"That's the textbook definition of a "mania." And that's what the late '90s were. This is how it works: When great new technologies come along, everybody wants a piece of the action. Speculation tends to go hand in hand with entrepreneurship. Capital is infused indiscriminately into the industry. This funds a huge burst of creativity -- which is followed by a Darwinian process that rationalizes the industry."

"Today, it's all about smart money. Capital is expensive, but it's available to truly committed entrepreneurs who have rigorously developed business plans that demonstrate real positives in the near term. In the late '90s, customers got a free ride, and capital underwrote everything. The new logic is, pay as you go."

"In the New Normal, the big shift is from a focus on growing market capitalization to a focus on creating real economic value. The logic of the late '90s was, spend to grow. You could lose $100 million today because at the end of the rainbow, you were going to make a trillion. The logic of the New Normal is, pay as you go. And guess what? Tech works perfectly well that way. It turns out that you don't need $200 million in venture capital in order to build a great company."

"Now there's a premium on a management team willing to commit for the long term. Serial entrepreneurs from the boom are like World War I generals adjusting to World War II conditions. Success has less to do with looking good than with crafting change-the-world (or at least improve-the-world) ideas and executing them every day."

"Finally, don't underestimate the staying power of a technology franchise -- and the fact that things that work often continue to work. Bigger companies have some advantages. They're too important just to go away. The other thing to keep in mind is that technology markets develop over 15 to 20 years. And the way that compound interest works, most of the money that investors make is in the last five years. You don't have to rush."

"By the same token, what made people successful in the late '90s is not particularly relevant right now. The late '90s were all about people who looked good in the spotlight. I call it the cnbc CEO. Now it's about people who get things done. The question isn't, What's your vision for the future? The question is, What are you doing today? You still need a vision, but that is no substitute for a realistic plan. Without a doubt, it's harder now, and you get paid a lot less. But the battlefield promotions go to people who are willing to take the world as it is and make the best of it."