a 1995 essay by British theorists Richard Barbrook and Andy Cameron, falls into this category. It predicted the fervor of the dot-com economy when it was just beginning, along with many problems familiar to just about anyone living in the twenty- first century who isn’t a tech billionaire.
“In American folklore, the nation was built out of a wilderness by free-booting individuals—the trappers, cowboys, preachers, and settlers of the frontier,” they write. “For both the New Left and the New Right, the early years of the American republic provide a potent model for their rival versions of individual freedom. Yet there is a profound contradiction at the centre of this primordial American dream: individuals in this period only prospered through the suffering of others.”
You know this old saw already: the racist, sexist, imperialist myth of the frontier. But it bears repeating, not only because it is true, but because less widely understood is the way that, at the turn of the last millennium, technology and the stock market were the frontier. And the promise of the frontier, of any frontier, is a promise of a radical break with history, of life without limits.
Where else could this have happened but California? It was on Telegraph Hill where I thought I could best see the future: It was, in the words of Y2K-Era industrial designer Karim Rashid, a never-ending undulating boundless shape in perpetual motion. In the new millennium, we could all invest in the stock market. We could all invest in startups and take a buyout and retire at age forty-five like Uncle Paul. We could all log onto the internet with our Bondi Blue iMacs and check our portfolios, then hop in our New Beetles and cruise Highway 1, a Smash Mouth CD on the stereo.
IN 1999, SMASH Mouth released their second album, Astro Lounge. That summer (the one between elementary and middle school) its lead single, “All Star,” became a runaway hit. The San Jose–based former ska band united around a tightly produced, layered pop sound, at once retro and futuristic; the late ’90s does the ’60s. There are theremins and Farfisa organs. One song is a cover of the Four Seasons’ 1965 single “Can’t Get Enough of You Baby.” Another uses a riff nearly identical to the one in The Crystals’ 1963 hit “Then He Kissed Me.”
Astro Lounge was recorded in the same Los Gatos hills where Uncle Paul and Aunt Caroline had lived. The album is, implicitly and explicitly, about California, taking its melodies from surf music and ’60s dance grooves. In the song “Radio,” the band references being from San Jose. In the opening song, “Who’s There,” “a night out in California” at the movies is disrupted by the arrival of aliens.
This is the album’s other recurring motif: outer space. This wasn’t a particularity. During the late ’90s, there was a cultural fascination with aliens, specifically green ones with lozenge-shaped heads and large eyes. I owned a necklace with a charm in this shape that glowed in the dark. My AIM screen name was LilAlien2. When our fifth-grade teacher Mrs. Hathaway asked us to vote on our class mascot, we elected to call ourselves the Aliens.
Aliens were everywhere in the culture: The X Files, Independence Day, Men in Black, as well as less-remembered media properties like Nick- elodeon’s The Journey of Allen Strange. The United States Postal Service held an international contest called Stampin’ The Future in 1998, in which kids designed stamps to commemorate the new millennium. All four winning images—which were printed on stamps you could actually buy at the post office—depict space- ships or planets. In the turn-of-the-millennium cultural imagina- tion there was a connection among outer space, the future, and the cyber. It makes sense to me now: all three are frontiers.
Despite its sunny exterior, Astro Lounge contains a kernel of bitterness and defeat. It senses a darkness lurking as the millen- nium turns. In “Home,” an eerie, reggae-inflected track near the end of the album, singer Greg Camp reflects on the state of the music industry, just a few years before Napster and Spotify would decimate it: “Lottery or poverty, you’re a commodity, so what’s it gonna be?” In “I Just Wanna See,” Camp examines the state of the economy more generally: “Sleeping on the sidewalk, a home they call, doctors and lawyers race for the ball.”
That line made me think of summer 1998. Uncle Paul had walked me all over Chinatown and North Beach, showed me storefronts filled with pungent traditional medicines and tables where old ladies played mahjong and a café where—he claimed— you could get the best sfogliatella outside of Naples. He bought me one, and the crisp outer layers yielded to a sweet, citrus-flecked ricotta filling. I had no point of comparison—I had never been to Italy—but it was certainly one of the most delicious pastries I had ever tasted, I thought, crumbs flecking my shirt.
We found ourselves down along the Embarcadero. Behind us, a colonnade of palm trees lined the roadway. The bay lapped gently at the pilings a few feet below, scenting the air in a way I found comforting. The ground was littered with discarded sourdough bread bowls that Uncle Paul informed me had recently been filled with clam chowder and were eaten, he said, “by tourists.” Now, pigeons and seagulls swarmed, crumbs flying as they pecked. I had never seen anything like it. All that bread on the ground. A whole grocery store’s worth of bread.
Paul started dribbling one of the bread bowls like a soccer ball. “Look alive!” he said, kicking it my way.
I trapped it, dribbled it, laughed. He was always so silly, so fun. I passed it his way, he passed it back. I tried to juggle it on my knee like I had seen some of the kids who were really good at sports do in PE. I punted the bread bowl. It almost flew off over the railing into the water below, arcing a few feet short and lodging under a bench. I jogged over to retrieve it.
“What do you think you’re doing?” said a man, coming closer.
“I . . . I dunno,” I said, confused and surprised before I started to feel scared.
“Not everyone can afford to play with their food,” he said, his voice rising.
Who was this man? Where did he come from? And why was he so angry at me?
“But I’m just a kid,” I wanted to say, but didn’t. He was saying other stuff now, yelling it.
“Hey!” I heard Uncle Paul’s voice. “Hey!”
He was right there, towering over this other man, tall and burly even by grown-up standards. “Get out of here, okay, buddy?” Uncle Paul said.
The guy wandered off. Uncle Paul patted me on the back. “You have to be careful in the city,” he said. “Not everyone here is nice.”
As we walked on, Uncle Paul explained that the guy was homeless and, he added, “probably crazy.” I didn’t know it then, but there was a change underway in San Francisco, where people like my uncle were displacing people like that guy. I might have been just a kid, but to that guy, I represented the forces that put him out on the street. I didn’t fully understand this until years later, but Smash Mouth did.
Even “All Star”—that ubiquitous, number-one hit played at parties and sporting events, eventually making its way into the soundtracks for Rat Race and Shrek—has pretty dark lyrics if you listen closely. There is, for instance, and entire verse that appears to be about climate change. And the chorus—with its talk of gold and getting paid, where only shooting stars break the mold—feels like it’s about the New Economy. In the New Economy—as it was called by journalists and economists and President Clinton—we must all build our human capital and compete with each other on the free market. It is no longer enough to be good. You must be great, as well as very, very lucky. A shooting star, if you will.
THE DOT-COM BUBBLE began to burst in March 2000, triggering an eight-month recession in 2001. By October 2002, the majority of dot-com wealth had been erased.
As it turns out, a rapid surge in asset prices is not sustainable over the long-term, whether the assets are tulips or Pets.com stocks. I know Uncle Paul incurred losses, though I’m not sure of the extent. He seems to have fared well enough, though he later sold the waterfront mansion, and he never bought that private jet. Nokia retained blue-chip status throughout the 2000s. In 2007, the company had 51 percent of market share in mobile phones. That was the year Uncle Paul told us to liquidate our shares. The proceeds were put in another investment account and helped put my brother and me through college even as tuition rates surpassed inflation. By the skin of our teeth, we both graduated debt free, I in 2011 and my brother in 2016.
But I didn’t graduate from Stanford. I’m disappointed in myself, though I’ve read enough history and theory to know better. The New Economy was a winner-take-all economy, where only shoot- ing stars could break the mold. It wasn’t enough to shine—you had to glow. Sure, I was relatively smart, and I had some talents, but I was never a shooting star. Most people aren’t. Definitionally, most people can’t be, no matter how good they are. At least I didn’t end up like that guy on the Embarcadero.
Maybe it was better, the fact that I didn’t go to Stanford. It is, after all, the flagship institution of tech futurism, and technology these days kind of sucks. Monopolistic social media companies have corralled users into a handful of addictive platforms filled with bots, misinformation, and violent threats. Streaming services have decimated artist revenue, ride-share services have destroyed the taxi industry, and self-driving cars plow into pedestrians. Google’s vaunted search algorithm is now clogged with ads. Some tech billionaires pursue experimental life extension treatments, while others seek to colonize Mars (there’s that frontier motif again). Many subscribe to some flavor of eugenics. The internet did, in fact, reshape the twenty-first century, just not in the way I assumed it would as a kid.
And California, instead of serving as a beacon of hope and progress, now catches on fire annually. It is the hated home of the richest and most powerful people on the planet: your Thiels, your Zuckerbergs, your Musks. It is a place that spawned a cottage industry of nonfiction books–cum–streaming miniseries about venture capital scams. It is a place where the rapidly growing homeless population is corralled into brightly painted camps to keep them out of public view. California remains a vision of the future: not as utopia but as dystopia.
I don’t know if I could have seen any of that from Stanford. I think I can only see it from here.
Excerpted from the book Y2K: How the 2000s Became Everything (Essays on the Future That Never Was) by Colette Shade. Copyright © 2025 by Colette Shade. From Dey Street Books, an imprint of HarperCollins Publishers. Reprinted by permission.
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