Dot Bomb
"The aphorism 'content is king' was so common in New York that its validity was
scarcely questioned . . . if content would be king, New York would be its throne."
— Casey Kait and Stephen Weiss
In 1996, right at the beginning of the Internet boom, I landed a writing position at
America Online, where as a freelance contractor, I was deprived of the lavish stock
options that had been heaped on staffers. A casual atmosphere populated by 20- and 30-
something bright young visionaries had established the company (back then) as a hotbed
for digitally-inclined talent who worked hard and played even harder.
The consistent slew of perks, parties, happy hours, and work-from-home policies had
created what appeared to be the ideal environment for those eager to extend their
collegiate lifestyles into the "real world", if you will. And after a few years of a jolly
good time, the long-anticipated prize AOL offered was the main incentive: cashing in
stock options and retiring -- which many did. By 1998, a couple of friends had already
turned in their notices, called their financial advisors, and eventually walked away with a
cool million, all before turning 30.
California's Silicon Valley is indisputably the home of the Internet, where Mosaic (which
eventually became Netscape) was born. However, the rising surge of the world wide web
had also swept the East Coast by the mid-90s, and its headquarters was in New York
City, a.k.a. "Silicon Alley," which is the basis for Kait and Weiss's book, Digital
Hustlers: Living Large and Falling Hard in Silicon Alley.
Live large? They sure did. Fall hard? Absolutely. By mid-2000, the death knell for the
great Internet hope had been rung, as one company after another laid off staff, downsized,
or completely shut their digital doors. But for a few years in between, the "digerati" ruled
the roost and astonished the corporate world with their multi-million-dollar digital
revolution.
Digital Hustlers serves as a diary of the main players involved in the heydays of
New York's Alley, and chronicles their thoughts, insights, and hindsights in interview
format. Kait and Weiss, both Silicon Alley veterans, interviewed a slew of digerati, and
provide a step-by-step analysis of the rise and fall of several Alley companies and their
larger-than-life entrepreneurs.
The story of the digital revolution is, after all, the great American success story: young,
intelligent, enterprising youths with dreams of changing the world and raking in mega-
bucks. As the authors explain: "By the year 2000, Silicon Alley was employing 250,000
workers and producing nearly 17 billion dollars in revenue." Whereas California was
more focused on the technology aspect, New York concentrated on "content," thereby
luring employees whose backgrounds were more ingrained in the arts and media. As
Kait and Weiss write: "Geek chic quickly became the new gold standard," and
personalities such as Josh Harris, founder of Jupiter Communications and Pseudo.com,
Scott Kurnit, founder of About.com, Nicholas Butterworth, CEO of MTVi group who
helped build Sonicnet.com, and Craig Kanarick, cofounder of Razorfish, were the toasts
of the town.
Most entrepreneurs initially started their companies at home or in a shoddy office with
"literally one little desk, two broken chairs, and a computer (which is how Feed.com
founder Steven Johnson describes the magazine's original settings). However, by 1996,
the revolution was gaining momentum, as the media and the rest of the world tuned in to
the hype surrounding the Internet, and money started pouring in as one investor after
another smelled the lucrative potentials of investment in online ventures.
Kait and Weiss explain the initial hype over Silicon Valley (which had already enjoyed a
notable history), while its counterpart, New York's Alley was ignored, since the "get-
rich-quick tales" were largely based in California. But the savvy New Yorkers quickly
learned to court the press and generate the necessary buzz, frequently with a lot of help
from their all-night raucous parties, invincible demeanors, and relentless promotion of
their start-ups. As Razorfish cofounder Craig Kanarick explains: "We were all a
pain in the ass, and we were all brash. It was all about being brash and being different and
being new and being independent . . . and being, Fuck you, Mr. Big Company, you
don't know what you're doing."
The greatest threat the Internet ventures posed was in disrupting the old boys' network of
the old economy. Media companies were predominantly affected, as talented employees
realized that there was serious money to be made online, so why settle for a measly entry-
level publishing salary? Just learn HTML, and pour your creative juices into dot-coms.
On the flip side, though, the arrival of start-ups fueled the economy greatly, and resulted
in the creation of thousands of employment opportunities.
During this time, the cyber cafes were in full swing, and the lax work atmospheres of
online companies had found their way into media coverage. Showing up late, smoking
pot and snorting coke were often the norm. According to Pseudo.com's former executive
producer Robert Galinsky, "In the first few months [the company] was a
clubhouse. . . . Smoking marijuana? Could be half the company within the first year, on the
job."
The bubble soon began to burst, however, when many Internet ventures realized that
advertising was the driving force behind successful content, and a lack thereof, would
lead to depleted funds. Which is exactly what happened in many instances. Previously
successful companies such as Echo and Word.com had folded by 2000, followed by a
slew of others. In addition, the brash young entrepreneurs were now being replaced by
the same "Mr. Big Company" types whose motto -- according to Kyle Shannon, founder
of UrbanDesires and Agency.com -- was: "Get in a manager. The wacky kid with a
vision? Get him out of here."
Despite the tremendous successes of a few Alley ventures, such as Razorfish (Kanarick
was worth $200 million at the age of 33), DoubleClick, and TheGlobe.com, "the vast
majority of the new millionaires were rich only on paper." Reality had stared to set in. By
March 2000, CDNow and a number of other corporations were in trouble financially, and
the news of their shaky status served as a sort of domino effect, as company after
company began to fire staff, or in most cases, totally collapse. A popular site called
FuckedCompany.com served as a grim reaper as it listed the impending failure awaiting
online corporations. As the authors explain:
"Perhaps even harder hit than the public companies were the thousands of
start-ups that had yet to go public, which were often suffocated when angel investors,
many of whom had made their fortunes on the tech bull market, could no longer provide
new investment money."
The end was near and within a few months, thousands of former dot-com employees,
spoiled by high salaries and promises of cyber celebrity dreams, were back on the streets
searching for employment. The fallout also affected Silicon Valley, which is still the
lifeblood of the Internet industry, and thousands of San Francisco Bay Area companies
suffered -– and are still suffering -– from the crash.
Digital Hustlers serves as homage to all those brash young things who had a
digital dream, and for a few years, rocked the world. The book offers unusually
interesting insights into the lives of the industry's stars and their influences on the dot-
com phenomenon. It's important to note that this is very much a New York story, and the
book's wider audiences will inevitably be readers who are fascinated by the inside story.
(As an aside, Kait and Weiss should also plan a similar project, this time focusing on the
equally gripping legend of Silicon Valley.)
Having walked away with billions of dollars, a few of the dot-com stars can rest assured
that their efforts and visions have proved effective: practically every nation in the world,
after all, is in some fashion, connected to the Internet, and if there really is a "global
village," it exists online. This revolution has been won, and despite its current shakiness,
its future should prove even more interesting.
— 2 October 2002
