The Internet as Virtual California

By on June 8, 2005

Matt Webb has postulated a fascinating theory about the dot-com bubble, and why so much money got thrown after so many crazy ideas. A great article and a must-read for web folks.

The huge influx of cash at the turn of the millennium led to the whole Web being built in the image of the Bay area. The website patterns that started there and – just by coincidence – happened to scale to other environments, those were the ones that survived. Those that bootstrapped off the postal service, for example, did well—eBay and Amazon are the big two. Others didn’t: They had assumed that because the pattern worked well in their home territory, they’d be just as appropriate to the rest of the USA, and to the rest of the world. But they weren’t appropriate, and they failed. We’re left with a Web that’s useful to everyone, yes, but one that’s primarily shaped by West coast North America.

The Web is San Francisco circa 2001, writ large.

He also has advice that’s key for those of us trying to come up with the next successful web app:

The Web’s been coasting since 2001. It consists of that which started in SF and happened to adapt to the larger ecosystem, and that’s it. But since 2001, there are millions and millions more people online—and they’re pretty much uncatered for. They have no native services.

Where are the applications for people who live in tight communities of a thousand people and strong local government? Where are the corner-stores offering convenience and personality coupled with the economies of scale and selection of the whole web?


The automotive industry, the consumer electronics industry, the media producers and distributors, and more: they’re all looking at China and India, emerging markets of a billion or more people. For us internet folks, there’s a homeland China, the China inside, a mass market of a hundred million or so, come online in the past 4 years, and waiting for their own killer apps.

Via kottke