NY's Silicon Alley Feels The Crunch

ephraim writes: "During the last year, I worked for dot-coms in NYC. About four months ago, I began to feel that a downturn in the industry was imminent, so I left to join a more traditional company. Far too many of the companies I consulted for seemed to have serious internal problems that appeared to preclude them from ever making any real money once their venture capital dried up. It turns out that I made the right move. This article from the NY Times Web site (free registration required) discusses the general trends in the industry, while another article on the site looks at the phenomenon through the eyes of one employee of a doomed company. What he says about people sitting around doing nothing is true for quite a few of these companies. While there are still plenty of jobs available for technology people in NY, those looking for work should begin to ask some more discerning questions about prospective employers."

Comments

Silicon Alley is a techie desert

[Lumpish Scholar]

(That is, "an empty or forsaken place; a wasteland"; not something you would put whipped cream on.)

I spent a year and a half at a start-up on 23rd St. (just across the street from Madison Square Park). For the last six months, my title was "Manager, Content Acquisition Software"; I had about half a dozen programmers reporting to me. We shipped client software (and hardware) and ran a production service, but never signed up anywhere near enough customers to approach our expenses.

One problem was how hard it was finding good technical staff. The quality of the average candidate was pathetic. Most of the C/C++ programmers I interviewed didn't know how to do pointer arithemetic!

Worse, everyone with even a shred of talent was heavily recruited by Wall Street. The guys down there offered $100K if you could even spell HTML; but they'd expect you to show up, wearing a suit, promptly at 8 a.m. every morning, and wouldn't think twice about expecting you to work until midnight for long stretches. After all, they're paying you big bucks! (Compared to everyone but the traders.) Techies on The Street are lucky to last two years before burning out.

So where's the nearest techie oasis? Believe it or not, central New Jersey. The legacy of the Bell System, and the huge Bell Labs installations here, has created a seed of talent not often seen outside Silicon Valley. I have friends at half a dozen startups founded here, and several more at companies based in the West Coast but opening offices here to take advantage of the great people. Ten minutes to the east is the Atlantic Ocean; fifteen to the west, horse farms. If you hate surburbs, forget it; if you like them, it's wonderful. Real estate, both residential and commercial, is relatively inexpensive, especially compared to the Valley or the Alley.

Startups

[ucblockhead]

You need three people to have a successful startup:

1) A "Visionary"

2) Someone with technical know-how

3) Someone with business sense.

This isn't unique to dot-coms. It is true for any sort of startup.

Apple, for example, had Woz (2) and Jobs (1 and 3).

Most of the dot-coms that go under have a (1), some have a (2), and few, if any, have a (3). That's why they fail. And the truth is, the earlier they fail, the better, because the bigger they get, the more investor money will vaporize and the more people they'll throw out of work.

For some reason, dot-coms got a free pass over the last few years, which is unfortunate. It is fortunate that this now seems to be ending because the dot-coms that do survive will be the worthwhile ones.

This is not very helpful to someone out of a job, I know. I've been thrown out of work when working for a (non-dot-com) startup as well. So take it as a learning experience, and when you look for your next job, look for Mr. (1), Ms. (2) and Mrs. (3). Because there are some dot-coms out there that will succeed.

In the '80s, there were a lot of young, hi-tech startups, too. I had the misfortune of picking two that failed. One had only a (1) and the other had only a (3). Other people picking startups in the same era ended up getting in early on Dell or Oracle.

There Dells and Oracles right now. But there are 10,000 dot-coms and there can only be a couple huge sucesses.