I woke up this morning and I offered up a little prayer on behalf of us all: Dear God, please give us another tech boom. We promise not to piss it away this time.
Eighteen months ago, you could have convinced investors to fund a start-up that sold cement blocks online. Today, any investor with money left looks with pity upon desperate Web entrepreneurs extending their empty tin cups—if they bother to look at all.
It has been a year since the bottom began to fall out for tech stocks. In the time-honored media tradition of exploiting anniversaries, I am taking this opportunity to mine this astounding reversal of fortunes for clues about what happened—and, more important—who we can blame for the demise of a damn good party.
I knew the tech stock crash was getting serious last fall when I overheard a political conversation at the Bellevue Larry’s Market deli counter. Says one tech worker to another: “Dude, you’re not worth enough to be a Republican anymore.” Since then, other (admittedly unscientific) indicators confirm a downturn in blue-sky optimism among local techies:
A dramatic change in dinner banter. A year ago people smugly made thinly disguised references to their riches (“My accountant is so worthless!”). Now they talk about how they made 10 bucks on eBay.
A jump in the number of local firms featured on FuckedCompany.com. Also known as “the dot.com deadpool,” this is where my next-door neighbor learned that her employer, Drugstore.com, was about to ax a slew of employees—including her.
A renewed enthusiasm for higher education. The University of Washington Business School is receiving five times the usual number of calls for MBA applications. Ten bucks to the first person who can calculate the percentage of inquiries from people whose firms appear on FuckedCompany.com.
In case you are still deluding yourself that a tech turnaround is just around the corner, let me sober you up with a survey of the mounting carnage here and elsewhere:
1. Industry-wide layoffs. Across the country, tech giants such as Intel, Cisco, Nortel, Dell, 3Com, and Motorola have slashed workforces since the turn of the new year. In San Francisco, once celebrated as the poster child of the New Economy, more than 270 dot-coms have shut down since January 2000—70 percent of these in the last four months. There have been an estimated 66,000 dot-com layoffs nationwide since December 1999, roughly 8,000 of those here in Seattle.
2. Emptying office buildings. These closures and layoffs have led to a rapid emptying-out of office space. In Seattle and Bellevue, dot-com companies have abandoned an estimated 1.3 million square feet of office space.
3. Booming business for tech auctioneers. Cowan Alexander Equipment Group, a Bay Area auction house, handled 21 auctions for defunct dot-coms in the first quarter of 2001—and has another 20 or so stacked up. Items for sale include computer equipment that never made it out of the box and assorted tech-company toys such as foosball, pingpong, and pool tables.
Net Pain, No Gain
Back in 1998, Forbes reported that there were 195 millionaires per square mile living on the Eastside, where many new Microsoft millionaires chose to make their homes. The average home price in Bellevue jumped nearly $140,000 in the last decade, from $192,800 to $333,000. In 1999, Amazon CEO and New Economy mascot Jeff Bezos was named Time magazine’s Man of the Year.
Somewhere along the way, the notion of retiring obscenely rich and early went from being a dream—on par with winning the lottery—to an expected outcome of high-tech employment. That was the beginning of the end. People started ill-conceived companies, took ill-fitting jobs, and abandoned ill-paying careers not out of passion for their new work, but out of a conviction that it would make them a gazillionaire.
And Woe It Goes
Little wonder we are left feeling hollow and disoriented now that the wildly lavish tech rave is busted. Now that tech fortunes have evaporated, firms have vanished, and pink slip parties have replaced IPO bashes, it is clear we have only our own unbridled expectations to blame for our current disappointment.
OK, and those greedy Wall Street bastards. But I digress.
The New New Economy—a sober, cost-cutting, and more traditional way of doing business—promises to be a lot more demanding and a lot less glamorous. For a city that has grown accustomed to stories of mushrooming wealth and skyrocketing home values, adjusting to this New New Economy could be like squeezing into jeans that are three sizes too small: painful, depressing, and, well, humbling.
I know we all deserve better, so tomorrow I will offer up another prayer: Dear God, please give me a chance to prove that winning the lottery won’t spoil me. Yeah, real spoiling would require another tech boom.
Annette Hamilton, an Internet-industry consultant and writer, is a former columnist for Yahoo! Internet Life magazine and ZDNet.
