As with Dutch tulips and the South Sea Company, all bubbles need a defining moment; in 2000 it was the flotation of Lastminute.com.
Looking back at the events of March that year, observers refer to Lastminute as the perfect demonstration of how Britain got sucked into dot-com mania. The company, pitched quite simply as a seller of unsold travel tickets over the net, tapped into the swirling sense that the internet was about to change all the rules of business for ever. It was the fear of missing the "new economy" boat that made the Lastminute share issue so massively over-subscribed, and allowed Morgan Stanley to sell the stock at absurdly inflated prices. The company's young founders, Brent Hoberman and Martha Lane Fox, played their part to the full, making constant public appearances to comment on the dot-com revolution.
"It was a great period," says Hoberman. "The culture was very exciting. I felt we had a bit of America in Britain. It is very un-British to want to start your own business, and very un-British to be ambitious."
Just one day after the float, on 14 March, Lastminute's stock collapsed. Investors saw that the market was valuing at many hundreds of millions of pounds a company that had the annual turnover of a decent-sized newsagent.
But unlike other internet schemes such as Boo.com and pets.com, Lastminute has managed to make it through the last three, dark years in robust shape. "Yes, we were worried about people mentally associating us with Boo.com," says Hoberman. "I mean, like the founders of Boo we were also a blonde and a bloke setting up a whole new business concept."
Hoberman believes the main factor setting his company apart from the many disaster stories of that era is that, underneath all the glitz, he and Ms Lane Fox have been running the company with a pair of iron fists. A third iron fist is provided by the chairman, Allan Leighton, the former Asda boss with whom Hoberman speaks "every other day".
The often-touted image of dot-com employees working in giant dress-down play-rooms was no myth. When the liquidators moved in on the many thousands of dot coms that went bust, they fell gladly on table-football machines, pinball tables and a range of dot-com "office" equipment. Hoberman is indeed faintly embarrassed by the vintage video arcade game sitting in the lobby of Lastminute's Victoria offices, explaining that it "just arrived" while he was away on a business trip. "This company is not as warm and fuzzy as it sounds," he says. "Yes we trust our employees enough to let them do what they like, but we set tough standards. We stay in cheap hotels. Having the founders running the business means we are still on a mission."
Hoberman, though an admirer of the big internet successes like Amazon.com and eBay, believes the internet is not very much more than a powerful business tool, and still rejects the concept of a "new economy". "We never thought the internet was going to change the rules of business," he says. "We always knew that our business model was different from Boo's. What we also realised is that you need a big scale for it to work. If your model needs you to build a huge server and process, but you only take 50 orders, you may as well hire a temp instead."
Hoberman also attributes Lastminute's survival to the fact that he and his co-founder quickly learnt the realities of business. He recalls the initial refusal of the Savoy group to work with him. "Now they use us as a case study."
As fiscal discipline and expansion into other business areas have brought Lastminute closer to a full-year profit, the shares have also begun to turn. At their nadir in 2001, they were 96 per cent below their opening-day price of 480p. By the end of 2002, the stock was the best performer in the FTSE 250.
Hoberman, meanwhile, is determined to remain a rare dot-com success: "The business is not yet looking the way I imagined it," he says. "You always think it is going to take much less time than it actually does, and that was one of the big problems with the dot- com bubble. I want you to be using us five times a week within a few years.
"Martha hates the word 'utility' but I like it – it is about making Lastminute.com part of daily life."
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