Small but distinct pattern changes often precede large-scale economic events.
The 2000 Tech Collapse
It was January of the year 2000. I had been invited, at the recommendation of Merrill Lynch, to sit with then-CEO Ellen Hancock and her Exodus team – at the time the market leader for data centers – as they prepared a rather long presentation for their board meeting a day or two later. Since I knew essentially nothing about data-center economics at the time, I assured them that I would be happy to attend but likely would have little to add specific to their business. I suspect we were all hoping some patterns on a larger, more strategic scale would become apparent.
It was a long day, with too many PowerPoint slides, and I had literally nothing meaningful to add. I fell back on one of my favorite rules: when you have nothing intelligent to say, say nothing. By noon they must all have been wondering why I’d been invited.
The meeting went through lunch, and then into the afternoon, with one slide after another on issues like buildout costs and operating issues per rack, per center, overall. I felt like a dog trainer at a geology conference.
And then, suddenly, a financial slide came up: there had been a small dip in revenues at the beginning of Q1 2000, but it was so early in the quarter that everyone agreed it was likely noise, and not worth dwelling on.
I asked to see the slide again.
Normally, they would have been right to ignore the dip. But I’d noticed two major pattern-breakers in the previous few days that now started to make me increasingly concerned.
