After the Goldrush - Still (Not So) Crazy After All These Years

Friday, December 12, 2004

A Review of the Town Hall meeting with Razorfish, Bolt, MTVi etc.
By Alan Brody

The Producers Guild and National Academy of TV's New/Advanced Media groups had the bright idea of bringing back some of the Silicon Alley "stars" of the bubble years for a Town Hall type chat.What do you say, after all we’ve been through, to see familiar figures like Razorfish founder, Jeff Dachis, Bolt’s Dan Pelson, MTVi’s Nick Butterworth and Silicon Alley Reporter’s Jason Calacanis in a respectable but less-than-filled auditorium, 5 years past their heyday?Like the rest of us, they looked a tad paunchier, a little thinner on top. But most of all, they didn’t have their game faces on. Without that bubble attitude, the swagger, they were just 5 guys you might see on the subway.Still, if you could deal with the anti-climax, and some couldn’t, there were lessons to be gleaned.As the conversation moved from insider banter, which sounded like a Silicon Alley High School reunion to an analysis of lessons learned, the mood turned to a refrain of "oh, how we miss being a revolutionary."

Lesson no. 1: Being part of a revolution makes you feel special and it shows.
It may happen only once in a lifetime but it defines life for you – being a player in a big movement. On the other hand, dealing with the post-revolution blues, is another story. Most of the panelists admitted to experiencing some kind of depression and you can understand why: You were also struck how the early movers, the ones that got it right at the beginning, made a lot of money. Razorfish’s principals were already millionaires by 1996, thanks to a capital infusion by Omnicom. By 2000 the company had thousands of employees with office in dozens of countries and had a market cap of over $6 billion. Very heady stuff for 20-somethings. Naturally, they all longed for the days, but the canny ones still get to dine out on it and it will be their calling card for years to come as the internet continues its path to becoming mainstream. Broadband is now standard, which means so much of what they anticipated is finally real. The group still believes great fortunes can be made but few were brimming with the possibilities of yore. Today, a new generation of kids has arrived that are totally net-savvy. 18 year-olds can make and cut movies, 12 year olds are online and IM’ing as if it were the air they breathed. Yet the group seemed to speak as if they might have become too old for much of this…..Like science fiction writers, they seemed to lose enthusiasm as fiction become fact…..

Lesson no. 2: When you are no longer the erupting volcano, find someone else's and charge an entrance fee.
Of the four original dotcom players. Only Calacanis is in the dotcom business - aggregating other peoples’ blogs. Butterworth is distributing other peoples’ content on DVDs, Dachis is buying up old-fashioned cash-positive businesses and Pelson is walking his dog and doing some investing.The Entrepreneurial spirit is by no means dead but is now looking to others for guidance. As we’ll see form lesson no. 3, it is not who think.

Lesson No. 3: No one loves VCs after the fact.
Except for Calacanis, who took money from TV’s "The Benefactor," Mark Cuban, no one had a kind word to say about VCs and all encouraged the audience to avoid them. The fact is, Wall Street, lawyers and VC are accused of having made "the money" and also for hyping the industry in such a way that it lead to the crash. Perhaps. But it is worth noting that experienced entrepreneurs encourage you to stay away from investors for as long as possible. Forever, if you can. Apparently, owning your own thing is worth more than becoming a billionaire because you tend to stay on, you’re in charge and you feel good about it and you’re more likely to keep what you made.There is also an underlying resentment of corporate culture. Most panelists spoke glowingly about open source computing and the beehive model of work - a kind of libertarian environment where everyone is bound by enlightened self-interest to take on tasks for a common cause, providing their work, resources and skills in return for ways of making their own money. Pro or con, this may be a true phenomenon because it ties into the decentralization of cities, the universal connectedness and the rugged individualist-beatnick-hippie-libertarian ethos of the Internet. While most of the panelists agreed there is no reason for the business to be in New York from a technology or content point of view - what with real estate prices and all – New York remains a lifestyle choice. It is also the place to be when you want to sell something, especially if you are going after corporate America

Lesson No. 4: Its not about the money, its about the ride.
This flies in the face of everything you learn in business school (which no one went to or if they did, they claimed helped them not at all, as entrepreneurs). But it’s true. Even Donald Trump says, if you don’t like a business, don’t do it. You won’t succeed and if you do you’ll hate it and act in some way to undermine it. The entrepreneurs claim they were driven by the fun, the discovery and the chance to take on the big media, especially broadcast. There is some classic Freud here (as in, "every son want so kill his father") but it is also the truth. On the other hand, if they weren’t concerned with money, you wouldn’t have Dachis giving advice like: "make sure you make money every day." It may be a complex dynamic….. but most investors agree that first there is passion and then business savvy. The business guys tend to jump ship when times get tough (it’s just about the money, right?) but the guys with passion are willing to go underwater even if they might wind up with the bends. Jeff Dachis put up one million of his own money to shore up his falling stock. He also believed that his mission in life was to keep his staff, his family, earning a living so imagine his shock when he found out they were badmouthing him on F***d Company. Passion has its limits and apparently, good VCs know how to weigh this.

Lesson No. 5: The smart person is the one who gets sober before the party is over.
The entrepreneurs always have a hard time understanding that others don’t share the love of company that they do. That’s because it isn’t their company, and entrepreneurs tend to forget that. On the other hand, the entrepreneur's passion is inspiring and the first question from the audience made that clear. A dotcom veteran of a big name company, unabashedly declared herself reinspired and desirous of getting on the bandwagon again!

Lesson No. 6: Trust Your gut and find other you can learn from
The panel was pretty much unanimous about trusting their instincts but also in finding good mentors and experienced people who could advise. Apparently, even when you’re on top of the world, asking others for advice works - is either it humbling you enough or flatters them enough that mentors will give it.

Lesson No 7: Publicity is great until it is used against you.
While no one said how great it was being invited on to 60 minutes or the Charlie Rose show to talk about the revolution, everyone complained about being blamed for the hype after the bubble-burst. ("Hey I wrote columns saying how bad it was," quoth one.) Surely, they protest too much. Of course they were part of the hype, and part of the downfall. Since they are unlikely to be sued by anyone, why not stand tough and say "we did what we believed was right. We can’t be blamed for a perfect storm or investor hysteria." What matters is they survived and basically they were right. Being the poster boy is only market crash away from being a dart board. Get used to it. Or as the Brits say, "its better to be a has-been than a bloody never was."Interestingly, a number of the panelists had recently been to China and were not quite inspired: smoggy, no eCommerce (no credit cards) and you need a general in your pocket to do business since the military runs the show. On the other hand, the Internet cafes are full and people love to play games all day long. Once upon a time these people would have seized upon that as an opportunity – eyeballs, addicted gamers, worldwide phenomenon. But they didn’t.That’s why you have to respect these guys – and yes, they were almost all guys – but the next revolution is coming from another place. Apparently they are caused by passionate people with something to prove…..and this group has proven it already.