NY's Silicon Alley Feels The Crunch 115
ephraim writes: "During the last year, I worked for dot-coms in NYC. About four months ago, I began to feel that a downturn in the industry was imminent, so I left to join a more traditional company. Far too many of the companies I consulted for seemed to have serious internal problems that appeared to preclude them from ever making any real money once their venture capital dried up. It turns out that I made the right move.
This article from the NY Times Web site (free registration required) discusses the general trends in the industry, while another article on the site looks at the phenomenon through the eyes of one employee of a doomed company. What he says about people sitting around doing nothing is true for quite a few of these companies.
While there are still plenty of jobs available for technology people in NY, those looking for work should begin to ask some more discerning questions about prospective employers."
Don't believe the hype! (Score:4)
I've been in the "dot-com" industry before it was called that (from 1995) and worked in the software biz before that. During this time, I've started a couple dot-com's in NYC. One is turning a profit. The other didn't work out and we closed it down. I've also consulted for dozens of firms large and small -- some are making money, some are struggling, some have closed up shop. BIg deal.
Is it a suprise that companies with bad business models fail? Duh. It doesn't matter how much money VC's throw at you, if your business model is flawed, eventually, you'll fail. The truth of the matter is that many, many companies get started and MOST fail within a few years. This has always been true -- the "downturn" is nothing new and simply a reflection of the disenchantment of financing sources (VC's, wall street, angel's) towards the dot-com "industry". This will turn around -- it always has. The street and VC's are herd animals. They follow each other with abandon.
One of the things that also bother me is people who say "they won't turn a profit for years!" as if that's some big suprise. The vast majority of new businesses don't turn a profit for years. Magazines typically take 5 years or more to reach positive cash flow. Electronics manufacturing is even worse. Even consulting firms (real ones, not 1 man shops), which you'd think can turn a profit from day one, often take a year or more before they stop bleeding cash. Such is business -- you can't make money without spending it.
On a side note, can you guess the background of many people at the top of the VC food chain? Most people would say "Wall Street" or "Finance" or something sane like that. Truth is, many (if not most) of the top VC's are ex-"journalists". I use quotes because many of those were that special breed that write those pontificating editorials rather than "reporters" (again in quotes because I'm using that term VERY loosly). No wonder they're (usually) so stupid.
Anyway the bottom line is that we're almost through the worst of the VC drought. How can I tell? Simple...the mainstream press is writing about it again and again. By the time they start harping on something, you know the worst is almost over.
Cheers
Silicon Alley is a techie desert (Score:5)
I spent a year and a half at a start-up on 23rd St. (just across the street from Madison Square Park). For the last six months, my title was "Manager, Content Acquisition Software"; I had about half a dozen programmers reporting to me. We shipped client software (and hardware) and ran a production service, but never signed up anywhere near enough customers to approach our expenses.
One problem was how hard it was finding good technical staff. The quality of the average candidate was pathetic. Most of the C/C++ programmers I interviewed didn't know how to do pointer arithemetic!
Worse, everyone with even a shred of talent was heavily recruited by Wall Street. The guys down there offered $100K if you could even spell HTML; but they'd expect you to show up, wearing a suit, promptly at 8 a.m. every morning, and wouldn't think twice about expecting you to work until midnight for long stretches. After all, they're paying you big bucks! (Compared to everyone but the traders.) Techies on The Street are lucky to last two years before burning out.
So where's the nearest techie oasis? Believe it or not, central New Jersey. The legacy of the Bell System, and the huge Bell Labs installations here, has created a seed of talent not often seen outside Silicon Valley. I have friends at half a dozen startups founded here, and several more at companies based in the West Coast but opening offices here to take advantage of the great people. Ten minutes to the east is the Atlantic Ocean; fifteen to the west, horse farms. If you hate surburbs, forget it; if you like them, it's wonderful. Real estate, both residential and commercial, is relatively inexpensive, especially compared to the Valley or the Alley.
Re:on the "web design / consulting firm" topic (Score:1)
Not the type that come and go!
Re:POV: Web design company (Score:2)
The site I was involved in 99% of the time was started back in 1995 and had one of the best and earliest health-releated internet communities out there. Then in July 2000, bang, we're all let go.
Now I'm doing freelance web stuff for a local Ad agency, and THEY just got bought out! However, I don't think they're quite going anywhere: too many large corporate (ie non Dot-Com) and government clients.
Now I just gotta convince them to hire me...
Pope
Freedom is Slavery! Ignorance is Strength! Monopolies offer Choice!
Check out the people and ideas behind the company (Score:2)
The reality is that the people behind most successful .com startups predominately belong to an inner circle; they generally all know, worked with, or competed against one another at some point in the past. One .com success breeds any number of other startups that all have that much more likelihood of being successful. Research the backgrounds of the company's management. Have they led other startups to success? Have they worked in high positions in other respectable companies? Have they demonstrated industry leadership skills? The more research you do, the more connections between people you will find, and it will become clearer just where your company is likely to be in the food chain.
Also, don't just jump to a company because someone makes an attractive pitch about how much funding the company has gotten, or how great its product is. Ask to see the business plan (you may need to sign an NDA), do research on the intended market, judge the company's success based on your own knowledge of the industry.
If you want to be part of a successful .com startup, you can't let someone else's vision be your guide. You need to be a part of the vision yourself and understand what's going on in the industry.
Another alley refugee (Score:4)
Luckily, like the poster, after a few weeks of a general market downturn I had a feeling the tide had turned and working at an Internet company wasn't as attractive as it had used to be. One nice benefit of the whole Internet saga is that traditional companies started becoming more casual - such as starting casual Fridays, and then casual all week. I recently interviewed at virtually every Wall Street company - Goldman Sachs, Morgan Stanley, Bear Sterns and so on - at every one of them and more the dress code for engineers and others is business casual all week. Someone here said they work you crazy hours - sure, but how is that different than a startup? Ultimately, the only solution to getting paid for the hours you work is to be a consultant getting paid by the hour. Anyone with a few years experience who is working full-time on Wall Street and is not in management is a fool, who usually has what I call a "martyr complex", or an H1-B, who is basically an indentured servant for the company.
If you are working in New York City at a startup I would strongly suggest you at least interview at some good traditional companies. Then see if they will take you and what they will offer you. If you are rejected from several places, that should be a wake-up call as to your employability if/when the Internet startups finally hit bottom and crap out. You may know that Apache is superior to Netscape and know how to modify Apache source code to do bizarre things in your sleep, but that knowledge is next to worthless in many traditional companies, your magnus.conf knowledge should be magnusificent. Only about half your skills are transportable, and you will flunk like hell when asked how EMC and Veritas Clusters work. So get cracking now.
Confucious says (Score:3)
Re:Silicon Alley is a techie desert (Score:2)
Worse, everyone with even a shred of talent was heavily recruited by Wall Street. The guys down there offered $100K if you could even spell HTML; but they'd expect you to show up, wearing a suit, promptly at 8 a.m. every morning, and wouldn't think twice about expecting you to work until midnight for long stretches. After all, they're paying you big bucks! (Compared to everyone but the traders.) Techies on The Street are lucky to last two years before burning out.
This is really exaggerated. The interview process is normally good enough to select semi-decent programmers as a minimum. Many if not all techies get to dress casual these days on Wall St, and most of them do not burn out after two years. On the other hand, $100k is NOT big bucks by Wall St. standards. If you're really good and do work from 8 till midnight a lot, you'd probably be earning 2 or 3 times that in a couple of years.
Re:Silicon Alley is a techie desert (Score:1)
Problem with silicon alley is that it dumbs every thing down to the level of a moron without a dictionary. Most people know the difference between a desert and dessert.
Been there (Score:1)
That's a problematic situation, and my approach was that I wouldn't bring it up, but if they asked I would answer truthfully. Lying to somebody I'd be working with later seems like a real bad idea.
The boss finding out is not an issue. No job seeker is going to tell him "I was interested until Joe told me you're an evil moron".
Re:youre losing dot coms because (Score:2)
Laying off the wrong people... (Score:2)
Managers have extremely inflated salaries, artificial authority, and usually know far less about the work they're managing than the employees in that department.
Why do companies do this? If you're losing a lot of your staff, you would need LESS managers since the displacement from the president should logically decrease as people leave.
Ho hum
Re:Agreed. This industry will see huge growth. (Score:1)
Or it could lead to a horrible economic depression that turns into a new Dark Ages and results in the acension of the anti-Christ.
Re:Thats contrary to what everyone I know has seen (Score:2)
Not to name names too much, but at Ars Digita, which until recently had a fairly aggressive recruitment policy, there are no openings [arsdigita.com] for development engineers at the moment. Granted, they are in web development, but a shortage of openings there and at related companies must be having some kind of effect on the job market overall...
just my 0.02...
Very good point. (Score:1)
Just as most startups fail so does the dot com world. Its just a bit more dramatic this time.
Just smile. The pain is normal.
Two Ends of the Spectrum (Score:1)
On the other end of the spectrum we have the more traditional business models. Or maybe it's 'model' singular. The pervasive belief that the Internet would grow to be nothing more than an alternate form of television or newspapers. Thus, you could make a ton of money by advertising. NOBODY likes internet advertising except for companies doing it like DoubleClick, the ever-clue-phucked AOL users (who have no idea what the real Internet is capable of) and site operators who actually depend on advertising revenues to stay afloat (nice knowing you - see you around - if you thought that was sustainable you should be flipping burgers somewhere). The latter are probably going to be the next sites to fold up their tents and go home. It has been said that the Internet treats censorship as a fault and tends to route around it. The same is true for advertising. There are a ton of programs available that let users bypass those annoying banner ads. That model was never going to work, either. I hope DoubleClick gets their asses handed to them on a silver platter and that apparently is about to happen. The sooner the better, IMO. Their earnings problem will send their stock dropping faster than Wile E. Coyote off the edge of a cliff holding onto a ten-ton boulder. In fact, aren't there now reports floating around that web-based advertising is an across-the-board failure?
The upshot of all this is the Internet is neither television, nor radio, nor print media The true value of the Internet has yet to be realized. The really innovative and workable business models have not been invented yet. They lie somewhere between the two ends of the spectrum, with the truly far-fetched no-effort bullshit sucker IPO mentality on one end and the traditional advertising revenue stream models on the other. With all that being said, however, this phase we're now nearing the end of was inevitable. A necessary part of evolution and ultimately survival of the fittest. At long last we're seeing the unequivocally "good" result that these flawed models are being flushed out of the system once they're shown to be total garbage. My only regret is that I never cashed in on my idea for the Internet pooper-scooper. I probably could have sold that concept to some clueless VC guys 2 or 3 years ago and then I would be sitting pretty.
Re:fine arts BAH! (Score:1)
Re:My first week.. (Score:1)
Re:I don't believe it (Score:1)
I'm looking for a PT person in Boston... (GNU) (Score:1)
Ah, yes, the shameless promotion. I put GNU in there because "working in free software" wouldn't fit. ;-)
I'm looking for someone who is local in Boston, starting out at part-time, to do some Debian GNU/Linux (and, sometimes, RH) hacking and a few other business-oriented things. Basically, I'm severely overworked and need a partner in kr1m3 to lend a hand in a lot of different areas. Even if you can offer help as a consultant, that would be cool.
If you're interested, please drop me a line. Many thanks.
Re:"Baby Boomers"? Please. (Score:1)
Re:Naivety never pays... (Score:1)
Re:Laying off the wrong people... (Score:1)
Did the management who were fucking up get their overinflated salaries cut? No. But it looks like they're considering killing off my entire office, even though we were doing about 75% of their actual R&D. All they see is a bunch of 'whiners'.
Hell yes, we're whining. We're whining because you guys have your heads up your asses, and you haven't bothered to send people from the head office to find out what our concerns are (or rather, you didn't until after the layoffs started). OF COURSE we're going to bitch about it.
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Re:Tidbits from Boston (Score:1)
Perl skills a must.
On-line references preferred (i.e., links to web sites or open source/free software projects you've worked on).
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Re:Gimme that +1, Informative! (Score:1)
Your Al Gore-like hyperbole only serves to discount the message you're trying to convey.
As far as your personal attack on me (I'm assuming that's not your sig), go fuck yourself. I was attempting to be helpful.
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Consulting, baby (Score:2)
For the past year or so, I've been doing consulting work. This is the best time to do it... all these dot-coms flush with money, looking for a place to spend it. I've mostly been working as a sub-contractor for another consulting company, which means I don't have to do my own marketing. Although my hourly rate is bit lower, they can fill my pipeline with as much work as I want.
As for benefits, I would recommend anyone who wants to do this to wrap themselves in a sub-S corporation (Oh no! Not an evil corporation!). You can set up medical plans, 401Ks, even profit sharing plans. My accountant has said the latter are actually better than 401Ks for tax-deferring savings. He is supposed to give me the details in a few weeks. I don't pretend to understand tax policies (and don't want to).
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Re:POV: Web design company (Score:2)
I like that point a lot, and just want to echo my sentiments. I worked as a sysadmin for a year for a nonprofit organization -- I worked with fantastic, passionate people, got to do lots of fun tech work, and made enough money (not dot.com style cash, but not dot.com style hours, either).
Now I'm in grad school, doing occasional tech stuff, and I only occasionally feel envious of my college buddies who are off at startups. I can do the tech stuff I like and enjoy, without the pressure of the Technology Scene.
-schussat
Re:Talk To Employees (Score:2)
At the interview, I was not asked a single question pertaining to web design or my skills! (example: "Where do you see the Internet in five years?") The interviewer - a techie himself - was fumbling for questions. Who knows if he even looked at my portfolio. I didn't have to turn them down, because they hired internally - a programmer with no design experience. Go figure.
Agreed. This industry will see huge growth. (Score:2)
This downturn could turn into a recession that lasts two-three years - during that time most investors will be scared off of the tech market. Those who stay long in this market are going to reap huge rewards.
This is just a bump on the road to a tech-dominated economy.
Plan A Failed ... whatever happened to Plan B (Score:1)
If you're gonna make it in the real world you got to have your basic strategies plotted out and for God's sake if you are going to go with a Plan have a backup Plan
The problem isn't central to NYC (Score:2)
Each one has been fucked in its own special way, which just goes to show that there's more than one way to unsuccessfully skin a cat. It will be nice when the rubble settles, though; the companies that last will hopefully be the well managed ones that provide usable, valuable services... and people will have to know a little bit more than Dreamweaver/Fireworks to get hired as Web Designers/Developers.
Re:Doubleclick (Score:1)
Re:Far too many .coms use the IPO business model. (Score:2)
If it does well, as sole stockholder of the corporation, I will reap all the rewards. If not, oh well. I'm not doing it to make a quick buck and disappear; I'm doing it because I have worked in publishing for a long time, it is something I truly enjoy, and this is a lot cheaper to start than publishing on paper!
Re:Shouldn't you do that with any company? (Score:3)
Partially a reply to the parent, partially a reply to the AC post that will probably be modded down:
I have found two ways to deal with this (very real) issue: First, you can go ahead and ask the "poor employee" and watch for his/her body language. Does she pause before answering? Does she get nervous? Stop making eye contact with you? Lower her voice? Suddenly become busy? Or does she answer immediately, confidently, and maintain eye contact? Body language can say more than her politically-correct response.
If you can't interview other imployees during your own interview/tour (not always an option -- one place I interviewed, I only experienced the lobby and the first conference room off of it), see if you can get the name(s) of other employees working there. A few hours/days after your interview, call the company and ask to speak to ($nameOfEmployee). Depending on your "feel" of the company, you can either be straightforward ("Hi, my name is So-and-so, and I interviewed at Company X a few days back, and I was wondering what you thought about your company..."), or you can be secretive ("Hi, you don't know me, but I'm considering working for your company. I know the environment might be sensitive, so you can just answer me 'yes' or 'no,' okay?...").
Admittedly, sometimes neither option is available. Then you have to rely on other sources, such as investor information (check SEC filings if it is publicly traded or about to be).
But for the love of Mike, don't walk into a company blind. It is quite literally like walking across the Interstate with a paper sack over your head.
As if it needed to be said... (Score:1)
I'm seeing the dot com I'm working for now going down...slowly, maybe, but definitely sinking. I'm all for working for a 'traditional' company next time around - sure, the pay isn't cutting-edge and the technology may not be, either, but they have different values themselves. Training, for one, and a long employee lifespan...it used to be that 10-15 years at a company was considered good...in the dot-com world, 2 years is an accomplishment.
Naivety never pays... (Score:3)
I am a founder and principle in a company that provides qaulity assurance consulting and outsourced testing services to North American companies. And having worked with companies all over the continent, what's happening in NY is happening everywhere...
We have done a lot of work with a huge variety of companies including many dot.coms. Some of the business management and technical management practices I have personally seen have both amazed and disgusted me. New office space = party. Sure, it's great to have a party for your clients, associates and friends. But why on earth would you spend upwards of $25K on a party?!? That's 5 to 10 employee salaries for the month. Maybe that's your rent cost. How do you explain to the 7 employees you lay off next month tht you can't afford their salaries because you had a party? If the company was a brokerage firm or any other comparable service firm, would you have spent a similar amount on your opening party? Having a great culture for your employees is important, but it can't be all consuming. Your employees don't care one whit if you buy them a hot tub if it means laying a couple off next month or bleeding money until you have to lay them all off...
We have been asked by prospective clients to perform work for lower rates and pre IPO stock options. These clients have little to no money to spend on our services. One question we always ask these dot.coms when they solicit our services is "how do you make money?" If they say "banner advertising on our site" or something analagous to BS [urban75.com], we blow them off. Not nice to say, but we're trying to improve the quality of their products and services while growing and building our own service company, not make their bottom line for the quarter look good enough to justify buying a big screen TV and SPS2.
The technical comptence of some of the programmers and designers that work at these firms is appalling. I have met "senior internet developers" who were being billed out at over $150US/hr whose code looked like it was written by a 2nd year CompSci student. I haven't coded in over 5 years, and even I could find huge gaping holes in their stuff. I am constantly amazed that some people survive in this industry, that there isn't greater accountability. One dot.com I know who laid off some people recently, including their lead developer, were forced to hire him back on because no one could decipher his code. Amazing, but spaghetti coding is making a comeback...
A side issue: asking about hours *actually* worked compared to salary is always a good idea. I see many web dev firms that pay people a pretty good salary, give them free coffee/pop/etc., buy them meals 2-5 times a week, send them to Mexico for week-long vacations as a "bonus" for meeting deadlines but do not pay out overtime or allow people to bank their hours and take them off later. These people think "wow, I make $70K a year, and I get all this free stuff" but it's the employer who's getting the great deal here: they get you to work 18hr days 6 days a week and don't have to pay you an extra cent (or any extra related taxes).
Getting involved, either as a service provider for a dot.com, or as an employee for one, you have to be responsible for your choices. If you only care about money in the short term, then go ahead and take your chances. But don't be surprised if people can sense that you carry the negative cachet of having worked at or with a failed dot.com...
Remember that for many people, it's not about the money. It's about building something you believe in, something to which you can point and proudly say "I did that." Coolness only means so much if you disappear from the high-tech landscape after 5 years... without a trace.
Re:Couldn't disagree more (Score:1)
I think a high degree of Monster.com responses can be misleading. Many, many places search for the word "Java" and send e-mail out to people blindly. ie. many of those responses are worthless, they mean nothing. How many of those are going to translate into job offers even near your range of acceptability? Very few. And you're going to waste a lot of time talking to all those headhunters and so forth (most Monster.com e-mails come from startups, from my experience). And most of those headhunters will want to MEET you before they send your resume out to the 1-2 companies looking for java developers they have lined up.
I'm saying all of this because the same thing happened to me - I got a ton of Monster.com mails, and 99% of them were junk. Some of them I had to waste a lot of time with before realizing they were junk. One interview I went on solely for the fact that it was obvious that the person had actually read my resume - after being flooded with junk it was a good sign (when I went to the scheduled interview, the guy didn't show up and an HR flunky interviewed me, oh well).
It's about getting big fast, not screwing people. (Score:4)
The VC/IPO route is a way to get big, fast. The Internet is the Wild West. It's a land grab. Run out to the territory, stake it out, own it. If the land you grabbed has enough revenue in it, you make a killing. The richer the land you grab, the richer you get. You can argue that the land these companies have grabbed isn't worth as much as they think, and in many cases you are right. Some of these cases, however, are going to simply mint money. There is money to be made selling things on the web.
These people who invest their money look at a company's prospects first. They estimate the worth of the territory and the costs associated with growing the company. They make an educated decision to buy or sell. Thankfully, there is no law like the one you describe. Investors don't need you to protect them. They know how to make their own decisions.
These people are not trying to inflate the values of their companies and then jump out of the plane. They are trying to grow their company fast, to take more territory and discourage competitors. They don't leave when it is done; they grow it even bigger, just more slowly.
I don't believe it (Score:2)
What downturn? I can't believe that NY inhabits a different universe to the rest of the planet. Perhaps the author was just working for a dead company.
The fact that many companies are not making money is easy to believe, simply because business managers still don't actually understand the Internet, despite their 5-year "long term Internet expertise" (ha ha, the newbies). But techies sitting around twiddling their thumbs? That seems unlikely, unless the business model underlying the company was seriously flawed right from the start.
If you're twiddling your thumbs in NY and you're really competent technically, then come to Europe, and specifically the UK. We need you.
[And you wouldn't believe the rates that contract agencies are offering!]
Re:youre losing dot coms because (Score:1)
"Baby Boomers"? Please. (Score:1)
Booms have always happened. Crashes have always happened. They always will. You and I are just as likely to be caught up in them as anyone else.
(OT, I know, but this "boomers are so stupid and I'm so smart" BS bugs me.)
Re:Shouldn't you do that with any company? (Score:2)
Re:Shouldn't you do that with any company? (Score:1)
Anyone surprized? (Score:1)
Hmm. So here's the receipe for certain DOT COM failure:
I am glad the rest of us with real jobs are paying for the unemployment benefits of Mr. Art Boy. Maybe he should have laid off the pot and learned a real skill. Oh, but we're GEN X, so we are entitled to high pay, aren't we?
"Fat, drunk, and stupid is no way to go through life."
Re:Couldn't disagree more (Score:2)
Re:Startups (Score:1)
There the point of three personality types needed to run a business is emphasised quite heavily.
The book is a great read for anyone thinking of starting a company, and those in their own company now.
There's still hope! (Score:2)
--
Lawrence
We now return you to your regularly scheduled chaos.
Welcome to Silicon Alley (Score:2)
But hey, it sure looks cool when someone with a degree in fine arts can boast about an office in Bombay or Sydney. I suspect it won't be so cool when the firms implode and shareholder/lender lawsuits ensue.
Party on, Garth!
ALERT: Warning--Warning (Score:1)
Shouldn't you do that with any company? (Score:4)
Asking the right questions and really getting to know the company and some of the employees is essential. If you have the time to actually pull a few employees aside during a whole-company "tour" before they put the offer on the table, make sure you have some to-the-point and quick questions that have concise answers. These questions can then hopefully give you a good sense of whether or not the people currently at the company feel it's going somewhere or not. Questions like, "On average, how many hours a week are you working here?", "Is your boss reasonable and easy to deal with?", "Have there been any recent lay-offs?" can really help to set things straight. Of course, if you can find ways to ask those and perhaps be a little more subtle than go for it.
In fact, I'd argue that any company that doesn't let you talk to some of you just might be working with, it's time to start getting worried.
Remember, we are in demand right now. For your own career and well-being, please do your homework before signing the big money contract because, lo and behold, the big money contract doesn't mean much when you're on the street without a job, or at a company that's poorly manage.
My first week.. (Score:2)
So I complained and was told the following:
"..your being paid aren't you? Don't rock the boat."
Maybe thats why our share price has dropped by over 80% in the last six months.
Re:Gimme that +1, Informative! (Score:1)
It is my sig, and there was no personal attack on you.
But here's one: get a clue.
This has been happening for a while. (Score:2)
Enigma
Re:Lazy New Yorkers (Score:1)
Investment (Score:1)
A lot of dot com startups have excellent ideas but often don't have the business world know how, are on a shoe string budgets.
I think it would be worth it for some of these guys to knock their heads together to create some real KILLER dot coms that may actually do something beneficial to humanity with their ideas!
Good ideas, Too early (Score:2)
And the bottom drops out... (Score:1)
startups (Score:1)
Far too many .coms use the IPO business model. (Score:4)
This is a pretty pathetic business model, if you ask me. Is it so desireable to become filthy rich that you screw over your employees and investors? Is it okay to create a company that you know is doomed to fail within a year after it goes public?
The current laws prevent people from selling out right after IPO, but perhaps it should be lengthened even more for the top shareholders, just so that this model becomes undesireable.
Startups (Score:5)
1) A "Visionary"
2) Someone with technical know-how
3) Someone with business sense.
This isn't unique to dot-coms. It is true for any sort of startup.
Apple, for example, had Woz (2) and Jobs (1 and 3).
Most of the dot-coms that go under have a (1), some have a (2), and few, if any, have a (3). That's why they fail. And the truth is, the earlier they fail, the better, because the bigger they get, the more investor money will vaporize and the more people they'll throw out of work.
For some reason, dot-coms got a free pass over the last few years, which is unfortunate. It is fortunate that this now seems to be ending because the dot-coms that do survive will be the worthwhile ones.
This is not very helpful to someone out of a job, I know. I've been thrown out of work when working for a (non-dot-com) startup as well. So take it as a learning experience, and when you look for your next job, look for Mr. (1), Ms. (2) and Mrs. (3). Because there are some dot-coms out there that will succeed.
In the '80s, there were a lot of young, hi-tech startups, too. I had the misfortune of picking two that failed. One had only a (1) and the other had only a (3). Other people picking startups in the same era ended up getting in early on Dell or Oracle.
There Dells and Oracles right now. But there are 10,000 dot-coms and there can only be a couple huge sucesses.
the problem (Score:1)
Also, has anybody stopped and checked to see how many regular business startups have flopped in the same amount of time? That'd be an intersting comparison to see if regular business startups flop more/less than dot coms.
Tidbits from Boston (Score:4)
Two consulting companies which friends of mine work or worked for have each laid off web development people in the triple digits within the past month. I believe that in both cases, this included programmers. My roommate's company, which is exclusively devoted to web development, has put a hiring freeze on programmers.
A fourth company I know of is suffering from lost business, because even though big corporations still want good websites, with the .coms failing, there is less pressure on them to get them out there. So there will be business in the next 2-3 years for web development from the big companies, but it won't match the boom we've already had.
If this is the anecdotal evidence I have on hand, it makes me wonder how bad the overall scene is. I think that the HR departments for "solid" tech companies must be getting swamped with resumes from all the people losing work from the .coms. If I weren't looking for work at the same time, I would find it merely interesting...
Re:startups (Score:2)
In actuality, i don't think than many of the dotcoms were good ideas to start out with. Especially the whole ecommerce crew. They sprang to life and prospered for a time only because the company's whose products they were selling took their time embracing the internet. But once it was realized that there was money to be made, and that money was going to the dot coms who essentially stood between the supplier and customer in all the transactions. They just realized that they could do it themselves and then take in the dotcoms revenues as their own and raise their margins...
Onsale, Outpost, Buy, Shop, Amazon, and there's only hundreds more... Ebay at least enables people to do transactions they could have never done before, where as the the rest moved the middle man from being the cataloger to the dotcom.
Re:POV: Web design company (Score:1)
Could you please email me. I'm curious who the meticulous company is. It seems implied they may be a medial company. If they are I'm really curious who they are.
Thanks
yeah, what else were you expecting? (Score:3)
pseudo.com is an interesting story, but don't call them a victim of the dotcom backlash... they got $15 million in funding and by all accounts ran a crash-pad for slackers, hackers, artists and assorted counterculture types, all the while putting out the odd piece of web-based entertaintment, until the cash ran out. Then they closed their doors. Surprise? Hell no. I say good for them, personally. Wish I'd pulled off that hack. But they hardly count as a failed company. I don't get the sense they ever really wanted to be a company. Andy Warhol's Factory is the comparison I've heard more than once.
Any company that thinks that the Internet economy has invalidated the terms "profit" and "return on investment" will of course wake up fast.
I consider myself part of the whole dotcom thing-- I consult in NYC on web design and programming, and I'm still turning down about 5 job offers a week. I just took a position with a design firm that focuses on top-flight clients, thinks internationally, and has a realistic business plan. I don't fear for my future.
Six months ago, we had one young woman who joined us, and spent most of the day chatting on the web with friends, arriving late and leaving early. When confronted about her slacking, she actually said, "It's the New Economy! Hours are flexible!" She was fired two weeks later.
The dotcoms that are going under are much like her, thinking that the New Economy rules mean that they can do whatever they want and still exist. But the new rules are really just a slight (albeit revolutionally important) modification to the old rules. Y'know, the ones where companies make money.
The sick and the weak go first, and I for one won't miss 'em.
Re:Far too many .coms use the IPO business model. (Score:1)
When did Art Director become a tech job? (Score:1)
Let see a show of hands of all the UNIX wizards with strong WAN skills out of work in New York, or San Fran, DC, Austin Texas?
all persons, living and dead, are purely coincidental. - Kurt Vonnegut
Re:Silicon Alley is a techie desert (Score:3)
Market Psychology (Score:3)
Most baby boomers have this perception that they're going to be young, beautiful and rich forever. OK maybe they're starting to accept the idea that they're balding and fat, but they don't intend to retire gracefully - they want the big house on the beach while they go swimming in crystal clear blue water, you get the idea.
In order to have the of retirement lifestyle TV is pushing and that most boomers want, you conservatively need $1-$2 MILLION in reserve. The average boomer is 40-50+ and has on average less than $2000 in the bank.
So how do you make two million in less than a decade? Buy and hold? NAH! TOO LONG! They thought they'd retire at 55! So out comes the dice to roll on the market. When Netscape blew up people smelt the kind of stratospheric success of a Microsoft. And bought. And bought and bought. And borrowed, traded on margin, and bought. Hey, every one of those stocks rocketed on IPOs. Everyone was going to get rich. Noone wanted to INVEST, they wanted to SPECULATE - who cares if the company's a money loser - the stock's going to skyrocket, and someone's going to get rich. So long as I catch the upside, someone else'll be stuck with the tab on the downswing.
Well, thinks Mr. Boomer, I bought at $35, it's now at $100, time to harvest the profits and stick them into something a little more blue chip. Either that, or employee whose options have vested decides to cash out. Net result - more supply than demand, price goes down, people panic, sell etc.
You want to know when this'll happen again? When the boomers start hitting 60, STILL only have less than $2000 in the bank, Social Security is all but bankrupt, and the first biotech stock hits $100 in its first hour of trading. Mass panic and desperation will fuel yet another boom.
Re:When did Art Director become a tech job? (Score:1)
BSCS due in May 2001
looking for work after graduation
Know Java & C
randysmith101@hotmail.com
Re:"Baby Boomers"? Please. (Score:2)
I'm sure when I get to 55 28 years from now I and my colleagues will be doing the same thing - but we won't be a huge enough population mass to do that to the stock market.
My 18 year old brother, himself a member of another baby boom, and/or the people born in 2000 (a third baby boom) will do the same things at their respective ages, and they'll have the mass of people to do it.
I'm starting to invest (a bit late, mind you) because I don't want to be in that trip, but for now making that kind of money is a want, not a need.
I don't have the psychology of "oh crap, I don't want to be eating dog food in ten years, GO STOCKS GO!"
Re:Consulting, baby (Score:1)
The last couple of years I've been contracting at various startups; and while I was paid well enough the managers would allways try to entice me to come on with the offer of options. One place even managed to go public and made some people rich for a short while (till the market recently shot down their stock price). Point being, I'm glad I'm to cynical to take a chance on someone else's questionable leadership and business skills because now I've got good money in the bank and alot of people I used to work for are out of work with worthless option paperwork and years lost to being overworked and underpaid.
Regardless of industry, for every one sucessfull startup that reaches profitability there are nine that failed. And for my personality it's better to have cash in the bank than lottery tickets.
-- Greg
Re:Talk To Employees (Score:1)
I'll be graduating from college this year, and the interview process has begun. I would say that in ninety percent of my interviews, I am able to turn the interview around, and instead of them interviewing me about why I'm good for their company, I'm interviewing them, trying to figure out why I should work for them. I'm able to even do this with the non HR types. The end result is that I leave an interview with a sense that they don't care who they hire.
Does anyone have a company out there that isn't hurting for people?
BigStar Entertainment (Score:1)
While it is really sad to see a large small-company downsize and "buckle down" for tough days ahead (it's harder to get investor money now for e-commerce).. it really isn't so bad. We only kept the most talented of people, cut the fat, and sort of prepared for a few tough months without funding. The BigStar website is now actually not LOSING money (granted I'm not sure if it's making money YET.. but read on and see why I think it will--and most importantly.. it isn't BURNING CASH LIKE IT USED TO). There's some great software that we built, state of the art and all--the site pretty much runs itself. We have perl scripts that auto-generate content from muze and from our vendors, we auto-submit orders to the fulfillment houses, and it basically takes a skeleton crew to run this multi-million-dollar website!
At this rate, I really think it will prove to be a profitable enterprise.. and all with ZERO marketing expense.
If anything, maybe all of this will teach people that the internet is unlike any other industry. You don't need to throw hundreds of bodies or millions of dollars at a problem in order to get it solved. All you need is to get the computers to do it for you. Hire some talented and ingenious programmers, and set things up so the computers run the show. That's what the internet is about. Automation. The most popular things on this great Internet don't need much manual intervention. Like usenet.. or slashdot.. or irc.. etc..
You wouldn't believe how many web sites, despite the relatively techincal industry that they are in, are run in a very old-fashioned and inefficient way! Dozens of bodies are thrown at tasks that really only require someone to write a few programs and think things through. I can think of DOZENS of things that we thought we needed people to do at BigStar, and finally when we had to downsize, we got really ingenious and managed to figure out a way to automate 99 percent of them!!
And another thing.. people leaving a company often offer more junior people a great opportunity. After a bunch of the programmers quit (most of them wanted to go on to bigger and better things where they could get better pre-ipo stock options)... I got to do a lot more of the core programming--I learned quite a bit--and am earning a very decent salary at this "dead" company. (the company is far from dead!)
The moral: Don't believe what the press is saying. Sometimes a disadvantage can be an advantage! We at BigStar are running essentially the same business much more efficiently at maybe 1/10th the cost of what it used to take us to run this business. That's a great thing!
It had to happen... (Score:1)
My current company has just been hit with some of this. I don't think they're doomed yet, but I am alert to the symptoms that I've seen in several doomed companies to date. The biggest problem I find is the controller freakout; if you can avoid or mitigate that, you will delay the onset of doomedness. For example, my corp had a significant LAN outage (5-7 hours of prime working time) due to an 'organically-grown' network infrastructure that finally melted down into massive cascading switch failures. Conservatively, it probably cost our office $250k in billable hours. A solid network with 400 switched ports (+ VLAN, L3, multigigabit backplane, mgmt software, etc.. See Cisco, Avaya, Foundry, etc..) costs about $90k. What figure is easier for a controller to redline?
I'm thinking that getting insurance against outages (like from Lloyd's or something) would actually help me, since premiums against insuring losses of that magnitude would probably be quite steep, and if you go with a technically-literate insurance firm, I'm sure you'd get discounts for solid switched nets, unix servers, proper backup, security and other procedures..
Or not.
Your Working Boy,
Re:Far too many .coms use the IPO business model. (Score:1)
He want's to like his work, that's why the hell not.
Just rob some old ladies or something. They're being stupid and unfit by walking on the same sidewalk as you, right? It's blind rapacious greed that made this country, right?
Some of us try to live and work ethically. We might hire you after we truly add value to the economy.
Quit your
VCs and IBs can flip their shares immediately. (Score:1)
Re:Startups (Score:2)
Actually, back in the day, Jobs had about zero business sense, other than the sense that Woz's computer might have a market. It was Mike Markukla (sp?) who was the "suit" to go along with the "geek" (Woz) and the "visionary" (Jobs).
Mike actually hung around on the Apple board until the Great Putsch of 1998, when Jobs retook Apple.
-jon
I'm crying (Score:2)
Does anybody else working in a non-marijuana-smoking-cocaine-snorting-party-thro
Re:Another alley refugee (Score:1)
"Anyone with a few years experience who is working full-time on Wall Street and is not in management is a fool, who usually has what I call a "martyr complex", or an H1-B, who is basically an indentured servant for the company."
Really? That is certainly some interesting arithmetic you use! The ratio of management to those they manage must be very close to 1:1, according to you, since all those engineers are moving into management; or at least that must be implied from your statement above.
Or perhaps the percentage of "fools," "martyrs" and H1B is just very, very high?
Or perhaps you are a paid shill for the software industry? I doubt you are an engineer, or one worth a damm, considering your apparent illnumeracy.
BSCS due in May 2001
looking for work after graduation
Know Java & C
randysmith101@hotmail.com
Re:youre losing dot coms because (Score:2)
Re:Market Psychology (Score:2)
You could have invested in any of a number of internet, Linux and/or computer companies prior to 1999...
Re:"Baby Boomers"? Please. (Score:2)
No need to apologise: I guess what I was saying was unclear.
My Current Experience with a .com (Score:3)
About a year ago, I decided to leave the company I was working for, and see if I could find a new challange. I shot my resume to Dice.com, and withen a week, had dozens of calls from headhunters and VP of Engineers. I interviewed at five of these companies; all were dot-coms.
I finally settled on the one that I am in today, and do not regret the decision. My deciding factor was not the whiz-bang technology, nor the hype, but a)My gut-level feeling about my boss (He is the CTO, with over 20 years experience in the field), and b)their business plan. While we continue to have a bit of a burn rate, we started with a solid business plan and a strong management team to develop it.
The result: I work at a stable dot-com, where I am constantly challenged, that is a market leader in our business area, and is working to be profitable withen the next two years.
I've never experienced the horror stories that people have eluded to. Yes, we have been "Tightening our Belt" so to speak, but that is simply to avoid becoming a business casuality.
By the way: Three of the other four companies I interviewed at have sence gone under.
Dot Coms (Score:3)
The general consensus in the company is that while many companies will fail, those who turn out to become the leaders in their fields will flourish. It's survival of the fittest out there and you must be very discerning before joining any company.
Any self-respecting, qualified tech person should consider at least two offers before changing jobs, placing each in their own perspective. It can be difficult to try to juggle three offers and move the interview and selection process along so that you can consider offers simultaneously, but only then can you really make a considered and well judged decision on where your pay cheque should come from.
Just my 2c
Aside: How many active users read Slashdot? I see user ids are in their hundreds of thousands now...
Re:Thats contrary to what everyone I know has seen (Score:1)
We've put ads at several places on the net, including Hotjobs, Dice, and a few NY-area-centric sites.
By far the majority of resumes we're seeing are not well suited to the positions. For example, we're looking for people experienced (esp. in the case of the senior position) in UNIX technologies. Yet we get resumes of people with nothing but ASP and Front Page. Annoying!
We're also seeing people with maybe a year or two of experience in the field applying for the senior position.
Finally, we've put some very specific details in our ads regarding how we'd like to see resumes. Clearly placed on each is "text only". Yet people still send MS Word documents.
Obviously, I'm not describing all people. But do please recall that those of us hiring have our frustrations too. We're trying very hard to hire other than "warm bodies". And some of us don't have the luxury/curse of an NR department!
Re:the problem (Score:1)
Doubleclick (Score:1)
Cool!
(BTW, use login slashdot1234 and password slashdot123)
Jacco /var/log
---
# cd
Re:And the bottom drops out... (Score:2)
Article without the registration @ partners.nytime (Score:1)
http://partners.nytimes.com/2000/10/27/technology
POV: Web design company (Score:4)
* Even though the Fucked Companies are many and growing, the web design industry itself is still HUGE and growing. Organic and Razor Fish, etc. seem to have tried too hard to cash in on the Dot Com phenomena, so they may crash a bit. But there are other companies and organizatons, besides Dot Coms, that want websites. All kinds of websites, not just ones that are meant to make billions.
* The so-called "dot coms" can be either good or bad, depending on the same things any businesses depend on. We have one client that has millions in investment from big venture capital firms and big tech players. But their site (which will remain nameless to protect the guilty) is the worst piece of crap imaginable. Why? Because no one there has any idea that they need a real plan. They hear that "medical sites" are going to be big, so they start a medical site. On the other hand, we have another client who is meticulously trying to do everything the "right" way...with lots of planning, slow steps, aliances, hiring appropriate talent at appropriate moments...they will potentially be big. Not Amazon, but many millions of dollars in revenue.
* The tech industry is everywhere. Why work at a Dot Com when you can do your wizz-bang computer stuff elsewhere? Even if you work at a sleezy bar, they may well be willing to pay you to set up a good computer accounting system, a website, or something else.
Thats contrary to what everyone I know has seen... (Score:2)
The problem in the industry isn't companies going out of business. Its not affecting the availability of jobs. What has happened is that people who were mediocre at best at their jobs are let go, and now companies have realized that to survive in this market its better to have a vacant position that a position filled by the wrong person.
100% of the people I know who have real skills, whether software, graphic design, web production or whatever else are having no troubles at all finding work.
Its the people who think they are more qualified than they really are, or the people who believe they deserve things they don't that are having the problem.
The upside is that pay seems to still be rising for those of us who fall into the former category since there aren't people in the latter leeching off companies as much.
Re:startups (Score:1)
Also, banner ad rates keep falling and big brand advertisers like Coca-Cola and Levis, etc. still don't run adds on the web.
When we put that up against dotcoms who rent huge, expensive, glitzy office space...
blessings,
Re:Good ideas, Too early (Score:2)
Idiocy begets idiocy (Score:3)
(1) Companies with great people and good business models attract more great people. Generally speaking, the best people in this industry only switch jobs by referral. Unless I switch careers laterally pretty far (say, moving from security work that I do now to, game programming, which I've always thought would be fun), I will never again be 'seeking' a job. I'll just be asking friends who's got the best place to go.
(2) The inverse is also true. Companies with weak people attract weak people, especially technically. For example, a lot of companies know what they need technically, but they can't find it. They hire consultant after consultant, and they fail again and again because the consultants being pimped out by consulting companies these days are pathetic. Having interviewed a great number, you run across situations where people claim to be 'expert' in Solaris, for example, but can't tell you the simplest things, like, say, where you set name servers for name resolutions, how to turn on ip forwarding, or where you would change a mount point on a drive. Yet, clearly, the companies sent these would-be consultants in thinking we'd hire them. This reflects, in my mind, either an expectation that the interviewing company cannot discern applicants, or an expectation that mediocrity is acceptable to acquire a warm body.
(3) Making money was just optional for far too long. Too much watery-eyed technochasing, or, in many cases, watery-eyed garbage chasing, was going on. Let's consider our old friend, the CueCat. For those in the industry, how many companies do you know of who's ideas were about as technically deep? And for every one of these fairly-simple ideas that pans out (Hotmail for free email, for example), how many failed? (And here, you could insert a dozen startups doing internet 'briefcases', chat this, doc-share that, etc) Then there's people who seemed to think that anything could be sold online -- UserPaperMacheHotTub.com, etc. All these extra ventures created demand that brought more people into the industry, but too many people (in it and joining it) were underqualified, but able to make good money because people had to hire someone (and then fail, because 'someone' isn't good enough).
(4) Too much money spent when it wasn't needed. Bruce Perens recently said that programmers were wasting half of their time reinventing the wheel. I've seen this firsthand way too many times. Companies blow tens or hundreds of thousands of VC dollars on solutions to problems that could be solved with a visit to Freshmeat. The problem of overconsumption of technology takes other forms; companies who buy Oracle ASP services when they should have run linux and php, etc.
(5) The Certification Myth. This is my personal favorite. In one office I've visited, they have a chart up on the wall, showing the number of employees who have various certifications -- CCNA, MCSE, MCP, MCP+I, A+, etc. People place an enormous amount of faith in these certs. At one recent recruiting event, one company was acquiring sysadmins with the following: "Do you have an MCSE?"; if they did, hired; if not, thanks anyhow. Meanwhile, the very best people I know are not certified. They're generally also not college educated. Those who are are educated in other fields (for example, degrees in English, now doing hard core tech work, or even a former lawyer turned techie). Meanwhile, sappy companies hire morons with some letters after their names.
Again, this sort of ignorance begets the same. The bright people will avoid working for companies that value certs above skills, because why should a truly expert BGP guy work for a company who pays him less and treats him as less senior than a relative fool with a CCIE (although of all the certs, the CCIE has the smallest number of lamers with one).
All of this is compounded by the fact that some of the best technical people are also those with the least people skills. They recognize their treatment, but they are simply bitter and condescending, and instead of being tapped for their good traits they are relegated to ineffective corners of organizations.
Overall, its no wonder companies are failing all around. And this is why there IS a shortage of IT workers -- its not that there aren't enough, there just aren't enough good ones. It shouldn't come as a surprise. It's become a real industry. Other real industries have schooling followed by training. They have fellowships or internships that are required, or apprenticeships to reach journeyman level. This isn't the way of the tech field, and thank goodness, because it interferes with the meritocracy that draws such bright people into the field and keeps them there and working hard. But it leads to a bunch of bogus credentials, and the worst are book test based certifications.
Re:Pointer Arithmetic? (Score:2)
It's why C++ was invented, when it was found that the new generation of CSc grads were all wizards at HTML but couldn't align a struct on a power of two boundary.
Re:Pointer Arithmetic? (Score:2)
char* strcpy(char* d, char* s){
while(*s)
*d++ = *s++
}
It's not really that surprizing that someone would a prospective employee to know it, but I don't see why, it might have been all cool about 5-10 years ago, back when people still used typedefs in their code. It dosn't let you do anything you couldn't do with array indecies, really.
Old style, new style, what's better? who knows. I'm really, really rambling here, geez. um, anyway I hope this explains what pointer math is...
Talk To Employees (Score:4)
Unfortunately, when HR types interview people, they often do it alone or with other HR types. If you're ever interviewing for a job and this happens, this should throw up a red flag. You should be in an interview with other people who will be working with you. You obviously can't expect the truth from anyone in an interview ("So, what do you think of this company?" "It sucks, all I do is sit around on my ass and watch the marketers decide which sporting event to spend their money on next"), but you can tell a lot from enthusiasm, involvement, and whether the questions being asked are "I want to hire you" or "I don't want to hire you" type questions.
I prefer the latter type questions. If company employees come into the meeting with a "I don't want to hire you," kind of attitude, that means they want you to prove their worth to the company. That means they're looking for qualified people, not another warm body.
But I'm sure most of you know this already.
on the "web design / consulting firm" topic (Score:2)
Been hearing alot of things lately like "retaining clients" - "long term relationships" - "site enhancement strategies" - etc. etc. Whereas before it was about "new business", "new clients"
And now with companies like Razorfish laying off hordes of employees
Typical for any new market (Score:2)
Go back and look at how many automobile manufacturers there were in the US in the 1920s and 1930s - over four hundred. How many are there now?
And guess how many people were pronouncing the death of the automobile industry when those companies were dying off a dozen at a time??
Turnover is going to be common for the website business, since the barriers to entry are still lower than most traditional businesses.
This is just the beginning of what will become a huge industry. I'm still long on tech.