Dot-bomb redux? The truth about 1999 vs. now

Parallels between the excesses of 1999 and 2014 are jangling nerves, leading some to wonder whether we're building lasting tech value or lurching toward another bust

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Technology development
Here's where I think the biggest difference lies between 1999 and now. At the risk of repeating myself, I don't think I've ever witnessed an explosion in technology like the one we're currently experiencing. From NoSQL databases to 3D printers to the Internet of things to JavaScript innovation to SDN to big data everything -- whew -- there's an avalanche of emerging tech to sort through.

I don't want to insult anyone retroactively, but it seems I keep meeting young, brilliant technologists with much greater frequency than I did even a few years ago. Maybe management kept them locked up before, I don't know. There just seem to be a lot more of them now, which makes sense, because the young ones grew up digital.

The market for talent
Here's where 1999 and today look frighteningly alike. I remember an exec pleading with me in 2000: "Do you know any Java programmers? We pay a bounty!"

Today demand for talent may be even higher. But employment requirements have become much more specific, with elaborate tests and screening processes. There was a "warm bodies" aspect to the dot-com boom, with investors crazily touting growth in headcount as evidence of promise. In 2014, ventures are competing over elite talent, often fighting bitterly over rock star developers with special skill sets.

Everyone is hoping that a new crop of code academies will help realign supply with demand -- although, clearly, not everyone should learn how to code. Meanwhile, around here, rents and home prices keep climbing as nouveau riche technologists run an increasingly hostile gauntlet in their Google buses. Will that ever change? We'll see.

Marketing budgets
Here's a big difference: In 1999, startups spent profligately on promotion. San Francisco Muni bus advertisements were sold out six months in advance and that awful sock puppet dog was on TV. In 2001, the grocery delivery startup Webvan stuck a Webvan sticker on each cupholder attached to each seat in the newly built stadium for the San Francisco Giants baseball team -- 42,000 of 'em. The stickers outlasted the company by at least a year.

The bust killed such over-the-top shenanigans instantly. Today, consumer startups tend to rely on app store promos or social media. And mass marketing has never made much sense for enterprise.

Exit strategies
To isolate the important truth in all this, let's return to the cavernous SOMA venue in which the startup release party I witnessed a few nights ago was held. Yes, the cockiness was there. Conspicuously absent, though, was the bombast about how the company's new way of doing business would change the world. The audience was almost all programmers, and the punch lines from the stage were almost all technical -- greeted with oohs and ahs by the neckbeards.

In 2014, real, useful technology is being built. Most of the startups will be gobbled up by the incumbent beasts of the industry and will never see an IPO. Yes, I believe there will be a day of reckoning when revenue numbers from SaaS and open source startups fall dismally short of VC expectations; Google, IBM, Oracle, and VMware can't buy every little venture with nice bit of intellectual property. But for now, at least, this boom clearly contains a vastly bigger technology payload than the boom 15 years ago that went so dramatically bust.

This article, "Dot-bomb redux? The truth about 1999 vs. now," originally appeared at Read more of Eric Knorr's Modernizing IT blog. And for the latest business technology news, follow InfoWorld on Twitter.

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