The technology meltdown/ boom

Filed in archive Technology on October 31, 2005

So what's good about the boom going on with Web 2,0 companies? Everybody is talking about the bubble and still keeps buying:

"That may sound absurd at a time when the country seems besieged by ominous economic forces. But a growing body of evidence suggests that tech is taking flight again. Venture capital is flowing more profusely than it has since the late 1990s. The downward trend in IT employment has abruptly reversed course, as companies both new and old hoard engineers. Corporate IT spending, both an engine and an indicator of tech industry health, was up 9 percent through the first half of 2005 and is expected to rise 7 percent more in 2006. Commercial real estate, dead in most tech hubs postbubble, is roaring back.

For a lot of entrepreneurial veterans, conditions today are sounding an irresistible call. Netscape founder Marc Andreessen has a new startup. Raj Singh, who sold one of his earlier efforts, Cerent, to Cisco for $8 billion in 1999 and spent the intervening years producing movies, is teeing up a new company.

From Boom to bust...and back again
The tech industry in many ways is following the classic arc of boom-and-bust cycles produced by transformative technologies of the past, from the steam engine to electricity to the automobile. Each time, the revolutionary technology---the Internet, in today's case---brought a burst of new enterprises that were just too early and got wiped out by brutal consolidation.

"The problem with the last boom was that it was a bunch of VCs getting together and writing on a napkin what the ideal company was," says danny Rimer, a VC with London-based Index Ventures and an early investor in Skype. "The better entrepreneurs today are launching companies based on ideas that are already proven in some way, often with substantial revenues. Today's boom isn't a 'What if?' proposition---it's substantiated."

I also realized the mystique behind 285 Hamilton Ave. in Palo Alto - I could always feel it - but it never came down to me...

We are actually looking for new (sahred) office space in Palo Alto - so if you have room to spare we would appreciate your comment!

Thanks for the hint.