Slashdot Mirror
The Walking Dead of Silicon Valley
Frisky070802 writes "CNN has a column about a liquidator who refers to thousands of Silicon Valley startups as the walking dead. It states: 'Pichinson, a self-described "doctor of reality" who helps liquidate companies, says he wouldn't have moved from Los Angeles to Palo Alto a few months ago had he not smelled more high-tech trouble looming.... "There's still another 6,500 to 7,500 companies out there who are among the walking dead."'"
I hate Zombies....
- It is easier to fight for one's principles than to live up to them. - Alfred Adler -
This is possibly an idle curiosity, but how is having hostage negotiating skills going to help out management? Or are these tech firms even worse off than we thought?
The anti-salmon
I forsee a bad zombie movie...George Romero are you listening? The Dawn of the Dot Com.
In breaking news, a professional liquidator who gets paid to oversee companies that are in bankruptcy said that he expects there to be a lot of companies in bankruptcy next year, helping his business.
Facts pointing out this may not be the case were pushed aside.
Film at eleven.
Up a little... you know... Redmond? Had to be said.
With other industries starting up? What percentage of restaurants fail? Bookstores? Coffee shops? Are these number way out of whack with business as a whole?
Poor zombies... will be hard for them to get their fix...
This comment does not exist.
Recently, I was inspired to look up an old company I use to work for. They employed about 12 people total.
They had three sales people, three support people, on tester, one secretary, three programmers. One of the programmers doubled as their sysadmin. The support staff had to work on bugs for Q&A in their time between calls. They literally had clients that were some of the biggest lawfirms around.
They made a product. They sold a product. They made money.
The guys who started the thing took out personal loans to keep it going for awhile. He passed out profits back to the employees when times were good. Honestly, if there was a place to be promoted to or a position open when I was ready to go on I probably would have never left.
Small companies can survive in the IT world. They just have to have half a clue in their heads to do it.
Fill a niche, concetrate and expand along the niche not outside it, keep employee and overhead costs low (their building was nothing grand but I had my own office).
This is basic business stuff that many companies still have no concept of.
This is more like an advert for his company... I wonder what this will have done to his stock price.
The only difference between a liquidator and a vulture is that the sh*t from a vulture goes back into the soil as nutrients and helps other things to grow.
Gentoo Linux - another day, another USE flag.
This could be part of the "jobless economic recovery" that we have been hearing about. Seriously though, the $4,000 chairs and plasma monitors have to get sold by someone, right?
I hate sigs.
From the article: 'Sherwood Partners "comes in and talks tough," said Doug Koo, who ran a failing San Francisco startup, Cat Technology. "They teach you that some of the things are a necessary evil."'
;-)
In other words: "Your employees ain't doing shit, but do let some of them read Slashdot all day, it's a necessary evil"
My Stack Overflow user
lol... and when was the last time you saw a Wall Street bigwig on TV saying "I predict stocks will go down this year." It's always "now is a grrreat time to buy stocks!!!
With so many IT call centre roles being outsourced to India, why not utilize India's Walking Dead. Specifically, there's an army - pun intended - of people who are considered legally dead in India due to corrupt officials declaring them dead so their relatives could get their hands on their land. I'm not making this up.. see this story
Silicon Valley, was it? Just a thought - where is SCO located..?
This guy has an interest in tech companies going out of business. What is the difference between what he says and what the dot-commers were saying 3 years ago when they were constantly bragging about huge internet growth predictions?
[FromTheMorning]
Have you ever had to negotiate salary and benefits with management? I imagine that many of these companies will try to get of their obligations. These hostage negotiators can convince you that you're getting everything you are demanding... right before they slap the cuffs on you.
Sounds like a perfect skills match to me. ;)
Maybe He'll open a branch office in Lindon Utah. That would be nice.
Hostage negotiation is getting people to listen and talk when they are feeling hostile towards you.
Quite a useful skill if you have it.
The guy in the article has at least saved a decent proportion of his client firms; it's pretty rare here unless you get a management buyout (e.g. Rover Cars - not exactly a roaring success). Most of the time the firm just shuts down and gets asset stripped. Oh well, we've never had anything *quite* as big as Enron.
When I am king, you will be first against the wall.
I used to work for a rather large and well known national (US) retailer in their store operations division. One of my responsibilities was to deal with stores that were slated to close for any number of reasons, perhaps up to 30 a year. If a facility is due to close or upper management is thinking about this (ignore what they tell you - trust me), the one thing they will inevitably do is try to save money on something that won't be around. Executives simply can't resist the allure of saving these costs when they can "get away with it".
The first place to save said money for a closing or may be closing facility is operational maintenence. These are the kinds of things that can function for a while before their lack of maintenence can be noticed. On a routine basis, it makes economic sense to do certain preventative and aesthetic work on a schedule. Maintenence and building engineers know this, and they know what tends to be put off in the event a building will be closing. While they may not get the official word first, they will almost always know that a facility is closing before someone like the executive secretary.
Here is what to look for, even if you know your company is in healthy financial shape and that your facility is not about to close. Pay attention to these because the good times are not always so good.
Parking lots striping, is the parking lot badly in need of painting those lines that tell everyone where to park? Parking lot potholes, are the only potholes that are fixed the massive ones?
Paint on the walls, most businesses will paint their walls every x number of years, it saves money on electricity (brighter walls allows less light ergo less electric), and this is one of those subconcsious things that can reduce or enhance worker productivity.
Electrician, does your facility have a dedicated electrian, and if it does, has he been deemed unneccasary? This is a big one, electricians aren't cheap, but their vital to maintaining a smooth facility.
Light bulbs, most businesses don't wait for those overhead lights to burn out to change them. It costs too much in terms of time when you have thousands of them. It's cheaper to change them all at once over the holidays or the like before they burn out. This is done on a schedule, learn what this schedule is, for this is also a big one that is easily overlooked.
HVAC, heating ventilation air conditioning. Preventative maintenence like coil cleaning can be put off for a while if you know the facility will be closing, but would never be put off otherwise. Coils are typicaly cleaned at least once a year in the spring, and you can seem them from the outside. HVAC equipment is extremely expensive to service and even more expensive to fix. This is a big one, pay attention to if units are working properly (not if your hot or cold).
Carpet, this is less obvious since it can last longer, and sometimes a really cheap company is perfectly content to let 15 year old carpet remain in place regardless. This can be a red herring, but it bears watching.
It is not uncommon for maintenence and building engineering people to feel that the people in their building are stuck up and pretentious, and as a result they will probably feel no need to warn the occupants of the coming closure. While the facilities people probably want nothing to do with you, your security and janitorial staff aren't so biased. They work with facility maintenence on a daily basis and they can often also get wind of what is coming up.
From the article:" "There's still another 6,500 to 7,500 companies out there who are among the walking dead."....
Last I heard SCO had sent only about a 1,000 letters or so; wiat a minute, does it mean SCO has 7,000 sister concerns or alibis??
-
If you keep throwing chairs, one day you'll break windows....
it seems to me that a lot of firms over there that file for Chapter 11 protection eventually emerge from it and become successful again
Yes, as explained here, Chapter 11 bankruptcies allow the company to reorganize and keep going. It is up a judge to decide if this is in the best interests of the creditors. If the company can make a good case that continuing the business would help them pay off more of the creditors, then that's the route they will go. Companies in chapter 11 can even get funding with debtor-in-possession deals that sign the assets of the company over to whoever is providing the money. Chapter 7 bankrupties (more like true bankruptcies) liquidate the assets of the company and divide the procedes among the creditors.
With both types of bankrupties the creditors get pennies on the dollar and the shareholders get nothing.
Two wrongs don't make a right, but three lefts do.
I'm at work, and I don't want to accidentally trip over something that could get me fired. Thanks!
Socialism: A feeling of discontent and resentment caused by a desire for the possessions or qualities of another.
Funny you should mention it, but it's pretty spooky around here now. Driving around, I see all around me empty buildings and "For Lease" signs everywhere. Go by the old 3Com/Palm building and the parking lot is just empty, (well, almost empty). Run over to AMD (Spansion, it's called now)and most of the buildings have been vacated, once again, "For Lease" sign proliferate everywhere. While we're in the neighborhood, we can stop by Fry's and find the store mostly empty, where we used to be able to find all the tech-heads here during lunch hour. D2 (Intel) seems to be ok, meaning it's still hard to find a parking space during the day. Many other companies such as LSI Logic, HMT, HP, Read-Rite, and others have been bought out by another company and liquidated, gone by the wayside and closed up shop, or just relocated and combined operations elsewhere.
The traffic also shows a dramatic change as well. What used to take me about 2 hours to get home to the Central Valley, I can usually make it in just over an hour, oddly enough, the worst is when I get to Tracy, wjere everyone seems to have moved (It's become a bustling little city, which I woulda never imagined growing up near there back in the 70's.
Back from the minor digression, It seems sad to me that the whole valley has become fairly lifeless and droll, considering this was where the whole technological revolution began. Thinking optimistically, this may only be a temporary condition until the next great advancement. Or things have just settled down from the great boom of the 90's and are back to normal. I guess we'll see.
Posted AC because, well, it doesn't matter.
Sam Emerson: My own brother a goddamn, shit-sucking vampire! Oh, you wait 'til mom finds out buddy.
"This is the golden age of the repo-man" *burns $100 bill to light his cigar*
I ask for a car and I get a computer. How's about that for being born under a bad
My names Slim Hades, and I work for a company who's lifespan is about out. It is from years of previous Network Engineers doing half-arsed things with Wi-Fi and basically turning a great WISP opportunity into a money pit. Sigh. Just when I found a career I like. Really, though, it's sad because as an employee of the WDA, it makes it hard to find pride in what you do when:
1.) You know in a year it won't even be around
2.) Every cool idea or new thing you think of is only good for your own personal satisfaction, and geeky braging rights, should you choose to exercise them.
It's nice to have a great enviroment to learn, but not when it's hostile.
Group Hug?
I've heard a vague rumor or two of a desperate, failing company located there....
Sounds like somebody is a little worried that their lucrative business of stalking dying companies won't be quite so lucrative in the near future. So he now proclaims that times will still be bad in an attempt to stifle spending by consumers and companies, thus furthing this slump that we're in.
This reminds me of the Simpsons episode where Bart joins an Internet company and they die at the end of the episode as Bart is confronted by a repo guy lighting his cigar with dollar bills.
.. the huge amount of money you have resting in a bank account that you need our help to get at, in return for a percentage. Oh, wait, that all went to Milton..
To liquidate a company with no debt and to teh effect of $50 Billion in cash.
Remember, liquidators do just that: liquidate assets. If your company is failing to make money, has a lot of debt, and is going under, you'll need to liquidate (sell them for cash) to try and pay off your creditors.
They don't go after companies that make money but espically not ones that make money and have money. Even if MS starts loosing money, they have no outstanding debt so they don't have to worry. They'd have to burn through their cash reserves before there'd be any problems.
This article
states that 4 out of 5 new businesses fail is a myth. Take it for what its worth, another opinion.
Dogma - "let's just say we'd like to avoid any empirical entanglements."
The repo business is in a golden age, one that will never end! So when is this guy's IPO coming out?
So this guy does "business process reorganization" or whatever it's called this second. That's way more of an empty career than even being involved in a "Walking Dead" business is.
These guys are only half a step above cult leaders and gurus, and their entire job consists of being professional scapegoats. Show me one who has ever recommended to cut the salaries of executives... you can't. Their ultimate conclusions are always to get rid of bottom-rung personnel. I don't think you need a third party to come up with that bit of genius to help your company along... you just need an executor to pose as the motivation for the decision.
If you don't like it, or think it's corny.. just ignore it. Don't be a karma-tanking chodesmoking asshead.
Or at least use a moderation that can be metamoderated. Unless you're afraid of something.
I just bought a new box of ten 18G SCSI drives for $11.50each. That's 63cents a Gig!
RAID the right way!
We don't need no stinking IDE!
I don't want a pickle; I just want a Motor-Cycle! A four foot cop arrived with a five foot gun!
I can get from Walnut Creek to Mountain View via 680 & 242 in less than an hour. That's a 55 mile commute! :)
Getting home is usually an hour to an hour and a half, depending on how many traffic catastrophes have occured on 680.
same difference.
m.
Tubgirl troll in .sig.
"The time is always now" - Victor
This story was painfull to think about. I am 23 years old, I have been laid off 5 times, 3 of those companies don't exsist any longer.
- Directv BroadBand
- Transport Logic (Bought by Firstworld, who is no longer around I believe)
- Encompass Telesystems (Didn't even make it to having a web presence)
5 layoffs in 5 years. I live in fear, but have become bitter and jaded. I expect a layoff to come at any time. Especially since I work at Intel now.Pretty Pictures!
On the other hand -- if Microsoft got hit with the punitive damages they richly deserve those assets would be wiped out in an instant. Well a guy can dream can't he?
Pichinson, a self-described "doctor of reality" who helps liquidate companies, says he wouldn't have moved from Los Angeles to Palo Alto a few months ago had he not smelled more high-tech trouble looming....
/.
If any real estate agents sell this guy a place in Lindon, Utah around 2005 can they post the news on
Cheers
Hmmmmmm..... Deep fried and look like Squirrel.
Whoops, they're in Utah these days, aren't they?AAA
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
However, that said, it would interesting to see some reliable figures. Funny how it's run full circle - 'dot-com' started out as a pejorative, was the latest rage, and is now a pejorative again.
Beta is broken and the link to classic doesn't work. Stop wasting our time or there won't be anybody left here.
A lot of the dot com babies were pushed to expand by their venture capatilists, who didn't really care about the companies' long term health. Momentum, expand, expand, expand, get more funding, get some press, then do the ipo so that the VCs can cash out.
-------- In Soviet Russia, "Soviet Russia" sigs hate Slashdot.
I hope to use that meme more frequently in my deepest moments of spacing out. I do believe there are so many walking dead amongst us that we subconsciously block them out of our perceptions. This line of thinking would justify my belief that the United States economy really is in the shitter, we just suffer from irrational exhuberance. Something has got to give.
Oh how I use to love that site lol...
I would get a 20 dollar check every month just for running that ad banner thing at night.
I cant believe there are any of those paid to surf companies still around.
Anyone who uses them are the people that can break the rules, or they are just the massive pyramid scheemer guys that host websites for the sole purpose of refering people to such site so they get x percentages of whatever their referers do.
...getting the guy with the gun to stand in front of a window so that the smipers can get a clear shot.
-------- In Soviet Russia, "Soviet Russia" sigs hate Slashdot.
The software biz is just beginning to enter a phase of massive consolidation and commoditization just as these firms need to show strong revenues. I must agree with Larry Ellison's self-serving comments that 80% of the software firms have no future.
This will impact Silicon Valley, which contrary to reports has not really generated much in the way of new industry in the last few years...the area is in fact turning more and more to the large firms (Adobe, Yahoo, Oracle, Cisco, Intel, Applied Materials etc) to shore up the local economy.
But, for anyone who wants to start a new business, I can't imagine a city with more commercial real estate on the market. Take your pick!
Depending on the type of firm you are starting, you are not going to be able to find a pool of labor in Idaho that matches Silicon Valley. Maybe VB programmers, but not hardware/optical/deep software type stuff.
I don't think you know what droll means. Nice post, otherwise.
There are no trolls. There are no trees out here.
Sure, a few smart guys in a garage will always outmanuevre a mound of VCs and suits. Thing is, the VCs don't care about small potatoes, even very well run and profitable small potatoes. They want big potatoes. They have A LOT of money to manage and they need a MAJOR payoff to make it worth their while. This kind of company doesn't 'scale' in their minds.
.com thing came and went. The VCs (and Wall Street), who have the money, created an evironment which led to lots of 'fluff' in the form of huge headcounts, 'internet presences' and above all, growth (profits be damned!). Heck, they essentially automated the creation of companies very much like the music industry automates the creation of music (ok, write a business plan, get a valuation, hire, make a website, etc.).
And this is really why the
Does it hurt to hear them lying? Was this the only world you had?
- MCI-WorldCom: in Chapter 11
- McLeodUSA: in Chapter 11
- Exemplary Technologies: Chapter 7, CEO did time in Club Fed
- Network Associates: the division I was at got annihilated
... I'm currently in graduate school because I've come to the belief that the Industry is just not worth it. Whenever I hear HR reps talking about how they're irked that young engineers have no company loyalty and will abandon ship for the next good offer to come along, I want to shake them vigorously and shout that we've got no loyalty to employers because it's been proven the employer has no loyalty to us.I'm 29, and I want out.
The moderators, it appears, did not understand recursion of humor...
they think they'll be in 'business' long after they've turned US into even further debt & disruption?
the real felonious execrable will be polluting the airwaves with their self-adulating payper liesense stock markup fraud hypenosys, right up until the big flash.
Silicon Valley has many non-public companies that are quietly dying. Often it's not their fault; they were support companies for the semiconductor industry, which has moved elsewhere.
I've been reading "The End of Detroit", on how the US auto industry blew their market share. I see many parallels to Silicon Valley. Auto manufacturing hasn't been centered in Detroit for years now. Detroit, as a city, is a ghost town. The population is half of what it was at peak. See The Fabulous Ruins of Detroit. That could happen here.
I guess the archetypical US's Wild West ghost town after the gold dried out had the same feeling.
IANAL but write like a drunk one.
I thought they were referring to Darl McBride and the SCO clan.
Quo usque tandem abutere, Nimbus, patientia nostra?
Most of the failed tech companies had doomed business models in the first place. Rather than plan for a conservative, common-sense approach, they opted for the "whore model" where they gave out products and services at a loss, thinking that at some point they would later get customers to pay. Even companies like Amazon.com, that has whored itself out and hemmoraged money since day one, with substantive market share, still can't quite figure out how to turn things around so the company is on solid ground.
There are still a lot of solid, tech companies that are growing, but these are companies that didn't dine on the magic mushrooms being handed out by VCs and other people who were only in it for the short-term payoff at the expense of shareholders, the greedy public and their common sensibilities.
As the owner of a successful "dot com", I deal with customers every day who wonder why I don't charge "whore" prices for hosting and other services. And they wonder why their cheap-ass services blink on and off or the company they've chosen isn't around a few months later? It used to be that businesses were afraid of dealing with small Internet companies for fear they wouldn't be around or would leave them hanging. Now it's the other way around: they don't trust the big companies, and rightly so!
I just moved to Sunnyvale, unaware of the zombie infestation.
I guess I should just stay in my apartment.
I belong to the ______ generation.
non-smoking restaurant/bar, you fucking faggot. You probably tongue Robert Reiner in the asshole.
Those clowns burned through $3 billion in cold hard cash!
What total imbeciles, gross excessive "bloat" on hosting services which basically requires an empty space with a fiber optic backbone connection coming through the wall.
Instead Xodus had bullet proof glass, man traps, armed security guards, kevlar reinforced walls, etc.
What morons, spend all their money on fluff and when bankrupt!
Typical attitude of Palo Alto nuts with their heads in the clouds!
LOL
What's great for the Bushies is that they can brag about the wonderful economic growth (in terms of dollar figures). However, if you look at the US growth in terms of actual currencies (that will be worth something in the near future) then we are actually in a economic contraction. So we can expect great growth, and rosy numbers in 2004, for sure. >8% growth perhaps, isn't it great? yeah...uhm.. great.
This is also not neccessarily a terrible thing for irresponsible idiots who run up their credit cards or take out a huge mortgage, nor for the corporate equivalent, high debt companies (some of which are the walking silicon valley zombies) or those that are writing non-investment grade bonds. I am not concerned about them; these groups have their own (often intractable) problems and besides their parasitic effects, they are irrelevant to those of us that really matter; I am largely talking about the entire middle class citizens.
For most people the growing federal debt is a very bad thing, and this is especially true for the young generation in their 30's who have been dedicated to prudently saving up for retirement for 20 years into the future. You people had better seriously consider how to protect yourselves (give as much thought as you can spare, and do it as soon as you can).
For the younger ones starting their career, or for those who have, for the most part, put off saving, but aren't happy with the way things are going in your country, my advice is to look for an exit strategy. Start saving up, be look into moving to another country which will not rape you into slavery, and look for a better future; this isn't how things are supposed to be. I really have empathy for people like the previous poster, because I know so many of us are in the same boat, but aren't quite sure what the right thing is. We think and hope this country can be saved, but it prudent to always have an exit strategy (yeah, like that Noah guy in the bible).
ACCOMPLISHMENTS AS PRESIDENT:
I invaded and occupied two countries at a continuing cost of over one billion dollars per week.
I spent the US surplus and effectively bankrupted the US Treasury.
I shattered the record for the largest annual deficit in US history.
I set an economic record for most private bankruptcies filed in any 12-month period.
I set the all-time record for the biggest drop in the history of the US stock market.
I am the first president in US history to enter office with a criminal record.
I set the all-time record for most days on vacation in any one year period.
After taking-off the entire month of August, I presided over the worst security failure in U.S. history.
I am supporting development of a nuclear "Tactical Bunker Buster," a WMD.
In my State Of The Union Address, I lied about our reasons for attacking Iraq, then blamed the lies on our British friends.
I set the record for most campaign fundraising trips by a US president.
In my first year in office over 2-million Americans lost their jobs and that trend continues every month.
I set the all-time record for most foreclosures in a 12-month period.
I appointed more convicted criminals to administration than any president in US history.
I set the record for least amount of press conferences than any president s
Only small companies can survive. Like this one http://www.synergeticsoft.com
Actually, I think the moderators have a great sence of humor. Recursion is redundant! I know, it's not as funny after you explain it. It's the funniest mod I've ever seen. Worth the cost of one karma point. They are free to anyone willing to take the time to write a good comment.
"They did not understand the concept of "do something, do anything to get started", including low-level use of free technology, such as improvised websites and initial customers, preferring to plan for pie-in-the-sky everything-must-be-perfect-before-we-move. Did we work together? Yours failed for the same reasons the dotcom startup I was with failed ... they weren't content with having a decent product. The founder stalled and waffled and never committed to anything. He could have had a really good system for the Fortune 5,000,000 (the millions of small businesses) but he had visions of being a Fortune 500 supplier and failed at it.