Tech's Reprise Invites Query: What's New?
By Shannon Henry
washingtonpost.com
Thursday, February 12, 2004; Page E01
There's a sense of déjà vu these days in high-tech corridors. Hopes are raised that a possible Google public stock offering could ignite the tech IPO market the way Netscape did. Some well-funded new technologies, such as online social networks, are fun, but as a business prospect they seem kind of silly. To top it off, Red Herring and the Industry Standard have risen from their graves to chronicle it all again.
No wonder many of those involved in the boom and bust of the past technology decade have a been-here-before feeling. Even many of the faces are the same. After all, the Nasdaq crashed not four years ago.
The big questions are whether anyone learned anything from the last go-round and how this time might be different.
From Boston to North Carolina to California, there are glimmers that technology business is "in recovery," a term appropriately evoking emergence from a calamity -- or addiction. It's why the Industry Standard has suddenly popped up again online and Red Herring has relaunched its Web site and conference business, and plans to start publishing a monthly glossy magazine in October.
"The story is becoming attractive to people again," says James Daly, editor in chief of the new Red Herring, based in Mountain View, Calif. Both that magazine and the Industry Standard became fat and happy during the Internet boom but were shut down as advertising revenue dwindled. Daly says Red Herring is making a comeback because Silicon Valley, in particular, is "marching on." He has seen these cycles before, having covered the tech world since the '80s, founding Business 2.0 and writing for Wired and Forbes before joining the new Herring in September. But it's not just about the Valley, he says, it's about how technology is still changing the world. (Sound familiar?)
Some are skeptical of the recovery, like venture capitalist Frank Adams of Grotech Capital Group in Timonium, Md. He has yet to find the "next wave" of technology -- though he has been looking -- and he wonders if those jumping back into the game even remember the mistakes that were made. While some may recall being burned by a hot stove, they're now reaching for it again, he says. Adams is already starting to see new companies that value themselves at enormous -- what he sees as ridiculous -- prices. "What may come to pass is [that] there were no lessons learned," Adams says. "It worries me a lot."
Still, there are aspects of this phase that already feel dissimilar to that of a few years ago. Daly points out that few people are willing to work 90-hour weeks anymore, and that the life-work balance took on new meaning as people went through drastic ups and downs and began to think about the world outside of technology. That means things are moving a lot more slowly, and more deliberately, than in pre-crash times. Serial entrepreneurs are being choosy about their next gig, and launches of new software and even magazines (Red Herring has been rolling out parts of its new offerings for months) have more of a toe-in-the-water feel than a first-to-market immediacy.
"The tech sector will be different" in Washington this time, says Bobbie Kilberg, president of the Northern Virginia Technology Council. Washington's "recovery is pegged to the government market," she says. And as dull as some of it can be, this is the kind of work technology companies in the region know how to do best. It's a return to Washington's technology roots. Hotshot entrepreneurs who wouldn't have given government work a second look in 1990 are now clamoring for it.
Kilberg does think some lessons were learned. "There's much less hype about new technologies," she says, pointing out that people are talking about say, nanotechnology, but not as if it's the second coming. "It's a different mentality . . . a more cautious approach." Kilberg notices a difference, too, in what kinds of council events now draw the biggest crowds. "People are coming back out again if they will learn something that will impact their business," she says. They want to hear specific advice and meet useful contacts. About 140 new members joined the council in the past three months, while at this time last year it was a struggle to get about half that many.
Kilberg predicts employment numbers will rise over the next year, putting the region into a real recovery. Things will become "frothy" again, to use another buzzword being batted around to describe the headiest of the frenzied time.
Daly, for his part, doubts it. "You won't see 18-month-old companies headed by 23-year-old CEOs with $1 billion valuations," he says.
Of course, even if we do, that would make for an interesting story.
Shannon Henry writes about Washington's technology culture every other Thursday. Her e-mail address is henrys@washpost.com.
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