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News: Article: It Feels Like 1998 All Over Again

  1. Article: It Feels Like 1998 All Over Again (15 messages)

    In It Feels Like 1998 All Over Again, we are met with the question: With signs of an Internet bubble rising, are we on track for another colossal crash?

    Caterina Fake, co-founder of the Flickr photo-sharing Web site, wrote a blog entry titled "It's a bad time to start a company." It was a frank argument that a bubble was reinflating Internet businesses, making it impossible for upstarts to stand out. And her argument was met with a flood of comments from people who disagreed wholeheartedly.
    "I must totally disagree with you," wrote the first respondent, arguing that the time is right to strike out on one's own. "Now that money is flowing again, working for yourself is the only way to really cash out."
    But Fake says this reaction only proves her point, revealing a common sentiment of "me too."

    With the new Net revival of Web 2.0 claiming a second generation of Internet companies will improve on the groundwork laid by the first generation, comparisons to the roaring '90s are inescapable.
    Like the New Economy and other theories that accompanied past bubbles, Web 2.0 maintains that we have entered a new era in which the rules are different: Net startups no longer require lots of capital, they can build cheaply on Net infrastructure that didn't exist 10 years ago, and a critical mass of consumers is now online.
    What are the chances that this bubble means another crash? History reveals many small bubbles that only motivated entrepreneurs and investors without causing widespread harm - but the debate continues to flare. Are we headed for another 1998?
  2. I really don't see it. I remember the late 90's. The VC people were willing to throw giant mounds of money at total vaporware and employees were willing to work insane hours for peanuts and stock options. That was the *norm* in the industry, not the exception. While I do see that kind of behavior with a few companies, it doesn't seem widespread to me.

    I see today as more "business as usual". All industries go through fads and boom-bust cycles. The IT industry looks like it is on an upswing, which means eventually it will come down again, but I sincerely doubt will be anything like the bubble.
  3. You need to see VC sites to see what they are funding.

    And I know that people are getting mutiple offers now.

    But like you.... I am not excited about it. Last boom I had to work w/ people that used to drive a cab, or ... "I used to be CPA last year, and now... I am webmaster. Can you just touch up scalability of this EJB for me?".
    yuck, here we go again.

    .V
  4. I had to work w/ people that used to drive a cab, or ... "I used to be CPA last year, and now... I am webmaster.

    It is really hard to take our business serious, if companies keep doing these things. Name me one profession where this is possible aside from IT. And it is not like "we" are the cheapest people to hire.

    Sigh
  5. We all are 8 years older, and many pounds fatter :)
  6. 1998 again? Not even close. Forget monitoring VCs. Just wait until I start investing heavily in high tech stocks again. When that happens, watch out!
  7. You're probably joking, but you're right too. If it's 1998 all over again, we'd need a Bubble. I don't think you can say Google fills that role, there were many companies that had crazy IPOs in the late 90's. And as a result many even crazier companies got funded. I haven't seen that happening. What I have seen is local labor markets starting to get very tight (Bay Area in my case, but people in other high tech areas tell me the trend exists there, too). My theory for this is that companies started heavily outsourcing as of a couple years ago, and have discovered all those hidden costs. Now they're hiring in the US again, and it's pretty easy to connect the dots there. So, as far as startups go, it's a lot like the late 90's, when you had to compete very agressively just to hire a team. But as far as the money markets go, not so much. Honestly though, to respond to the original premise of the article, I think any time is a fine time to start a company as long as it's a good idea with good people around it. Plenty of good companies got started in any year you care to pick in the last 10 years. Hell, Google was founded in.... you guessed it.... 1998.
  8. What I have seen is local labor markets starting to get very tight (Bay Area in my case, but people in other high tech areas tell me the trend exists there, too). My theory for this is that companies started heavily outsourcing as of a couple years ago, and have discovered all those hidden costs. Now they're hiring in the US again, and it's pretty easy to connect the dots there.
    Isn't it also possible that a lot of people who were only in IT for the money have moved to other careers? Real Estate Agent, for example...
  9. There is a bubble of sorts[ Go to top ]

    It's not a financial bubble so I don't think there is the kind of macroeconomic danger we saw in the past. However, there is clearly a hype bubble around Web 2.0, social software, etc. What services like Flickr, del.icio.us, digg, gmail, technorati actually do is disproportionate to the hype surrounding them. Let's face it, what they do is trivial and their value is their brand. That's why some of them have been sold for considerable amounts of money. They don't tackle the hard problems. They are basically media companies, not software companies, which is OK, but media companies are exposed to dynamics that are very different from software companies.
  10. I work and live in San Francisco and you do feel that things are picking up fast. Dice is busy again, random emails from recruiters, people leaving big safe companies for start up opportunities. Even in South Park there are lines in the coffee shops. I think the tools and knowledge base are definately a lot better this time around. No more six months and a massive team of J2EE engineers to build a CRUD website. On a selfish note hopefully though this will not mean the return of the political science majors. The people who came to the city to make a quick $$ and left in droves without a penny when the bubble burst and no one would hire them as they had no skills. San Francisco is a lot nicer place to live without them. :-)
  11. honestly, while i used to grouse about non-CS people finding their way into IT during the bubble days, i can say that if somehow it had magically became 1998 again back in 2001-2, that would have been most welcome. those years were the pits. i'd left a big safe place just in time for the bubble pop, wound up learning a lot, hung in there and am now back, finally, at a biggish, safeish place. so, of course it is time again for a mad market. :) good market timer i am not. in sum, there was a lot more that was good about 1998 than bad (noting my silly complaints above), and even though i don't think the current market is a growing bubble, having some of the good things about 98 back in play is ok.
    Real Estate Agent, for example...
    given current housing markets, this is not a bad gig. know of one former network manager sort who is making money hand over fist as an agent.
  12. and am now back, finally, at a biggish, safeish place. so, of course it is time again for a mad market. :)
    Do you really consider big companies a safe place? I thought so but having recently found out that my job is being 'offshored', I'm considering the possibility that a smaller place may be safer (and less asinine.)
  13. No such thing as a safe place. The banks showed that when they got rid of a lot of people who thought they had a job for life in the early 90's. In a global service oriented world 90+% of companies do not care about their employees and pay for a service. This is why I feel contracting is they way for technies to go. If you want to be safe constantly invest in your skills both technical and communication. I would consider communication skills these days to be number one when going up against an global economy.
  14. really consider big companies a safe place
    hear ya. no, nothing is "safe", and nothing really should be in the terms that people likely think of when they think "safe". that sort of safe is stagnant. "reasonable" would be better description.
    biggish, safeish
    very intentional wording. :D
  15. Internet Bubble 2.0?[ Go to top ]

    I'm a serial optimist, and even I knew the collapse was coming. I worked as a consultant in NYC and walked past the exchange every day while people were handing out toy remote control cars to hype their crappy net business. I got offered more than one job with a $100,000 stock option signing bonus (scoff). This is much different. Much Different. People aren't abandoning their brick and mortars to jump on line. People realize a good business model is more important than hype. Sure a lot of money is flowing in, but then again there is a lot of money to be made. I see the new net businesses filling in gaps where brick and mortars couldn't succeed. Things like social networking shouldn't be any more a surprise than IM clients were. People like to use the net to communicate. Difference is now, you'll see myspace IM, myspace mobile...on and on...and these companies know who their audiences are. They are actually paying marketing people this time around. Lastly, technology is so much better equipped this time around to build complex Internet businesses. With a combination of open source and the fantastic new development tools that have come along in the last 4-5 years people are no longer trying to make a Porsche with an erector set. Many of the technical issues have been over come. I don't get blank stares anymore at my consulting interviews when I mention unit testing and refactoring. People are building products that work and scale. I'm going to go out on a limb and say that this is the new economy that they .com bubble produced. Service based companies are alive and well, and might I add, making money hand over fist. There is a lot of niche markets that exist which can only be reached by Internet technology. Things are good for developers and will be for years to come. Now, about that trade deficit.....
  16. This topic is lame[ Go to top ]

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