Category: Technology Author : Steven Hodson Posted: October 11, 2008
Tags : economic crisis, positive attitude, technology
Can we please get some sensibility here.
Sure the rich folk might have to tighten their belts; but you won’t be seeing them standing beside the rest of us in lineups to the foodbank. Yes people living the high life on trumped up paper valuations for stupid ideas might actually have to learn what a business plan is; but you won’t see them on the customer side of the soup kitchen counter. Along with this the stock market is beginning to resemble the deck of a ship in a storm with its up and down movement; but unlike the 1929 crash no one is jumping from windows or putting a bullet through their heads. Now that was a crash that forever changed the world; or at least the US, but to equate this shakeout of the market on the same footing is being nothing more than a fear monger.
In the tech world we obviously learned nothing from the dotcom bust of the late 90′s because in less than a decade later we find ourselves in the same place as before. While this current disturbance may have been caused by the greed of people involved in the housing market, the tech industry – especially the whole Web 2.0 sector can’t escape some of the blame. That doesn’t mean that for the majority of people in the industry that the sky is falling. As Duncan said here yesterday in a post
I see the glass as more than half full. Yes, Internet stocks are taking a dive, but only because the market had factored high projected growth into their valuations. The thing is though, not one analyst has yet predicted a decline in internet advertising, every single one of them is still predicting growth, and in double digits at that. More money is going to be spent online, just not as much as some had previously predicted. If there’s growth in web advertising, there’s growth in revenue to blogs and 2.0 companies that rely on advertising. That’s not bad news, that’s good news!
I agree with him and to the point that what is happening was inevitable and a good thing for the industry as a whole. For too long we have been led to believe that we can just waltz around creating business that have no tangible income stream. We have been lead to believe that advertising is the end all be all for business on the Internet when in fact it is and should only be a part of the business scenario. Even as we climbed the hill of paper valuations there have been more than a few companies that bucked the trend of empty business plans and actually built their tech business on solid foundations.
Early this morning Mark ‘Rizzn’ Hopkins who is another person who sees the upside to all this wrote on Mashable about some web businesses that will survive this downturn. In the post he says
I think that our business, that is the so-called Web 2.0 and Social Media business, is probably most suited to make it through tough times unscathed as compared to the rest of the economy.
We’ve fortunately made it past our tipping point. The world knows that they need to be on the Internet, they know they can use it to efficiently connect to new and existing customers (something they’ll be wanting to do more than ever, soon), and we have ironed out the ways to do it. Look at this as our distribution phase. We’ve been innovating for quite a while on the technology side, now we’ll be turning our attention on innovating and making more efficient the business side.
Businesses are going to have to realize that if they have a solid idea they equally have to have a solid plan to make money with that idea. We can no longer just whip up a few pages of HTML, plaster it with some nice colors and big buttons and plan on living off of VC millions in the hope that at some point in the future that advertising they plugged in will pay the bills. We need more companies like Thrillist which Allen Stern talked about yesterday and provided a great video interview with founder Ben Lerer. While Thrillist might not be your typical Web 2.0 company they are a profitable one because Ben had a solid plan that has already paid back their investor.
Mark Evans had a great post today where he also questions this “the sky is falling” attitude that is being promoted throughout the blogosphere by some of the big names. In the post Mark agrees that the current situation is volatile but people are getting carried away with the doom and gloom
Yes, the global economic landscape is volatile and there are dark clouds of uncertainly looming but everyone seems to be jumping to conclusions without offering much perspective.
The fact is that when even a report by bloggers about a possibility of a sub $1,000 laptop from Apple (which was first reported here by Duncan) can see the stock swing upward we have to realize that there is indeed positives to talk about. As Aaron Brazell notes in his post about the upswing there is something in this news that bloggers – especially the A-List ones need to realize
I am in no way suggesting people should go about trying to manipulate the market by creating stories or otherwise fabricating false positive pressure on the market. That is a crime. However, it’s important for blogger to recognize their ability to affect the market for the positive or negative.
And the pressure remains on the top-tier bloggers to use that power wisely and recognize that their words matter. If ever there was a “responsibility” at the feet of these bloggers, it is now.
What do we get instead? We get people like Robert Scoble who have for the last few days done nothing more than highlight everything bad going on. Even when people try and point out to him how this might be the wrong way to go about dealing with this issue he harangues them in public and being nothing short of idiots who don’t have a clue of what is going on. This was nowhere more apparent than on FriendFeed yesterday in an exchange between him and Mark ‘Rizzn’ Hopkins
Sure there are some hard times ahead, I don’t deny that but one has to wonder just how much of it is because those empty promises of massive fortunes to be made along with typical human greed has come home to roost. We can all run around like chickens with our heads cut off like Robert or we can stop the bullshit and give ourselves a good shake knowing that we will come out of this. The question is whether we will come out of it smarter or just to turn around and start doing the same of nonsense that got us here.
People like Robert need to stop the doom saying and step up to the plate and start using their personal soapboxes to help us through this trying time; and trust me it will try the best of us. That doesn’t mean though that we don’t have the ability and the power to change what comes next for the better. I just hope it won’t be another round of buzzword labels and powder puff businesses because that will only land us back in the same place a few years down the road.
Oct 11, 2008
Check out the sentiment by @Ed_Dale at
Oct 11, 2008
Keep it coming, Steven. All those you mention are being leaders in this space. I don't think anyone is denying the hard times, but people like those you mentioned and Loic at Seesmic are dealing (and coping) rationally. Well done.
Oct 11, 2008
thanks Aaron. People talk about the power of blogging well this is one area where we can show if not just more than hot air. Positive attitude can make a lot of difference and this is something all bloggers in the tech field show be doing – be positive about our industry in the face of hard times. I'm not saying to sugar coat everything but excessive negativism can be exceptionally harmful
Oct 11, 2008
Sensible conclusions.
There's a good chance that US and European economies will head into recession next year due to the tightening of finance but it's crazy for businesses with millions of dollars in the bank to cut infrastructure and spending now — they'll push the economy down earlier and probably deeper than is necessary.
Don't feed the fear, folks!
Oct 11, 2008
Well you become a prophet of your own doom, or in other words, creating a
self-fulfilling prophecy. Especially when you are well-read or listened to.
Oct 11, 2008
i have unfollowed scoble because of his posts – out of control.
Oct 11, 2008
Here's an answer: http://scobleizer.com/2008/10/11/sky-isnt-falli… — also I've put up several videos this week of entrepreneurs who've done some cool stuff. It's funny that you didn't give me credit for that or link to them. These are real companies, why don't you help them out by giving them exposure? And Allen Stern? So you'll unfollow just because I'm reporting the news as I'm seeing and hearing it? Ahh, you can't handle the truth. I guess you thought things would be great on Monday right before the market had its worst week ever. Worst ever. And I'm supposed to blow smoke up your behind? Got it!
Oct 11, 2008
I don't always watch the videos you put up Robert so really why would I link to them. If I had I would have just as I have linked to posts by people who are trying to be positive because I think those voices are being drowned out in the doom and gloom noise.
I don't agree with Allen unsubbing from you either because I don't believe you can argue either side of the coin if you don't listen to both.
As for the worst ever week .. that is just baseless fear mongering talk Robert .. when people jump out of windows or put a bullet in their brainpan then you can start talking about worst ever. Let me know when you on the side of the soup kitchen or foodbank where you are being served then talk to me about the worst week ever but then you'll just be joining the millions of people who are already there long before your worst week ever.
Oct 11, 2008
Steven: Francine Hardaway just called me. She told me that the top business leader in Phoenix committed suicide a couple of weeks ago due to financial ruin. Please don't joke around about that. People in financial pain need us to be there for them at this time and don't need more encouragement to do stuff like that. Like I said, this storm has not yet moved through all of society. The worst effects have NOT yet been felt. That's what I've been saying and you are trying to get me to put on a smile and say “everything is OK.” Sorry, I'm not going to do that. This was the worst week EVER in the market. Both points wise and percentage wise. To try to say otherwise is, um, putting lipstick on a pig.
Oct 11, 2008
Not to make light of a very sad and terrible loss but if this happened a couple of weeks ago this was before the worst week ever as you put it and I never joke about any loss of live Robert. The facts are that since the start of what you call the worst week ever nothing like this has happened.
No-one is asking you to put any lipstick of any shade on this pig Robert all I am saying that this excessive negativism isn't helping to ease anyone's uncertainity because we all know that this will pass but we have to start planning for that time now which means looking positively at what is happening now so we can learn those valuable lessons.
Oct 11, 2008
I've been writing all week long too about where winners and losers will come from and on Thursday did a Webinar about how to build a scalable web service, which you also didn't link to. Instead you linked to only my doom and gloom posts. Makes me realize that you are in it just for a fight and not to look for the good in people. I've written a lot of posts about companies that are positioned well or things companies could do to shake customers out of the trees. I notice you didn't link to them, either. That's cool, I only linked to this post because a good shit storm is good fun, isn't it?
Oct 11, 2008
Robert kiss my ass. You have no right to say that just because I didn't link to a couple of your posts that I didn't know anything about.
To suggest that I am only in this for a fight is insulting and pompous of you. Just because I am not a Scoble fanboi and link to every single one of your post it doesn't mean that I an an ignorant idiot as you aould like people to think I am. AS for not caring about people maybe I care more because I believe in our inherent ability to rise above adversity like this and come out of the other end better than before. I happen to believe that if you give people a reason for optimism they will rise to occasion and overcome adversity. If that is wrong then I am truly the idealist that no one thinks I am and you know what I can live with that.
Oct 11, 2008
Kissing your ass isn't something I'm likely to do. I have no right? Heheh, what a wonderful world this is. It's a freaking blog. Of course I have the right to tell you off. You take the bulk of my work this week out of context in this post. You're the one who wrote, and I quote, “We get people like Robert Scoble who have for the last few days done nothing more than highlight everything bad going on.”
That is simply NOT true. So now YOU can kiss my ass. Thank you very much.
Oct 11, 2008
The only place I see any of your work – which is usually comments – is on FriendFeed Robert and usually only via FOAF since I am not subscribed to you in any fashion. So all I have seen has been your exclamations of “how bad things are” on FriendFeed because someone I am following is following you. So please tell me how would I even know about these great video posts you are talking about. Or are you suggesting that because of who you are we all should know everything you post just because you wrote it? Give me a break.
I have taken nothing out of context because my context is what has been showing up on FriendFeed with your name attached. So would you like to try again Mr. Scoble.
Oct 11, 2008
All of these posts have shown up on FriendFeed. The fact that you aren't even subscribed to me there tells me everything I need to know: you got your facts wrong and are taking me out of context because of what YOU saw and you can't even admit it. 90% of my professional work is video and for you to claim you have no idea about all that is depressing if you are going to be part of this community in any serious way.
Oct 11, 2008
and you have just confirmed to everyone how you think you are so important. By suggesting that because I don't read every single one of your posts and I don't watch every single one of your videos I'm not a serious part of this community is insulting and demeaning.
You are not the fountain of all things of importance Robert. your work is not the seminal repository of everything of importance. It is too bad you can't get off of your high horse and realize that just because someone decides not to read everything you do doesn't make them any less of a person or even a blogger.
Oct 11, 2008
When you write “We get people like Robert Scoble who have for the last few days done nothing more than highlight everything bad going on” YOU have the responsibility to get it right and do some research about what I actually DID say over the last week.
You got it wrong and the fact that you are continuing to attack me tells me just how interested you are in the truth.
Oct 11, 2008
Boys, boys – grow up! Squablling in public is both undignified and unedifying. It has become personal when the post was rightly about the realities of current economic situation as pertains technical sector.
First, I agree that comments that appear to only highlight one side are misguided. Most of what I find written, in popular blogs as well as in papers is immediate reactions on the events. It is 'fire fighting' using words. We should remember that these events did not spring up from vacuum. They are consequences of the way business has been done for far too long – as this post shows with specific examples. The fact that such ways of running business have not only been funded but also celebrated and praised by the same sources that cry 'foul' now shows that they are part of the problem.
This is a systemic issue. Technical business is no different in underlying basics from other businesses. So when those in finance see opportunities to make big money and fast, they go for it, irrespective of the sustainability of that business. Thus, the arena is populated with too many flashy enterprises led by big headed individuals and funded by greedy financiers. In the interim, the ideas for business that take time to get to market or have steady but average profits forecasts are overlooked. Why do I say that all this is a systemic issue? Well because this cosy set up created a feedback loop that operated as a virtuous cycle feeding on itself. Unfortunately, Virtuous Cycle is unstable structure and easily flips into a Vicious Cycle when the rules guiding feedback fall apart.
Therefore, yes life will be hard for all those who lived of fantasy proceeds for too long, whether they were crediting the 'fairy tale' enterprises or running them. For the rest, it will be tougher life but then they are resiliant and know how to deal with hard times.
And yes, the businesses that will survive are not populated with people who primarily look for higher financial compensation. Their employees, suppliers and customers are loyal and want to do business together. That will remain the case now and only bring them closer as credit crunch starts to bite all.
Oct 11, 2008
“You want the truth – You couldn't handle the truth” ooppss sorry couldn't resist
Robert I will concede that I should have looked further into what you have written and in that way I was wrong. However much of what you have said that has shown up on the FriendFeed time line in relation to the economic down turn has been negative. I don't follow you hence my lack of interest in what you have to say.
I also still stand by what I wrote and have said in follow up to that. Plus for your information I do care about the truth.
Oct 12, 2008
I don't mean to get in the middle of this, but a good friend of mine was financially ruined this summer and, seeing no way out in a business where neither he nor his father ever lost a dime for an investor in 43 years, committed suicide. He left a bunch of investors, all friends, who are wiped out by a combination of his failure (real estate hard money lending) and the demise of the stock market. Many of them are already retired. These crashes don't come all at once. Scott's suicide came from the real estate market, but his friends are now suffering cascading losses from both real estate AND the stock market.
I am a Pollyanna, as people go. If you want to see my own post from last week, see http://blog.stealthmode.com to see that I do look on the bright side. But I am also a realist.
We have to 1)try to see around the corner, and 2) not ignore the realities. If we had been more realistic,we wouldn't be where we are now. Not SV, the American economy.
Oct 12, 2008
From one Pollyanna to another: It's not easy to see the downside, even when things are horribly tough and stressful. It seems that fear and worry only makes things worse because, ultimately, things always get better – somehow. We've seen some bad times and, most likely, there will always be more ahead. It helps to find ways to adapt and not expect things to always be the same through life.
Gee, why am I feeling so philosophical tonight? Hang in there, everybody …As hardaway says, don't ignore realities but look for the good things around the corner.
Oct 14, 2008
This is all a matter of perception. Some select to perceive the positive, others that which is negative. Personally, I don't place my trust in “horses and chariots” – but God alone. Come rain, or shine, hell, or high water … what does it help to stress … does that change anything? Live your life today … tomorrow may never come.