With the recent rise of Web sites such as Facebook and MySpace, it's hard to believe that just a few years ago, the tech industry, along with many investors, were taken for a loop when the dot-com bubble burst and many companies went under.
Sarah Lacy, author of "Once You're Lucky, Twice You're Good: The Rebirth of Silicon Valley and the Rise of Web 2.0," columnist for BusinessWeek and also host of Yahoo Finance's Tech Ticker, writes in her new book, which was published earlier this year, about the rise and fall of the Web both before and after the dot-com bubble burst.
The Internet, which Lacy says was once feared by many, is now being embraced by everyone, businesses included. Perhaps the biggest challenge now, she says, is getting companies and other institutions to embrace and utilize Web 2.0 technologies and Web sites to their advantage.
CDN Now had the opportunity to speak with Lacy about her new book, her bi-weekly column for BusinessWeek titled "Valley Girl," and her thoughts on Web 2.0 and the presence of women (or lack thereof) in the tech industry, in addition to obtaining her advice to start-up tech companies hoping to make waves in today's market.
CDN Now: Tell me about your book and what you call in the book's title, "The Rebirth of Silicon Valley and the Rise of Web 2.0."
Sarah Lacy: I started the book taking people back to the dot-com burst to show just how scarring as it was for everyone involved. To put things into perspective, at that time in San Francisco, we lost as many jobs in Silicon Valley as there currently are working people in San Francisco today. It was a time that really was a social and cultural phenomenon. When I started writing this book years later, people were remembering what happened during the burst, wrong. I wanted to set the stage to really portray what happened and what it was like, because Web 2.0 really reacted and grew out of the burst. After the burst, no one was producing Web companies because they were so brutally scarred from what had happened during the years before. No one wanted to take that risk. The book's about how these guys started believing again and showing how they were able to create new Web companies.
CDN Now: What are two or three of the main key take-aways from your book?
S.L.: It's a great story any one can relate too. It's written for people out of the Valley and also for people who live and breathe in it. You get the best very-American, struggling-to-succeed story with natural heroes and villains. I couldn't have written a better fiction book. It's a fascinating narrative of some of the people who are driving our economy. The second thing I want is for people to come out with a better understanding of what Web 2.0 is. The U.S. has a fear-based culture and so much fear-mongering is present with social networks. In reality, these social networking sites are amazing productivity, social and potentially useful tools for businesses. I felt the more I could tell the story about why these sites were changing society and how they came about, people would see that they're not evil as some of them may be made out to be.
CDN Now: Switching gears, you also write a bi-weekly column for BusinessWeek.com called Valley Girl. What's that all about?
S.L.: Valley Girl is an iconic valley girl phrase. (BusinessWeek) wanted me to do this column because I'm somewhat different from your average BusinessWeek reporter. Where I've really excelled was writing about the cross-ties between finance and business and technology and culture. I was also focused on writing about the culture of Web innovation and the deep economic underpinnings that's happening with the culture and people surrounding it all. We wanted an edgier name for the column that would grab people's attention.
CDN Now: One of the columns you wrote last month titled, "Don't Cry for Us, Silicon Valley," is about the lack of women running technology companies and about some of the women who are doing well in the high tech sector. Do you think it's hard for women to be successful in what may have been seen as a "man's world" and why?
S.L.: I think it is hard. It's an inescapable fact. There are just no women. There are a lot of theories about why that may be. One theory is maybe because the Valley's so male dominated with studies. Others think it's because of this old-boys network that exists and the fact that they just don't want to fund women. I think now we're testing whether or not these theories are true because Web 2.0 has really changed how you start a business. It's not so much about the technology now because you're building out the Web infrastructure. It's about marketing, brand and communications. The excuse of computer science is gone with the Web and you no longer need Venture Capital (VC) to get started. You can raise money. To me, the biggest thing is a lot of women want to have families. It's very different to be the dad versus being the mom. The way business works in Silicon Valley and the start-up scene is that people have to work so hard. Especially if you're an unknown entrepreneur trying to make your mark, you have to be in the scene and be out there building your product. I don't think there are a lot of women who are willing to make those sacrifices.
CDN Now: What's the biggest industry trend happening right now with Web 2.0 and where do businesses fit in with this phenomenon?
S.L.: When you're talking about existing businesses, in the late 90s, the way the Web was revolutionary, was that it was about being able to have a public face for your company where you were accessible to the public. Having everything in one place was really revolutionary in how companies were able to communicate with their customers. Now, Web 2.0 has turned that on its head, and it's about customers communicating back to the companies now. What's amazing about the Web is how prevalent it is now. (Businesses) should try to use the Web and social networks to their advantage. The way I always advise companies to go after this, is to think about the technology and the strategy. What companies should do is really think about who their audience is and decide what message it is they want to get across. Once they decide this, they have to be as specific as possible. Not "we're a leading provider of this...," and so on. Do you want the audience to know "This is a great place to start your career? Or, this is where you can find the best deal in this particular city?" Come up with answers to these sorts of questions. Then, think about the person who's going to be delivering this message through the network. If you have the wrong person trying to reach your audience, you're going to fail. There needs to be someone behind that tool.
CDN Now: What are some of the biggest challenges start-up companies usually face and how can they work to overcome these issues?
S.L.: It's tough for anyone starting out now, because it's a period where there's lots of business-model innovation that's still being worked out and it isn't so much about product innovation right now. There are so many companies that have been built over the past couple of years and they all look alike right now. I think there's a ton of money in the economy still that can back up a good idea. Entrepreneurs in the Web space should put off making money as long as they can. Once that entrepreneur has that killer product, than they need money and to go out and scale. The other piece of advice I'd give to entrepreneurs is to think simple. I advise people to walk that fine line between being obvious and universal; where I'm not saying something obvious, but people who understand it, get it.
This story, "'Valley Girl' Touts a Web 2.0 World" was originally published by ITBusiness.ca.