…A curious episode, in some respects; the only one, of its peculiar kind, that has occurred in the land; and the only one, indeed, that is likely to occur in it…These were “flush times” indeed! I thought they were going to last always, but somehow I never was much of a prophet.
--Mark
Twain, “Roughing It” (1872)
William Daly, the campaign
manager for Al Gore, was on TV a lot during the big Florida recount show down. But I saw him about eight months ago, while
he was still serving as the Secretary of Commerce. He and New York Congressman Charlie
Rangel were up at 125th
Street and Lenox Avenue in Harlem to celebrate the imminent arrival of
UBO.net. UBO (or Urban Box Office) was
going to be moving its offices from Chelsea to this “empowerment zone” in what
was hoped to be the first step toward a technological renaissance in a section
of town that up until then had been left out of the Internet boom. In return for serious tax breaks, UBO.net
would, among other things, offer neighborhood kids access to learning and
equipment through ongoing community outreach programs.
The mood on that summer
afternoon was like a religious revival.
Hundreds of people, along with television cameras from all the local
stations, crowded together and cheered speaker after speaker who sang the
praises of this new company and of the new spirit of optimism swelling up in
Harlem. When it was over, a band
played, hands were shaken, smiles exchanged, and good luck wishes were given to
the young leaders of UBO. Then the
dignitaries got in their limos, the commoners on their subways, and the folks
from this Internet start-up were left basking in the afterglow of this huge
dotcom Christening.
Before the year was out,
Urban Box Office was out of business. No
one cared about hip hop on the Web. Not
enough people anyway to justify more cash infusions by increasingly cautious
investors. The poor guys never even moved
their offices out of Chelsea; and the children of Harlem are no better off
today than they were when all the pomp and promises were dumped on them last
summer.
UBO is just one of many
dotcom companies who have been going down in bunches lately. Companies are shutting their doors
daily. To call these places companies
might be a misnomer. They were more like
rough ideas with lots of money behind them.
At the beginning of last year, I interviewed for job at
Pseudo.com. They were hoping to be the
first television network on the web. That
sounded neat. And besides, I was not
immune to the idea of great riches. For
a few days, like Mark Twain during the Nevada silver rush of the 1860s, “I succumbed
and grew as frenzied as the craziest.” But,
it turned out, that more than any other company I know of, Pseudo.com
represented all that was silly and arrogant about the first generation of Web
startups. I showed up in a suit for the
interview and was greeted by a receptionist with a nose ring and a very
serious-faced guy Rollerblading around the lobby. Later I learned he was one of the “creative”
guys on the team who liked to relax and think by turning the office into a
skating rink. But if anyone cared, no
one said a word. Hey, this is a
party. “We’re turning business on its
head.” It’s a revolution and the suits
are gonna see that this generation is really different. Of course, not many people were tuning in to
Pseudo.com. But that didn’t matter. “We’re building our brand right now.” When I
politely questioned some of the assumptions they had made in their business
plan, a senior “executive” told me, “Hey…some people just get it and others just
don’t get it. We want people who get
it.”
He got it all right. A pink slip, that is. Last September, Pseudo.com shut its doors for
good. I wonder if that “creative” guy on
Rollerblades is allowed to glide around the floor at his new job at TGI
Fridays?
Quite
by accident, I moved up here just before the Internet frenzy and was lucky
enough to witness its dramatic birth.
There was a time when one could eat for free every night, just by going
to launch party after launch party. A
vice president at an Internet start-up was a person to be admired, even
envied. Now, when someone tells me they
work for a start-up, I think, “Oh…that’s too bad.”
And
it really is too bad that people are getting laid off. It’s always sad when one is thrust into
financial uncertainty. It’s not just greedy,
creepy arrogant SOBs who are being shown the door, but regular, good people,
too. People who believed in what the
company was trying to do. People who
believed in their constantly reassuring leaders. People who were willing to work long hours on
the promise that someday they’d be rewarded.
Now these people are gone—at
least as I knew most of them, which was in their email incarnations. Every week, for the past three or four
months, a half a dozen emails come back to me as “undeliverable.”
These weren’t bad
people. The bad people were the
ill-prepared, comically-confident reckless executives who played these suckers,
then cashed in their stock before the company went bust. Right now they’re living in big houses in
Mountain View and Westchester that are bought and paid for, while the
entry-level and middle-management schmoes with worthless options and rents
coming due are posting their hopes on MonsterBoard.com. True, there’s no law against getting rich
like this. But it would be a noble
marketplace, indeed, if leaders shared the fate of those in their command.
This
speculative fever is not new in America.
Take this description of the afore-mentioned Nevada silver rush of the
1860s as found in Mark Twain’s, Roughing
It:
…The thousand wildcat shafts burrowed deeper
and deeper into the earth, day by day, and all men were beside themselves with
hope and happiness. How they labored,
prophesied, exulted! Surely nothing like
it was ever seen before since the world began.
Everyone of these wildcat mines—not mines, but holes in the ground over
imaginary mines—was incorporated and had handsomely engraved “stock” and the
stock was salable, too. It was bought
and sold with a feverish avidity in the boards every day. You could go up on the mountainside, scratch
up a “notice” with a grandiloquent name in it, start a shaft, get your stock
printed, and with nothing whatever to prove that your mine was worth a straw,
you could put your stock on the market and sell out for hundreds and even
thousands of dollars. To make money, and
make it fast, was as easy as it was to eat your
dinner.
Sure
enough, the silver market collapsed, and Twain left Nevada no richer, but a lot
wiser. (And with plenty of good stories
to tell.)
Like Mark Twain, the rumors
of the death of the Internet economy are highly exaggerated. Just as the greedy, arrogant, unskilled VPs
of startups-gone-by were annoying, so too are the reporters and commentators
who are preaching their I-told-you-so doomsday nonsense. We have swung away
from the overly-confident to the overly-cynical. The truth is somewhere in the middle.
The bad guys were the greedy,
unskilled CEOs. For the most part, they’re
all gone. Now the sound use of the Web
as a business tool can begin.
The “curious episode” is
over. It will all be much better from
here on out.
Jim Sosnicky
