Silicon Alley: Noshing Like It's 1999

By Andrew Freiburghouse

Last night, I attended my first Internet startup party in seven years.  I wasn’t expecting to meet any ghosts.   But they were there.

The occasion was Donna Bogatin’s Startup Alpha event at Midtown Pub in Manhattan.  Jupitermedia CEO Alan Meckler gave a nice talk to open things, and then we sat in judgement on a series of two minute elevator pitches from enthusiastic start-uppers. 

Maybe it was the puppet one eager entrepreneur brought along as part of her pitch (and made dance, and gave a funny voice), but what struck me most about today is how utterly referential it is to yesterday, how animated by strings to the past.

By yesterday I mean, of course, the giddy years of 1999 to 2001, give or take the few dark, silent months after 9/11.  March 2000, if you want to assign an exact date: the peak of the greatest economic boom in world history, and the locus of some of the most insane and idiotic behavior ever known to American Business.  Pets.com, Kozmo.com, Webvan, etc., etc. 

Crazy talking singing dancing puppets!

And we could still hear them at last night’s party — still echoing, almost a full decade later.   Take still-bitter keynoter Meckler, who called the JP Morgan bankers who bailed on him back then when times got tough “incompetent backstabbers.” Meckler then explicitly compared Facebook to the dot-bombs of yesterday:  very cool, but highly overrated.  Zuckerberg, he announced, should “take the money and run.”  Just like the folks at TheGlobe.com should have done in early 2000.

And then the lady entrepreneur busted out her puppet.

I spent the last half hour of the night talking to David Levy, founder of TigerBow.com (its tagline is: Making shopping social).  We talked, at first, about his new business, which enables people to purchase gifts more easily and instantly, from mobile phones.  He was excited about it, clearly.

And then, inevitably, our conversation turned to remembering back then.  He was working at Hambrecht & Quist in those days, and things were just…well, things were just plain nuts.  And then things got just plain nuts in a whole different way.  And not a good way; more like a falling off a cliff way.  David is still paying back a loan he took out so he could participate in an “employee-funded venture capital fund.” 

Before we knew it, five other people had joined our little conversation, interjecting their own experiences of then

I was surprised at first — but on second thought, it made perfect sense that New York’s startup community should be so haunted by the past.com.  In Silicon Valley, the bursting of the dot.com bubble was traumatic, but there were still enough successful survivors of  the crazy talking singing puppet era – eBay and Google, most famously — that the crash is today almost forgotten.   

But for New York’s “Silicon Alley,” there were no successful survivors.  NYC was the very epicenter of wannabes and dumb money.  And perfect failure is something you can never forget. 

I may not be a native, but it’s obvious even to me that there are two things New Yorkers don’t like being:  failed wannabes and dumb money.  So no, Silicon Alleyites most definitely have not forgotten, and are intent and intense when they say:

It’s not going down like that again.

And they say that a lot.  Even if they’re not saying it in so many words, they still mean it.  Especially if, like me, you came out here from California, land of the successful startup. 

Alleyites feel a desperate need to convince you.

And they do – mostly.  The entrepreneurs I saw and talked to last night were, without exception, smart, serious people.  Every pitch thrown to the crowd included mention of hum-drum business realities like sales, revenue, and profits.  “Cool ideas” without “monetization opportunities” were beyond passé.  You’d get heckled worse than a Mets fan at a Yankees game, trying to bring that stuff in this house. 

You want to believe them, to be convinced, but you see that ghost, those failures. 

And so do they. 

To say today is obsessed with yesterday is not to say, however, that nothing has changed and history is repeating itself.  On the contrary, much has changed; New Yorkers are no longer afraid to display, for example, their trademark skepticism, even if that means raining on some eager entrepreneur’s parade. 

Lessons have been learned.  Dreams are not everything. 

But one fundamental thing manifestly hasn’t changed, even here: the unskeptical, believing notion that the Internet is a wonderful place to start up a business and to see how high we can take it.

Advertising-based, international, explosively creative, an overwhelming deluge of sounds and sights, social to the core, and “this ain’t my first time around the block,” New Yorkers seem extraordinarily well-suited to exploit the Web 2.0 phenomenon.  Only out here, last night, they were calling it Web 3.0. 

That’s my first impression of Silicon Alley today: perpetually trying to get ahead of its two biggest, scariest Nemeses-Silicon Valley and its own past.