Slashdot Mirror
Silicon Valley Has Learned to Love the Bust
An anonymous reader writes "Fortune's David Kirkpatrick interviews scores of valley execs who have stopped worrying continued innovating. He writes: 'The underlying tech boom that began the bubble actually has never stopped. It just stopped paying off. Says Eric Schmidt, CEO of Google, the company that has emerged as the head of the new class: "If anything, the rate of innovation in technology has increased in the past couple of years. But that doesn't necessarily make it a good business. The beneficiaries are the end users." Agrees Rob Carter, the CIO of FedEx: "The sound we heard wasn't the bubble bursting; it was the big bang."'"
Is this "Big Bang" going to pay my rent this month?
I love how all the quotes come from the top 25% (nay, even the top 1% in many cases) of the food chain. Hogwash.
Certainly the unemployed fledgeling DBA who never gets interviewed does not love the bust.
on wall street.
there the ones giving these CEO and CFOs all the ideas that they must increase profits and growth at unatainable/unsustainable rates.
Now, I have never been to business school, but even I know that companies can't expect to increase forever at insane rates.
The bust will give these people time to grow at a slower rate, while not worrying so much about what some dork on the street thinks.
Sent from your iPad.
So a few companies have managed to survive once the investors pulled out. General economics tells me that these survivors are the few that actually have a viable product (i.e. google) and also that these were what should have been invested in and not the ones that just had a good domain name. Great, I'm happy this is how real innovation in capitalism works.
Now I'm being told that these remaining companies still aren't making money (you're going to have a hard time convincing me that google's owners aren't happy with their current financial situation). To innovate a company must do at least the following: do something, test that thing, pay the people who did that thing (got to eat, no matter how much you like who you're working for), and advertise (what's the point of something new if noone knows about it?); How does one do these things without at least some income? If anyone knows how this works please tell me, I have no money and would love to do something with it.
Devil Ducky
MY peers would get out of jury duty.
People with H1-B visa's are not your problem. I know too many people that got some dinky tech degree from ITT Tech, got paid great money during the Boom, and now bitch and moan about H1-B workers taking their jobs. Its capitalism at is best!
Stop by my site where I write about ERP systems & more
More importantly how many people do you know that got into the tech industry in the boom and have no real ability there. The big thing about the tech industry is it knows how to automate there shouldent be any grunt jobs thats part of the point your either inovating solutions or your out. Some people are not ready for this and dont have the aptitude and that is the vast majority of the people I have found that have trouble getting work in this market. I dont hire people that dont do tech work as a hobby and the educational background unless it's entry level. That guy that wants to put in a 40 hour week and dosent build / hone there skills dosent belong in this business period.
No sir I dont like it.
I left a permanent position when the bubble burst to become a contractor and I am finding work just fine, and less headaches trying to park since people left.
For those people who think they have an idea what Silicon Valley (and San Francisco) is like "post-bubble":
It's just recently that you really start to see "for rent" signs in San Francisco, in the way you see it in *normal* cities, like Boston or New York. It's not a ghosttown, it's just normal.
There are plenty of VCs who have money. They're just not spending it so crazily. Not everyone is crying 'poor me'. Not everyone blew all their money here. The media makes it out as if there are 25 year old millionaires sitting in the gutter outside a bar with a suit on, homeless and whining. Far from it. It's not like the area is Flint, Michigan or anything.
Maybe my experience is the exception. Sure, work is not crashing on my door, but I have had thus far an ok time finding work in the area of expertise I had during the bubble.
To sell magazines and to sell advertisements. When one of the officers at my company was featured in Fast Companies, my company was bombarded with Fast Companies subscription offers, Fast Companies free samples bookmarked to the article in question, and Fast Companies advertisement requests.
Fortune Magazine is probably more subtle than Fast Companies, but the same agenda remains -- whoever pays the bill gets to decide on the content.
huh? Just because you don't have the stats of the number of h1bs that got affected by this? If you are still unemployed, first of all I wish you good luck but try this - Change your resume to say you are an h1b and see how you start getting 'only permanent residents' replies.
Agreed.
.com's became so ubiquitous, home investors and online trading also boomed (largely for the same reason: the internet.) For the first time, Joe investor could do extensive research and play complicated strategies all on his own. The problem was that Joe investor didn't have an institutional mind-set. There was no governor on Joe investor's button.
The so-called "Tech Boom" and bust were really an investment boom and bust.
At about the same time that
That, combined with the young entrepaneur who thought you just needed to be a good geeks to survive as a tech company breeded the bubble and consequently the bust.
The recession wasn't the fault of tech (entirely) or Greenspan (entirely), etc. It was largely the fault of the unreasonably (and that's a polite term) optimistic investors.
Hot Damn! It's the Soggy Bottom Boys!
I don't know what silicon valley is thinking. I've been loving the bust for many years now. When I was in high school I was fascinated with especially large blouse bunnies. But once I dated a girl who overflowed a DD bra, and those things were all over the place when you set 'em free. That sent me scurrying off in search of less robust busts, so to speak. I later dated a girl who was a competitive figure skater. She was very skinny, and had no bust to speak of. My man teats were larger than her breasts! I found the lack of breasts to be totally unsatisfactory, so after that I set my sights more on girls with b or c cup breasts. Since then I've been quite satisfied.
It does make me wonder though, who DOESN'T love the bust?
Breasty nature aside, I have found a womans shape rarely has any baring on her level of insanity. It seems MOST of them have insecurities and worries, and many of the same troubles we all do.
Kikoman doesn't judge people by their appearance. Unless they are wearing jeans that are far too large, and hang down halfway off their hips showing off their underwear. In this case Kikoman judges these people to be pathetic idiots, and hopes their pants fall down while running across a busy street, causing them to fall and possibly to be run over by a cement truck or maybe seven motorcycles.
KIKOMAN!
Perhaps its my utter ignorance, but I would think it is a great time to start up a new company. Yeah, there's less money floating around, but VC's are in a bind. They only make their money by pumping in money into startup companies likely to succeed. If you have a credible business plan, and there are no major flaws in your management team, I can't see why you'd have a problem finding investors. (Unfortunately, I don't possess that surefire idea that would make me want to quit my job.)
There is no America. There is no democracy. There is only IBM and AT&T and DuPont, Dow, General Electric, and Exxon
I guess that it's a matter of perspective. We've got plenty of work, just no money to hire people - so I wouldn't say that it's a boom, either.
It was not a tech bust but a VC funding bust, and the ones that went bust did not have 2 brain cells to rub together between them. The Tech boys wore out there vapour-ware welcome. You can only promise the sky and deliver dirt so many times before even a moron with too much money and not enough brains will wise up and stop giving you cash.
errr....umm...*whooosh* *whoosh* Is this thing on ?
Why does it happen that when the journalists write about anything that you know at least a little about, you understand that it's bullshit almost 100% of the time?
The whole article consists of random facts collected to support the idea they a priori had. Oh yes, "Adobe Acrobat has brought the same benefits to sending documents over the Web". How insightful. Look what we found! That is surely a sign of things to come...
It's no different from any article written during the dot-com boom. They first decide what they want to write (and what their subscribers want to read) and then dig up the facts to support their preconceived ideas.
This is not research, just a lame article that is not worth the magnetic particles that it is stored on.
Future Wiki -- If you don't think about the future, you cannot have one.
Worse than an investment boom...the "tech boom" was a marketing boom and bust. Remember all the garbage about the Internet being the greatest wealth producing industry ever?
The tech sector was growing at a nice healthy pace, when suddenly it became the center of every MLM or Nigerian fraud scheme ever conceived.
The heart of the investment bubble had very little to do with the technology but was centered around the marketing opportunity of the Internet. Every investor wanted a piece of the company that cornered the bicycle or furniture market on the net. The bubble was all about marketing.
The actual technology was growing about at the same pace before, during and after the boom and bust cycle. The marketing sector of the web, however, consumed itself and flamed out.
which nearly killed the classic dividend-paying stock model in favor of the far riskier growth stock model.
Most stocks are supposed to pay dividends. In effect, dividend-paying stocks act like bonds with greater risk in exchange for potentially higher payouts (good companies can and will increase their dividend payouts over time; really good companies do so steadily) and not having to pay back any principal. The company can cut its dividend if things go Bad, which is a risk for the investor but can help keep a wounded company from flatlining; a company financed with debt instead of equity would go straight to bankruptcy court.
So most new companies either go with the growth-stock model (which demands growth rates that are rarely plausible) or the debt-financed (junk bond) model (which imposes a crushing payment schedule). All because the American tax code is so fscked up.
Dividend payouts are also a concrete sign of financial health. It's way harder to cook the books when investors are expecting their quarterly checks to clear.
Of course, the odds of Congress actually killing the double-tax (by either letting companies tax deduct their dividend payouts or letting investors receive their dividend payments tax free, not both as is the case today) are slim, because the average lefty journalist and congresscritter thinks it would strictly benefit The Rich (tm).
Anyhow, human greed combined with the bubble-prone growth stock model caused the financial havoc of the past few years. Most of the putrid tech IPOs of the 1990's (literally half of which were dumped on the market by Goldman Sachs, run by Democrats like Sen. Corzine and ex-SecTreas Rubin) couldn't have made it as dividend-paying companies, public or private (and private makes a lot of sense when your capital expenses are small and you're just trying to retain techies), which in retrospect was a major Clue.
Distinguishing those with the aptitude and those without for this industry is virtually impossible using the classical resume/interview approach. You *must* be networked, and folks who work in the tech industry aren't "Let's Do Lunch" types.
The bigger problem is that people in the tech industry have poor project management skills. Either too many people launch in with their pet ideas and agendas or management can't buy a clue. E.g., a friend got me an interview with her sister at a nice company in Cincinnati after I passed along my resume. Interview went very well. Days turned into weeks into months. Finally, after a couple of calls and e-mails, they confessed that they couldn't fill the position because they couldn't hire anybody for new projects. Seems they were having trouble completing projects they already started. In other words, a clusterfuck.
That guy that wants to put in a 40 hour week and dosent build / hone there skills dosent belong in this business period.
Don't mistake a man with priorities for one who rejects subservience. Again, if the emphasis was put on getting shit done instead of the perpetual feature creep, 40 hours a week would make perfect sense. Sure, your average Slashdotter could show a little more sack, but why is the prevailing sense of the tech industry I read here so fatalist? A lot of folks used to love the art of the hack, and they're railing in the dust these days. So much of what we do now has nothing to do with hacking. The creativity has escaped out into the vacuum of the business world unless you're one of the privileged disallusioned (read: CEO, CIO).
You're right about tech work as a hobby. There's no better way to learn the trade. It's what drove so many of us to this point. Yet if programming for a living were anything like programming as a hobby, nobody would be complaining about work weeks in excess of 40 hours. Instead, I'm told I can't work over 40 hours a week, because I would accrue too much comp time. Additionally, I am told I have to use what comp time I have when I go on vacation despite having 150+ hours of vacation time.
It isn't the technical, geeky half that is the problem. It's the other 90% that sucks.
Sorry, but I'm waiting for everyone like you to be unemployed long enough that you're forced to sell your house into a buyers' market flooded with people who can't get even close to what they're asking for.
Housing prices in the bay area are artificially high - everyone leveraged themselves 30 years into the future based on dual incomes with yearly bonuses and stock option grants already factored in as to what they could afford per month in the late 1990s... then all-time low interest rates pushed housing demand, which kept prices high. Now, people are still unemployed, still losing jobs, still not getting raises, and stock options?? fuhgeddaboutit...
Just look at nearly any property in silicon valley and look at the discrepancy between what it would *RENT* for now as opposed to what it would *SELL* for.
Don't take any tech analysis from Fedex seriously. These guys have no clue about technology. Their answer to every problem is just to throw ridiculous amounts of money away on huge sun systems for the smallest problems.
Big fat "enterprise" Java wads that a good Oracle database and a flexible scripting language could solve for 1/3 the code size and maintenance, no doubt.
Sun likes bloated projects because it consumes more consultants and more hardware, which is money in their pocket. Bloat is Sun's profit strategy. "Enterprise" is an orange alert word for "bloat".
How many of you are working the same job for less pay/perks/compensation than during the 'bubble'? Why is your work so much less valuable now than it was then? I'm making twice as much as I did in 1997 but then again I was 19. How about the rest?
I'd like to propose that the VCs who still have all that money invested, one way or another in technology already got their cake and are now getting to eat it for cheap.
Step 1: Put out a lot of money to create a new industry
Step 2: Make a lot of money off of IPOs and idiot public traders. Pull out of the market.
Step 3: Call the bubble over and tell all your now barely surviving companies you can't afford to give them any more money, after you've made such a huge killing the year before.
Step 4: Create huge savings by cutting huge numbers of employees and cutting out all the perks. Bring down that 'burn rate'.
Step 5: Make longterm gains off the overworked proceeds of a 'recession'.
Well it may not completely accurate but I think it applies to some of the venture operations.
A fool throws a stone into a well and a thousand sages can not remove it.
Google do not require capital.
The only reasons for an IPO is if the market values their profit cash flows more than Googles owners do, the owners can cash in.
The other reason is if they want to cash out of the business.
The Mars confectionary company is extremely profitable, very large and privately owned. IPOs are not neccessary in all circumstances. They are necesary for undercapitalised businesses who's significant returns are a number of years away.
You're google, just keep collecting cash. I somehow doubt they're going to let a bunch of overpaid used car and insurance salesman who call themselves investment bankers (lower case under advice) talk them into anything.
To add to what you've said, however, the funding of all these market experiments did create an incredible coverage of ideas. A lot of good ideas got funded that wouldn't have. It's like laying fertilizer in the gound the strongest seeds come up, though a lot of the fertilizer goes to waste if you actually measure the percentage that's put to good use.
But basically I agree with you, and the keyward was "market driven". Ug.
-pyrrho
I have worked 35 hours per week for the last 5 years.
I don't plan to change that, unless I take one of the many offers I keep receiving from headhunters and move to an industry in which my contract demands 40 hours per week, in which case I will work the fabulous amount of 40 hours per week.
I am amazed about how many people will demand contracts to be respected with the only exception of a contract that regulates the relationship with their own employer, in which case they are willing to be humilliated and disrispected as much as they can endure and then a bit more.
If you are contracted to work 40 hours/week and need to work 50 or 60 hours per week your company forgot to hire somebody for a half time position.
IANAL but write like a drunk one.