Entrepreneurial drive revives in Silicon Valley
MENLO PARK, CALIF.
Not so long ago, it seemed that the tech entrepreneurs who walked into Bill Ericson's office looking for money lacked one key piece of equipment. Along with their charts, graphs, and crisp folders, he suggests, they could well have used a combat helmet.Skip to next paragraph
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"It was like walking across a battlefield," says Mr. Ericson of Mohr, Davidow Ventures.
Indeed, Silicon Valley's story is, by now, a modern-day Homeric epic, writ across the austere friezes of Wall Street in diminishing red numbers. Once the engine of perhaps the greatest economic boom in American history, techies became the untouchable caste of the national economy, seemingly defined only by the unprecedented magnitude of its failure.
These days, however, Ericson is able to suppress a grin only with great effort. He cautions that he "isn't about to do handsprings," but then sets off on a verbal routine of gymnastic exuberance worthy of Kerri Strug. Good times may not yet be back, but optimism has returned to Silicon Valley.
No, the nascent tech rally in the stock market is not the second coming of million-dollar stock options and all-expense-paid business trips to Fiji - at least not yet, most here say. But it may well mean that the worst times are past, and that technology will no longer inhibit the national recovery.
Moreover, it is times like now, when scientists and entrepreneurs can fully turn their attentions toward a new generation of innovation, that the technological cornerstones for the next boom are laid. "Today, a lot of that noise [from the Internet boom] is gone," says Ericson. "It is an environment of stability ... where you can work toward building up a good idea." Adds fellow venture capitalist Allan Thygesen of the Carlyle Group in San Francisco: "It is no different from the first half of the 1990s."
In other words, maybe Dave Corbin can now leave the fatigues at home.
In the parlance of today's Silicon Valley, Mr. Corbin has a "real" company - one not built on sock puppets selling dog food over the web. He's working on a device that will better cool computer chips, allowing them to run hotter - and potentially three to four times as fast. Still, only a few months ago, he might as well have been asking for donations to the Saddam Hussein Relief Fund.
Today, by contrast, he is in high demand. Half of the 10 venture capitalists he went to for money said they were interested in his business, Cooligy. "The biggest difference is that when you call and say you've got this new idea, they say, 'Come in and let's talk,'" says Corbin. "A year ago, they were saying that they were not doing anything."
The change has come about so gradually that people are only now willing to talk about it. Everyone, after all, was seared by the Internet's spectacular immolation, and all go to great lengths to suggest that the beginnings of a turnaround do not mean a return to the excesses of the late 1990s.
A recent opinion poll found that only a modest 45 percent of respondents said business would be better in a year. But that was up from 35 percent in March, according to the poll by the Survey and Policy Research Institute at San Jose State University.
There are other positive signs as well. Top tech projects are increasingly getting bids from multiple venture firms, and the best are even going public. Meanwhile, the froth of the Internet boom has been skimmed away, and the companies that survived have become leaner, allowing them to turn a profit more easily - and improve their stock price.
Most important, though, American businesses have again begun to buy new technology.