Late '90s Tech

September 2023.

Late '90s Internet companies grew incredibly quickly. For example:

Netscape: Jim Clark and Marc Andreessen founded Netscape in April 1994. They launched the product in October 1994 (6 months from inception). The company did $3m of sales in the first quarter of 1995 (11 months) and $12m the second quarter (14 months). The company went public in June 1995 (15 months), at about a $2.9B market cap. Netscape did $346m of sales in ‘96 (32 months) and $533m in ‘97 (44 months). AOL announced that it would buy the company in November 1998 (4 years and 7 months) for $4.2B worth of stock.

Yahoo: “Jerry’s Guide to the World Wide Web” launched in January 1994. In January 1995 (12 months), it had about 100k daily active users; by February 1996 (25 months), it had 6 million daily actives. The company IPOed in April 1996 (28 months), at a market cap of $850m. Revenue was $1.4m in 1995, $19.7m in 1996, and $70.4m in 1997. Sequoia Capital invested $1 million for 25% in April 1995, a stake that would have been worth $8 billion by early 1999.

eBay: Pierre Omidyar coded up the initial version of eBay over Labor Day Weekend in September 1995. By June 1996 (9 months), monthly revenue was $10k. The company ended up making $350k in 1996 (15 months), and $4.3m in 1997 (25 months). eBay IPOed in September 1998 (36 months) at a market cap of about $2B. Benchmark invested $5m for 21.5% in June 1997, a stake that would have been worth $500m 15 months later.

Hotmail: Hotmail started sometime in early 1995 (let’s say January). It launched in July (at most 7 months), and by the end of 1997 had about 25 million users (24 months). The company sold it self at the very end of that year for $400m worth of Microsoft stock (24 months).

Paypal: PayPal was founded in December 1998. In July 1999 (8 months), they launched the infamous PalmPilot-to-PalmPilot money beaming product, which flopped. In October (11 months), they launched the money emailing feature, which was wildly successful. PayPal and X.com merged in March 2020 (16 months), made it through the market crash, and IPOed in February 2002 (39 months) at about a $800m market cap. At the time of IPO, PayPal was on a ≈$160m revenue run rate.eBay acquired the company in October 2002 (46 months) for $1.5B.

(To convert from late '90s dollars to 2023 dollars, multiply by 1.8.) Later tech companies, even very successful ones, tended to grow much slower. For example, Shopify was founded in 2006, and had about $1M of revenue in 2008 (see the BVP memo). It never grew much faster than 100% per year. While Netscape was doing $500m of sales four years after inception, Shopify was doing $5m.

Bitcoin was created in January 2009, and first reached a $1B market cap in March 2013 (4 years, 3 months). Still slower than late '90s comparables.

Are there any recent companies that can match the late '90s Internet cohort? Midjourney. The company is allegedly on track for $200m+ of revenue in 2023. It was founded in August ‘21, so that’s only about 28 months after inception.