Friday, April 14, 2000

The Cyber Scene in Seattle ~ by Larry Sivitz and Soula Jones

Seattle's Own Internet Mod Squad

Although it has received little media attention, the Seattle Online Network (SON) is the place to see, and be seen, if you're launching an online biz or looking to hire/get hired. SON now has close to 500 members, most of them corporate. To put that in perspective, the Society for Internet Advancement in San Francisco (SAISF), a similar non-profit org, has up to 600 members. What's more amazing is that SON is less than a year old and doesn't have an office. It's run by three marketing wunderkids in their spare time: Tim Reha, Dan Sundgren and Kristine Asin. We caught up with Kristine right before she left to spend four days in Sun Valley (in a yurt, four miles from nowhere). "We want to be THE place in Seattle where people come every month for great panel discussions and to network with some of the top local Internet companies and startups. Our main focus is on networking, which involves throwing good parties, serving drinks, and limiting the formal panel discussions to an hour or so."

Living Large and Loud

"Party with Us in a Shower of Golden Glitz," said the official invite to Loudeye Technologies' IPO bash. Hmm…Have the words "golden" and "shower" ever appeared in the same business-generated sentence? But Loudeye (NASDAQ: LOUD) always does like to push the envelope.

Arguably, it is our most-stylin' local Internet company. And Loudeye will be relying heavily on the music and film industries to make money. It takes music and film (in digital or analogue form) and gets it ready to "broadcast" over the Internet. It's a production house, if you will, with major backing from major Internet (AOL and Microsoft) and entertainment giants. At the I-Spy club on Fifth Ave., projectors beamed "Loudeye" outside and James Bond and Bruce Lee flicks inside. There was a line to get in, bouncers with black T-shirts and headsets. People in gold body paint, biker boots and gold lame roamed the crowd, pausing occasionally on a lighted edge upstairs to strike uh…revealing poses. Three bands--Basement Jaxx (grunge), Pink Martini (salsa) and Super Diamond (Neal Diamond covers)--played to a buzzed, enthralled audience, some of whom may have been conceived to the latter songs. "This is the beginning of some serious, difficult work," a Loudeyeian exec in her mid-30s told us. "We will need to be very responsive to our customers to succeed."

Speak Softly and Carry a Big Demo Club

Some people snickered when the Speakeasy "cyber" cafe opened in Seattle a few years ago, featuring computers, coffee and Internet connections. Tres chic. Now, who's laughing?  On a recent Monday night, the place was filled with about 100 entrepreneurs, venture capitalists and angel investors mingling under a disco strobe that flicked light over the handshakes and introductions. As bartenders poured beer and wine, aspiring dot-commers made their pitch to executives, under a pounding Techno-beat. It was appropriately hip, exciting and intent - like the Internet itself - on bending the rules.

Sponsored by a group called the Demo Club, the networking event attempts to put entrepreneurs on more equal footing with investors. Forget the boardroom; the barroom is where it's at now with the Seattle Internet set. "Investor or entrepreneur?" visitors were asked as they entered the dimly-lit cafe just north of downtown in the trendy Belltown neighborhood. Investors were handed gold-trimmed nametags; entrepreneurs wore red. Demo Club was founded by Long, Joanna Alexander of the Seattle-based 3-D computer game company Zombie Studios, and Byron McCann of Ascent Partners, a Seattle-based investment bank.

The club competes with several similar events in town, sponsored by Northwest Venture Group, Alliance of Angels and others.  Long, who hosts the get-together at the Speakeasy has noticed a change in the investment landscape since the Demo Club launched in October.  "Our goal when we started was to attract the Amazon, Microsoft, RealNetworks kind of person who had never invested before," Long said. "But now we are attracting all kinds and all types of investors."
"We are getting a lot more venture capital firms sending representatives," he said. "They aren't investing necessarily, but they are coming to get a feel for what companies are out there and because they can breeze in and get demonstrations from six companies and be out in a hour."

Yep, We're All Pulling Down A Cool $350,000 a Year

Last Sunday, a front page Seattle Times story reported that employees in the local software industry make on average an estimated $350,000 to $400,000 per year. The article went on to speculate about how a prolonged drop in Microsoft stock might affect the lavish spending habits of local multimillionaires, and wrung its hands about the ripple effect any ebb in such spending might have on our regional economy.

While many high-tech workers are certainly paid well, the Times failed to note that this average wage figure is skewed sharply upward by a relatively small number of workers who can exercise millions of dollars in stock options each year, or that most workers in the state's software industry make nowhere near that amount. The research also only includes the approximately 24,000 workers actually on the payroll of companies that package and sell software; it does not include thousands of other workers employed in the state's software industry.

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