By Chris Dixon, contributor
Us old timers remember 2001-2004 when anything related to the internet was ridiculed as a Ponzi scheme. The conventional wisdom was no Internet company would ever make money and all the ideas of the dotcom boom were stupid. Turns out that 2001-2004 was one of the best times to invest in Internet companies.
An artifact of that era is a board game called Burn Rate:
Fittingly, this game came out at the trough of the web downturn, 2002:
Central to the game are "bad ideas" that players try to get rid of.
One bad idea is name your price auctions:
Today the leading name your price auction is Priceline, which has a $20 billion market cap and made $750 million in profit in 2009.
The next bad idea is an online computer store "eggbrain computers."<!-- more -->
The leading online computer store is NewEgg, which is profitable and had $2 billion in sales in 2009.
Internet money sounds a lot like Paypal, which was sold to eBay for $1.5 billion and has since been eBay's fastest growing profit center.
The leading online ad server was DoubleClick, bought by Google in 2007 for $3.1 billion.
Finally, we have the perennial punching bag "group discount auctions," - basically Groupon, which reportedly is getting offers now for more than $3 billion and is generating over $50 million a month in revenues.
Lesson: When the mocking gets the loudest, double down on your investments.
Chris Dixon is a serial entrepreneur and angel investor based in New York City. He currently serves as CEO of Hunch, and co-founder of Founder Collective. He regularly blogs at cdixon.org.