…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.