“The aphorism ‘content is king’ was so common in New York that its validity was
—estioned . . . 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.
Casey Kait and Stephen Weiss
Living Large and Falling Hard in Silicon Alley
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.