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

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 head stuff for a 20-somethings.
Naturally, they all longed for day, 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 believe 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, their 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 going 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.

Time for Ford to Get into the Lifetime Transportation Business

Can Ford really make a better car for Americans? I have owned my share and they all tend to break down after 4 or 5 years and they have close to zero status on the East or West coast. So why should Ford try to reinvent a wheel that foreign car companies have improved or commodotized. They can’t afford what it really takes to change our minds…..

Besides, what is more unique, Ford’s relationship to Cars or to the American consumer. They certainly have iconic value and I’d rather give them my money than some guy in a remote country, but the truth is I have come to want my engineering Japanese and my prestige German-British with a dash of Italian.

That’s more or less how our computer and technology universe works, so why not cars? Or to put it this way, is it any wonder that the person who mastered this concept is also the world’s richest man? That would be Bill Gates, who outsmarted IBM by owning the software operating system and not the computer. 20 years later, even IBM stopped owning the PC and now owns the data processing systems and support at most large enterprises.

It is a bit unrealistic to suggest that Ford start offering the Windows of automobiles and become Autosoft, but with a few conceptual refractions there might be some lessons for them.

Seth Godin, the web marketing guru once suggested that car companies stop selling cars but rather a lifetime subscription that guarantees a working car in their driveway at all times. But that is really just the beginning and perhaps a little simplistic. Seth was a Miata enthusiast at the time and may have objected to a replacement Mustang. But there are many variants that could accommodate individuality. The key to understanding this from a business perspective is, as GM once proved, financing cars was often more profitable than actually making them.

Young people probably want a lot more individuality in their car than their parents. But may not be able to afford it. Let them iTune it - buy a basic unit and download or add new components to it that make it unique. Factories may close down just as big record stores did, but modularized assembly could be done by local dealers, carshops and mechanics. Ford only has to certify these cars as roadworthy, finance them and sell a guarantee of continuity.

That could mean that Ford gets you a deal on trains and taxis if you need them. Some plans may give you use of cars only when you need them. This is the SOAS (software as a service concept rippling through the IT world) and it would mean getting into the ZipCar business, guaranteeing to their paying customers a car waiting in a garage somewhere if they need it.

My dream is they get into the schlepping-my-kids-to-after-school activity business, a logistical feat that will liberate millions of overeducated mom and pop chauffeurs everywhere.

At the end of the day, the car become less important than the car carrier, the company that lets you decide whether to switch your car every 2 years, 4 years or 6 months and change your mind again, simply by adjusting the premiums. Does your health insurance company care which doctor you choose, so long as he or she is on a list. Do you not have a car carrier, then buy an orphaned vehicle and take your chances……..

I suppose one way of describing this is to say Ford or GM should get into the personal transportation management business. They should still manufacture what makes sense, outsource what doesn’t and finance anything else that you dream of to make it all part of a seamless transportation relationship.

Over time, the world of transportation will favor them. A known, committed car owner will earn certain flying privileges that an unknown straphanger might not. Or lanes will open up on highways that enable cars with the right technology to slip into autodrive. Perhaps smart cars will not only have their GPS and phone communications with OnStar support and satellite radio but they will be routed. Lanes reserved for their travel, parking spots kept for their exact midtown ETA. Maybe kids late for class can listen in on their lectures, even miss them as they head for drivethrough-less banking and food order and even live transmissions of religious sermons as they drive, thanks to the Car company’s Internet Broadcast Transmission Center.

As cars get smarter it will become more about their software, their smarts and their relationship to the transport universe than it will about the specifics of their plastic and steel. The more US auto companies profit from the intangibles, the more likely they are to survive.

Alan Brody is a technology marketing author and head of the national Digital Media Forum for Entrepreneurs, iBreakfast.com


© 2006 Alan Brody

MySpace Report: Famous for Fifteen People

By Alan Brody


Shawn Gold, SVP, MySpace; Shelly Palmer, IATA; David
Teten, Nitron Advisors
(See articles in BusiinessWeek & USA Today after report)


Shawn Gold did a great job of explaining why MySpace
has been so successful with young people (over 80
million users) and why it is a compelling tool for
marketers to reach them (see USA Today and over 100
other news outlets that picked up the story.). It
really comes down to self-expression, kids thrive on
it and MySpace allows it in spades. More the to the
point, it allows you promote yourself to your
friends, peers and colleagues.


That is really the way to understand the phenomenon
of User Generated Media. It is not about everyone
trying to outdo Hollywood, although it happens form
time to time, its about "us "getting to feel like
Hollywood. If sites cater to "us," we’ll reward you
by paying attention to wares.


Adults don’t feel like taking on the media (although
they did with the desktop publishing revolution of
the 80’s) but kids do. The fact is, they don’t know
any different. So they have seen every brand and
celebrity promote themselves, so why not them too.
That’s why, as one pundit put it, everyone is famous
for 15 people. Blogging and older web page community
sites took advantage of it too. What MySpace and the
new generation sites do that is so attractive, is
give you ways to go out and find the 16th, 17th,
18th and so, person to be famous for. So they have
become an eCommerce for a lot of entertainment acts.
That will increase rapidly across the board.


MySpace began as a response to the uniformity
imposed by the then, very popular Friendster, and
the rest is history. (For complete notes on this
event we refer you to David Teten’s blog and the USA
Today story.) Despite the occasional outcry, they
consider this a safe haven from the perceived
dangers of hanging out at malls. One other aside, at
a conference the iBreakfast promoted on Monday, the
CFO of Viacom explained why they had passed on
MySpace and let Fox buy it for $500+ million. "We
asked our salespeople and they said they wouldn’t
know how to sell it." There is a certain amount of
common sense in that but even so, it says that
Viacom ties its future to the imagination of its
salespeople. Hope they have a left brain!


Shelly, Palmer, the popular producer and pundit of
the next generation TV described the big buzzwords
and the reality of the next wave of TV. Ultimately,
he believes, as his book TV Disrupted, posts, that
content creators will be able to bypass the current
network of gatekeepers in various ways leading up to
the great coming "WiFi Broadband Cloud" enabling
devices to pluck IP-based content form the skies in
a mesh network that no one can disrupt.


David Teten talked about he rules and practices of
social networking and how it creates better
relationships for business, professionals and your
kids. Most important, when properly aggregated,
usually by the provision of free tools from the
websites, they enable marketers to target and get
very close to specific audiences. One intriguing
idea is that millions of people today own optical
readers and very small printing presses in the form
of digital cameras, camera phones and so on. Some
applications like ticketing and bar code reading etc
and even depth sensitive gates are starting to
appear but many more surprises are yet to appear.