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May 22, 2007

Silicon Valley Could Use A Downturn Right About Now

Michael Arrington

248 comments »

Silicon Valley is paradise for geeks, and people flock here from all over the world to be part of something very special. When I speak at events here one thing I often do is ask people in the audience to raise their hand if they live in Silicon Valley. Usually 80+% of the people raise their hand. I then ask them to leave their hand up if they were actually born here. Only a few hands ever remain up - the vast majority of people who live here and work in technology moved here at some point in their career. It’s a neat parlor trick, but it shows just how special this place is. Our entire culture in Silicon Valley is based around technology and entrepreneurship, and all the talent is imported from around the world. It doesn’t matter what color you are, what God you worship or who you choose to sleep with. All that matters is the products that are built and the technology behind them.

And Silicon Valley can be a lot of fun at certain times. When I first started writing TechCrunch in 2005 it was like that. There had been a couple of small acquisitions (Flickr, etc.), but for the most part there wasn’t a lot of venture capital moving into new web startups, the IPO window was firmly shut, and the public companies weren’t doing much M&A. There were a few dozen new startups, though, and the people who were involved with them were largely here because they loved what they did. No one had marketing departments or PR firms. Lavish launch parties were a dim memory from the late nineties.

Events started popping up as well. Our first party was in September 2005. Twenty or so entrepreneurs came by my house for beer and burgers. Chad Hurley, the co-founder of YouTube, was one of the attendees. I remember asking him if he thought the whole YouTube thing would work out.

We quickly had three more just like it (but with more people). When I look back at the pictures from those early events, I remember good times, and no one was talking about twenty million dollar venture rounds or selling out for a cool $1.65 billion. Companies like Meebo and Sphere literally launched in my living room in front of a couple of hundred genuinely interested people.

Somewhere in there the money started rolling in. Our first dime of revenue was December 2005. A few months later a lot of companies were raising $3 million A rounds, then $7 million A rounds after the YouTube acquisition. Companies started to hire marketing managers and PR firms, and spending tens of thousands of dollars on launch parties. Now, a year after the madness started, it’s even worse. Companies have to actively dodge venture capitalists to avoid raising a big round of financing.

Times are good, money is flowing, and Silicon Valley sucks.

I don’t know what it is, but the same thing happened in the late nineties before the bubble burst. Lots of startups got funded that made no sense but people got excited anyway. A unique, beautiful and well executed idea was not a story worth talking about until that first round of big, eye-popping capital. People become more anxious, and more likely to snap at someone in anger or jealousy. Rumor mongering spikes, and a crucial balance is lost. It’s no longer about beautiful products and genius developers. It’s about the money and the status, and hot PR chicks and marketing departments.

The press side of things is equally nuts. I wasn’t writing a blog in the first bubble so I can’t compare now to then. But entrepreneurs are no longer talking to us just to get our opinion and hope for a blog post and a little discussion. These guys need press to stand out from the scores of startups just like them. Saying no to them isn’t really an option. They show up at our front door with a bottle of wine or flowers. They instruct their PR firms to do anything necessary to get a story. More than once I’ve had a CEO break down and cry on the phone when we said we weren’t covering them. And more than once, I folded and wrote about them after those conversations.

I left Silicon Valley at the peak of the insanity last time around, and I was pleasantly surprised when I returned in 2005 to see so much goodwill and community surrounding innovation. Now, it’s just like the old days again, and Silicon Valley is no longer any fun. In fact, it’s turned downright nasty. It may be time for some of us to leave for a while and watch the craziness from the outside again. In a few years, things will be beautiful again. The big money will be slumbering away, and the marketing departments will be a distant memory. We can focus, once again, on the technology. And the burgers and beer.

  • Sphere It

This entry was posted on Tuesday, May 22nd, 2007 at 1:45 am and is filed under Company & Product Profiles. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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Comments

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  1. Vaibhav Domkundwar - Better Labs

    May 22nd, 2007 at 12:21 am

    Right on. I hope those good times and those good companies and team are *still* around and I believe those teams will create the killer products and services that will last through this euphoria.

  2. Steve S

    May 22nd, 2007 at 12:22 am

    Mike, take a look outside of the valley for a few moments. If you look at places like, well, Gainesville Florida you will see a hub of innovation that is completely disconnected from the mass of capital flow that can destroy the culture of creativity.

    Out here, not every silly idea is courted by Sequoia. Even at UF, where you would think technology would flow like wine from the sheer number of students available, only a few startups (and almost none in the web technology sector) ever become more than garage ventures (Grooveshark pops out in my mind).

    Last month I started a tiny (by most standards) technology conference out here and realized something important. Outside of the valley there really is innovation, you just have to be willing to do the legwork to find it. Not only that, but because all of us entrepreneurs out here have to work so much harder to be noticed, our businesses usually have some really savvy models and a lot of pretty tough leg work behind them.

    The rest of the nation outside of the valley is the proving ground, and because of that I really think it might be some of the most fertile land for technological development.

    At least we didn’t make Treumors (no offense to Guy)…

  3. CHEF

    May 22nd, 2007 at 12:23 am

    REMINDER: THE BAY AREA IS A BORING COLLECTION OF LA-LIKE SUBURBS. IT’S ONLY REMARKABLE BECAUSE OF THE CITY OF SAN FRANCISCO.

  4. Michael Arrington

    May 22nd, 2007 at 12:26 am

    Steve S - I disagree with some of what you say. I’ve worked at technology companies outside of the valley - London, Ottawa, Los Angeles - and know the tech scenes pretty well in NY, Seattle an Copenhagen as well from living there or visiting quite often. There are great startups there, sure, but the wonderful support networks just aren’t there that you have here in the valley. It’s like making movies outside of Hollywood - lots of people do, but the culture is different and it’s harder. Silicon Valley is literally perfect when things are calm here and everyone isn’t chasing the dollars. I’ve never seen anything like it anywhere else in the world. That’s why so many entrepreneurs move here, with our without a visa, to make their dreams come true.

  5. Rodney Rumford

    May 22nd, 2007 at 12:28 am

    Mike,
    I have never lived in Silicon Valley but travel up there on business sometimes. The interesting thing about being in the tech field is that there is still a lot happening outside of silicon valley. I actually feel blessed to be in southern California. There are a lot of cool technology startups happening in San Diego and a lot of cooperation & goodwill between us startup guys.

    The feeding frenzy just never seems to happen here and i guess that tempers things a bit more and that is a good thing. We seem to be attracting a greater technology talent pool as well. It always is fun here and while we don’t get all the hot pr babes like you guys in the valley, we just go to the beach (when we get 1 minute of free time) to get the eye candy. The great thing is that this costs us not one penny of investor money. ;)

    You have lived in Southern cal and you understand that the vibe is very different. Interesting take, thanks for the insights and looking in the rear view mirror.

    Rodney Rumford

  6. Zaki

    May 22nd, 2007 at 12:32 am

    Big money ruins everything quickly. Lack of big money ruins everything much more slowly.

  7. David N. Welton

    May 22nd, 2007 at 12:35 am

    I’d have to agree witht the “out of the valley” sentiment. Violent swings like that are fun when you’re young, but at a certain point, it’s nice to be somewhere where there is good tech stuff happening, but without all the crazyness. And thanks to the internet, it’s all getting easier and easier.

  8. Steve S

    May 22nd, 2007 at 12:35 am

    That’s a very good point. The valley is a hotbed and it really is one of the finest tech incubators that this country has seen in quite sometime, but as such it has a tendency to have these “me too” phases. What I was really trying to point out is that there is a great big country out there, and that the valley is really not necessarily the center of the tech universe.

    A lot of time, when you focus only on the big whiz bang deals (which is what I think you were getting at in your article) some of the equally ground breaking, but less publicized products fall through the cracks.

    When you are forced by necessity to run lean, and need more than just a “good” idea and a few Palo Alto connections to secure funding, you tend to see a lot of really interesting, really savvy business’ emerge.

    I am not taking a shot at Silicon Valley in the least, all I am really saying is that easy money and plug and chug business generation does tend to produce bad bed fellows, on occasion. Then again, it also tends to produce quite a few marvels.

    Thanks for the response.

  9. yongfook

    May 22nd, 2007 at 12:45 am

    bai bai! u be’s back in 80 daiz?

  10. Noah

    May 22nd, 2007 at 12:45 am

    Haha, Zaki, I think I agree. Can’t live with it; can’t live without it.

    Mike, what a sad, sobering post. Are you telling us you are going to be moving on from TC?

    Also, even with all the copycats, I still think I’ve read about some pretty neat start-ups on here in the last few weeks. Yapta, and that phone tree one come to mind immediately (just because they are so recent, I imagine).

    A thought just occurring to me: I’m sure many others have suggested this in the past, but could you have a TC Top 10 or something, where readers vote on the start-ups they find most interesting, disruptive, and USEFUL (read: not Twitter)? You could refresh the list every week, and display it somewhere on the right sidebar. Reader involvement, more page views, more accurate start-up reviews/ratings — what could be better! Haha.

  11. Brian

    May 22nd, 2007 at 12:47 am

    From the perspective of a bootstrapping entrepreneur, your short essay couldn’t be more spot-on.

    I don’t want a cash-infusion for my start-up. I’m not interested in the glam of venture capital. And I’m scared as heck about what would happen — to me and to my startup — if I didn’t have the cash crunch imposed on me that keep me disciplined.

    It’s so easy to get caught up in the money. In fact, only hours ago I was talking with a buddy about a local startup that has a burn rate of $170K+ monthly without a drop of revenue. Founders’ salaries are $160K! They drive Mercedes. Live in big houses. Eat at expensive restaurants.

    And they’re only a single anecdote.

    I want to know what happened to the start-up mentality. What happened to committing yourself fully to your product (service), in the spirit of entrepreneurship, because you believe in that product? And so much that you’re willing to forfeit a salary in the short-run for an equity position?

    I know it’s not lost entirely — that there are folks out there who WANT to eat cold pizza and work long hours with little pay, all in the interest of creating real value. But they’re hard to find. In Silicon Valley and elsewhere.

    So glad you brought this issue to the fore, Mike.

  12. sean percival

    May 22nd, 2007 at 12:50 am

    From some reason I was waiting to see a post like this from someone like yourself. Someone had to say what even us outside of the valley (so cal) can see is going on. Each day, a new rumor or a new startup with a dropped vowels in the name. With each post a little less enthusiasm or interest generated. Instead the gossip stories get the most attention, and lets face it are the most fun to read.

    Hopefully at some point it will hit a critical mass and only the strong services will be able continue to grow and operate. We certainly wont have a shortage to choice from.

    Myself? I’d rather leave the city and corporate machine behind and run a smaller web business from my home. It doesn’t yield a billion dollar buy out but it pays the bills and keeps life mostly stress free. Sounds nice huh?

  13. Stephen Sclafani

    May 22nd, 2007 at 12:55 am

    There needs to be a downturn so you can write a book, Mike. I want to hear more about the crying CEOs. :)

  14. Steve S

    May 22nd, 2007 at 12:58 am

    I think this really hits the nail on the head. The entire spirit behind starting a venture is supposed to be the idea of truly committing yourself to an idea. The very best management and the smartest products are created by those who first have experience and second have the fiscal discipline necessary to weather storms and burn cash at reasonable rates.

    Funding should be hard to acquire, maybe not quite as hard as some institutional investors would make it, but it should be the result of a well thought out business model that can generate value for the investor.

    I guess this is going slightly away from the subject, but is more inline with what Brian wrote. The Bootstrapping mentality is somewhat missing from the valley at the moment (or so it appears).

    Take what you said about the press for instance. How much signal is being drowned in the valleys noise at the moment? No one without a huge credit line and the willingness to hire a well connected PR firm can get the coverage you really need to be a breakout hit in the internet startup bubble.

    Everyone tries to even the playing field, but when we are being really honest with ourselves it seems (at least) that we are always attracted to the sexiest sounding products and usually those are the products who could make enough noise to get someone big to pick them up.

    I am really just building on a critique here. It’s not so much a problem as a symptom of having a place with such a high concentration of really valuable, really intelligent people. I suppose having the opposite problem would be much worse.

  15. Adrian

    May 22nd, 2007 at 1:00 am

    Who cried on you Mike?

  16. RBA

    May 22nd, 2007 at 1:08 am

    The Silicon Valley doesn’t suck, but every once in a while it becomes home for a lot of people who does.

    And well Mike, what would you do? Stop writing about Krksztr.com receiving a $X million Series A round despite having little prospects of ever become profitable and focus instead on writing about Mel and Jim’s cool web project? I don’t know… Are you still doing what you enjoy doing? It doesn’t sound like you are. Can you go back to basics? Should you? You just got yourself a CEO, Mike! (with all due respects, no ofense meant and I’m sure she’s a wonderful and extremely capable woman)… A CEO…for a blog! A profitable blog I presume.

    You’ve got trapped in that same thing that’s pissing you off I think. I say go get married and have a couple of kids or something… :-)

  17. Nathan Pham

    May 22nd, 2007 at 1:12 am

    Since I have been reading TechCrunch for the last year or so, I would like to share a few thoughts…

    Shouldn’t we be blaming the “people or community,” with a lot of money, that are funding those “me too” startups? In my opinion, these type of fundings create a chain effect of “hit-and-run” companies, where founders do a really good job of the sell-pitch, grab some short term high salaries, then exit.

    Mike, are you suggesting there will be a 2nd burst soon?

    Thanks.

  18. Alex C

    May 22nd, 2007 at 1:16 am

    Bravo. First thing I thought of: “This town needs an enema!”…If I may, I say consider an opposite action; gather the other like minded folks and make a stand in the valley. Try to shed light on the truly interesting ideas and the people behind them. Be merciless on the BS and idea cloners and do the best at keeping the original spirit of what you started.
    Easy to say and hard to do. Worse still, I’m a marketing person (who’s fiercely proud of the work his company does) offering advice.
    Good luck.

  19. Steve S

    May 22nd, 2007 at 1:21 am

    This might be an idea. Standing up is not necessarily standing out, it may just amount to editorial decisions to avoid promoting those companies that really do not deserve the spotlight. To me frank Mike, you are a meme-maker and a heart breaker in the valley. Your opinions hold a huge amount a weight and you are in a position to make some small change in culture.

    Everyone wants to be featured on Tech Crunch, and you have scads of requests coming in (the Forums prove that much). One way to shift public opinion is to give us something new to look at — which I must admit you do a lot of the times.

    This town needs an enema, indeed.

  20. Samir Shah

    May 22nd, 2007 at 1:26 am

    You gave an impetous to my intution. The time is not that ripe now. It may happen in 2009. But I will not be surprised if it happens earlier. Why I have this intution? I read a lot of computer industry news.

    I was thinking that Web 2.0 hype maybe it. But I am not sure of it now.

    When? I have already talked about it.

    In what? Web 2.0? Online ad M&A driving up froth? Too many new startups getting funding? I do not know.

    Why? Some kind of mob psychology?

    How? I do not know.

    I may have some insights in later posts.

  21. Mr.G

    May 22nd, 2007 at 1:27 am

    Mike trying to get on WSJ again?

  22. Lenny

    May 22nd, 2007 at 1:28 am

    Hi Mike,

    You should move to Ireland. Plenty of beer and burgers and not much investment :)

  23. n00dles

    May 22nd, 2007 at 1:35 am

    Freudian slip or typo in the last paragraph?

    “It may be time for some of use to leave…”

    :)

  24. Phil

    May 22nd, 2007 at 1:43 am

    “launched in my living room in front of a couple of hundred genuinely interested people”
    That’s a pretty big living room

  25. Ali

    May 22nd, 2007 at 1:50 am

    CEO’s crying on the phone to you? Wow, they must rely on you a lot.

    But I’ve also noticed that not all startups you cover actually “make it”. Sure they get a nice big spike in their Alexa graph but that’s about it. The rest is up to them to make sure their product stands for itself. I think more times it doesn’t and usually it is just another spin off from a popular product with 2 extra social features.

    I’ve also noticed you’ve put the MyBlogLog widget back, what gives?

  26. Craig

    May 22nd, 2007 at 1:55 am

    Hi Mike,

    Great post - as a reader of TC since the start I loved hearing about the great ideas and websites people were building and getting a real feeling of the innovation going on in garages and dorm rooms. It was inspirational and made me want to get involved, do some beta testing, build a website, anything.

    Somewhere along the line the dollars flowed and it sure wasn’t as fun hearing about first round funding or the launch of the next social network/personalised home page.

    There are still some gems being launched but its a lot more cynical now - to second #Noah - I would love a mini-blog focused on startups without funding. Focus on the little guys again, and if they become big, then they don’t get covered. I know the hardest part will be sifting through the mass of startups to find the interesting ones, but maybe that should be done by the users. Get them to bubble new sites to the top of a list, then you critique them.

  27. Hard time covering great story?

    May 22nd, 2007 at 2:00 am

    HAhahah. Mike is still looking for new ROCKY web 2.0.

    Youtube, Meeboo, Joost, Myspace, Facebook and all startups took VC steriods. They got money, muscles, and copy power. lol.

  28. Shannon Clark

    May 22nd, 2007 at 2:08 am

    Mike,

    I think it may also depend on where you go. I was at the wordpress.com 1 millionth user/2.2 release party tonight. Low key affair, some free drinks for attendees but if wanted a burger or meat-on-a-stick you paid (and heck lots of people also paid for their own drinks). Lots of tech talk, lots of company founders, but very relaxed, friendly conversations.

    On the other hand, there is clearly a lot chasing the dollars happening right now - plenty people seeking vc funding, too many companies launching for even interested users to find/use/try them all. And definitely the line between a major blog (such as TechCrunch) and “big media” (tv, the NY Times, the WSJ etc) seems to have shrunk to nearly nothing - i.e. stories will break on any of these mediums and quickly migrate.

    Our little neck of the world (and yup, I’m new here in the past few years myself) seems to be driving more and more of the media coverage (and not as unusually lots of funding dollars).

    However I think it is still fun for many - and still relaxed (relatively speaking) but you do have to pick and choose. And the speed at which ideas, new companies, events go from zero-to oversubscribed is growing.

    I’m bootstrapping my current startup, we’re in very limited beta at the moment, I half dread/half anticipate what happens when we open up, when we’re ready for wider blog coverage. Technically I think (but won’t know until it happens) we’ll be ready for it - but I know it will mean a new pace to our lives (and I want to make sure we’re ready to build on momentum when it happens - including being ready to generate income potentially).

    This upcoming weekend I’m off to the Midwest for a long, mostly non-tech weekend. I anticipate that not only will it be a welcome mental refresher, but that very likely I’ll get a lot of work done - in no small part by giving myself permission to disconnect for a while, to cut down my rss reading, to not attend an industry event for a week+. I’d suggest to you that you give yourself a day or two (at least) each week to do something aside to technology - dinner with friends etc.

    Anyway good luck and keep up the great work! I think in the past few weeks Techcrunch has been getting even better - though the pace does seem to be accelerating.

    Shannon

  29. Kevin Burton

    May 22nd, 2007 at 2:15 am

    You might be getting your wish.

    There are rumors of a few big .coms which were funded a few years back about to crash (and hard)…..

    Me? I’m just going to keep building my company on real revenues and real customers. It’s crazy but it just might work!

    Kevin

  30. nope.

    May 22nd, 2007 at 2:15 am

    A CEO who would cry just because they don’t get TechCrunch coverage is a CEO *guaranteed* for failure, and in my opinion, terribly unsuitable for leading a company of any sort, any size. You should’ve just hung up on the spot, and hopefully throw in some true words to get them started on journeys better suited for their types.

    Maybe you find it a whole lot less fun because the crowded space is suffocating. But as the leader of a blog with tremendous leverage, I don’t understand how you can find all this so depressing on a personal level.

  31. Kevin

    May 22nd, 2007 at 2:16 am

    Mike, you should come out here to La Rochelle, France. Zero funding here, or burgers, or start-ups except mine..so maybe not then!

    We have built a small blog community without funding. We have an actual business plan that should make enough revenue for us to pay bills and eat and maybe take a holiday, we didn’t start to exit. We only started our site because of frustration and thought maybe we’ll make a couple of quid along the way.

    We have a re-launch in two weeks and our technology will get us coverage, unlike now!

    Our users are driving our site forward, and dictating its path, not a VC firm.

  32. josh carrier

    May 22nd, 2007 at 2:26 am

    Could articles like this be a sign that the negitivity is already setting in and a crash is just around the corner!!

  33. JohnN

    May 22nd, 2007 at 2:27 am

    Well i think the boom can be felt outside Silicon Valley. I am from London, UK and primetime news did a story on the “new tech boom”. I saw champagne, i saw hot chicks, i saw something desperately wrong.

  34. Guy Dickinson

    May 22nd, 2007 at 2:27 am

    I think the nirvana you seek is visible in Copenhagen next week - get on a plane and hang out at Reboot (reboot.dk) for a couple of days - you’ll see people and ideas that exist purely for the idea and the fun of invention.

  35. Shervin

    May 22nd, 2007 at 2:35 am

    Mike,

    Come stay with us in DC for a while! I’ll get a couple bushels of crabs ;)

    Cheers,

    Shervin

  36. Mike D

    May 22nd, 2007 at 2:38 am

    The idiom “You reap what you sow” comes to mind after reading this post.

  37. Simon

    May 22nd, 2007 at 2:42 am

    I think this is a great story about geography, economics and the internet. TC has to be rooted in the Valley and yet its influence reaches far beyond.

    This is a first thought but perhaps you could consider fragmenting news items into categories so users could search by business stage, category or location.

    You could then focus on the start ups that interest you and migrate the more irritating ones to a different category like ‘Valley Mutants’ or something which could have different writers.

  38. Conor O'Neill

    May 22nd, 2007 at 2:52 am

    Dang, Lenny beat me to it.

    Seriously Mike, I know you’ve worked in Europe before. It’s an exciting time over here right now and because funding is still very tough to get, the craziness of the last boom hasn’t happened here yet.

    There are a bunch of us trying to build great tech companies in Ireland and, just as importantly, trying to build the start-up culture here. Whilst the Lee Valley or the Bandon Valley may never become the next Silicon Valley, from adversity comes greatness.

    Hopefully catch you at TheNextWeb in Amsterdam.

  39. Alex

    May 22nd, 2007 at 3:12 am

    Hey Mike,

    if you wanna see a community that it not full of bozos and not totally influenced by the big money then come over to ApolloHunter.com where you can see some cool Apollo apps.

    We are all early adopters of Apollo and most developers are doing the stuff in their freetime.

    Cheers,
    Alex

  40. Dallas Freeman

    May 22nd, 2007 at 3:26 am

    very good point, I’ve seen that happen a lot lately

  41. Matt

    May 22nd, 2007 at 3:26 am

    Mike,

    Your post is very interesting and I completely get your point :

    too much money = bad Atmosphere

    But for a lot of web entrepreneurs around the world, the Valley is THE place where people understand what they’re doing and where they’re going. The whole mentality is about what is next great idea and where is the next dream team…

    In France and some other European countries, if you talk about innovation, it has to be a technology, a pattern, an amazing invention, but it can’t be a new kind of service. That means it’s incredebly hard to get funded when you have a new service idea. The next Google or Ebay could never come from France, because the idea is too simple for investors.

    Once again, I understand what you say, but to me it’s like Paris Hilton saying Petrossian Caviar is aweful because there is too much of it in the restaurants she goes to.

    You leave in a very exciting community, in an amazing part of the world, where maybe parasites are hanging around… but you might be a bit spoiled?

    Long life to TechCrunch and to the Valley!

    M/

  42. janko

    May 22nd, 2007 at 3:26 am

    Interesting article for someone who also lives in a valley, but more like anti-silicon one… you know.. the tractors farms and stuff.

    I agree with your point…

  43. Henry Stanton

    May 22nd, 2007 at 3:36 am

    Lack of access to capital is one of the biggest brakes on development – it’s a shame to see VC saturating the tech industry but maybe the surplus will eventually trickle elsewhere.

    It strikes me that the industry is a victim of its own success though, the same thing happened in the UK in the last boom. There was a group of passionate innovators that met in a church hall of all places, to discuss the latest developments in mobile technology (it was called WAPWednesday), run by a university student. However, within months the venue changed, big money got involved, big cheeses from all the mobile companies started attending and it became a hysterical money chase. It was depressing, but it’s surely just what happens when potential revenues expand beyond a certain point – the capital flows increase commensurately.

    It’s also a shame because VC is not the only form of funding after all – I started a web design company around the same time with a design firm that put £15,000 cash in for a 20% stake based on nothing more than their faith in us. We grew organically to a firm of 30 employees and an office in Australia.

    Anyway, I left because I didn’t like the money-chase and wanted to work with passionate, creative people so I became an IT teacher in a country school, which I love.

    And I’d just like to say that Techcrunch is a brilliant resource for us - my students are constantly referencing it and love finding out about the latest developments weeks before they’re reported in the mainstream media.

  44. Rex

    May 22nd, 2007 at 3:41 am

    Dude, if we took a poll on who’s to blame for Bubble 2.0, wouldn’t we all yell TECHCRUNCH? I remember seeing you at a conference not even six months ago declaring, “no, we are not in a bubble, this time it’s different.” Then asked the same question many times from different angles, you were persistent on this matter. I can remember thinking very clearly: “That dude’s gonna eat this words.”

  45. D

    May 22nd, 2007 at 3:42 am

    Can’t the fault of this issue be partially attributed to you and those like you? When you write story after story of new “Web 2.0 Startup + 1 feature”, and run on about financing numbers and valuations, don’t you think you at least perpetuate, a bit, the notion that success is gauged only by those metrics, or that to be successful means only striving for those metrics?

    I think there is a bubble when the pundits are harkening back to the days of yore and reminiscing about a time when the issues and subjects that they write about didn’t exist. It seems though, that they’re forgetting why, and what, they are writing and why their readership abounds.

    Get real. Where’s Drama 2.0?

  46. haha

    May 22nd, 2007 at 3:52 am

    Mike - there is ONLY one thing you can do.

    Come to the land downunder - where the beer does flow freely, where the world is more laid back, where startups struggle and cant get funding.

    Where an idea is discussed between mates, where things still do get made up over a few beers, and were the burgers are fresh.

    I say FK silicon valley - Australia is closer to Asia anyway - and they have 1/5 of the worlds population compared to the US. Silicon Valley will move in the next 5 years - the money will go to China as the rates of PHDs and Masters go up.

    Australia is right in the action of it all, but still with only 20 million people - we love our beer, we love our tough struggles and we definately are not silicon valley.

    Gday mates :)

  47. Phil

    May 22nd, 2007 at 3:57 am

    Very cool article Mike.

    I live outside of the valley and it’s awesome to have some insight of what’s happening there. I have a popular blog that I started two years ago. No funding, no business plan: it started in my bedroom and I’m still running it from there. Now I have a full time editor and some part time bloggers who work for me. It’s very cool but’ve I always been fascinated by Silicon Valley and I’m even thinking of moving there to take my business to the next level.

    I will always be more interested in having a beer and a burger with other geeks and discuss new ideas rather than having to talk with greedy venture capitalists, but money is part of the game and it’s a reward of all the hard work and time you put in building the future of the internet.

    Anyway, I love Techcrunch! Thanks for giving us our daily dose of geeky news!

  48. Raf

    May 22nd, 2007 at 3:58 am

    It’s great reading about all the Valley shenanigans on TC. Maybe you should come down to Christchurch, NZ for a change. We’re so chilled out no one even knows we exist :-)

    I hope the party keeps going for a bit longer. Nothing worse than turning up just as the drink runs out and the speaker system blows up.

  49. Jonathan

    May 22nd, 2007 at 4:08 am

    sounds like you need a beer and a break, pop down to brisbane for a few days - plenty of beer here ;-)

  50. Fred Oliveira

    May 22nd, 2007 at 4:08 am

    Best post I’ve seen here in quite a while, Mike. Spot on.

  51. Campbell

    May 22nd, 2007 at 4:12 am

    Dude sack up, and make a difference,
    you and a few others hold enough sway/publishing power to make things change, so why not give it a go.

    If its something you believe in that strongly I would have thought you would already be doing this.

  52. Tom N

    May 22nd, 2007 at 4:12 am

    Definitely the best article you’ve written in a while. You should write a few more opinion pieces a month that focus on the technology/entrepreneurship culture, rather than just on the businesses themselves.

    Cheers from London.

  53. Mark Evans

    May 22nd, 2007 at 4:14 am

    Mike,
    This is a post I didn’t really expect to see coming from you but it’s refreshing to see someone stick up their hand to say something most people are trying to ignore or hopes goes away. Of course, sticking up your hand when most people still believe the good times will continue to roll can be a difficult place to be but good on you!

    Mark

  54. Dan

    May 22nd, 2007 at 4:17 am

    Mike: All due respect, but what you are saying here is essentially that it’s not fun for the “locals” anymore because it’s summertime and it’s hot and all the people are there crowding the beach and ruining the scenery. So it’s not that the valley needs a downturn, but it’s that you would personally prefer for the worst of the tourists to go away.

    You also have to think proportions. In the glory days you mention, it’s not that there are fewer entrepreneurs; it’s just that only the most emphatic and authentically convicted ones take action. This doesn’t mean more or necessarily better innovation — it simply means that it is more relaxed like the Fall or Spring, and therefore much more fun for the gatekeepers, such as yourself.

    I agree with many of the above posters in that in the end, much of the tech innovation will crop up elsewhere. Silicon Valley has the connections and the quick feedback pools, but it is also not largely connected with mainstream culture and has an over-emphasis on early adopters. I thus believe that most of the lasting innovations that emerge on the web will seed outside of the valley and grow steady followings over time.

    It’ll be interesting to see how it pans out. We’ve yet to see the return of the tech IPO market, so I think the peak is still far away.

  55. Ernstjan Albers

    May 22nd, 2007 at 4:19 am

    Mike, I’ll buy you a burger at the next web.

  56. Adam Jusko

    May 22nd, 2007 at 4:24 am

    As someone whose success has come thanks to all this money flowing in to the valley, it’s interesting to read you grumbling about it. Two old cliches come to mind:

    Don’t bite the hand that feeds you.

    Be careful what you wish for.

  57. Ben Yoskovitz

    May 22nd, 2007 at 4:25 am

    Mike,

    Move to Canada. (I don’t mean that in a bad way, I’m in Canada.) Lots of talent, creativity, less of the environment you describe…although we’d like to capture some of the Valley’s essence, Canadian markets will never have that same feel you describe.

    An