Silicon Valley is back . . . I have the dotcom

By Tom Foremski - February 22, 2006

By Tom Foremski for SiliconValleyWatcher
[There has been a lot written recently that Silicon Valley is back--here is part of a post I wrote in mid-November 2004.]

Slurpy-Exec.jpgI've had lots of chats about Silicon Valley lately and I’m of the Bachman Turner opinion that you ain’t seen nothing yet.

When I arrived here November 8, 1984, Silicon Valley was going through the down cycle following the PC boom. A hundred PC companies wanted just 10 per cent of the market, wanting to strike it rich, as rich as the Apple IPO—the Google celebrity IPO of its day.

Hundreds of Apple staff became millionaires, including secretaries and the guy that ran the parking lot. The media coverage was massive. VCs rushed in like a herd and funded a huge number of PC companies and when the bubble popped, the down cycle was harsh. Stories about Silicon Valley’s death were constant and grinding for several years. I’ve seen several business cycles and the same thing happens in each down cycle, endless speculation about Silicon Valley’s future. What future does Silicon Valley have?

I think I can answer that question very easily—and I’ll accept any size bet on this call: when Silicon Valley comes back, it will be bigger than before. (Actually, it’s been back for a while--hence this venture.)

[I was chatting with Ron Piovesan, from Cisco on this topic recently, and he says has also seen signs of improvement. He laughed when I said I own the dotcom name: SiliconValleyIsBack.com. I said I’m serious, I do own it!]

Silicon Valley is very much like a fairground slurpy -- big chunks of ice with most of the juice at the bottom.

And there is a lot of juice accumulating, the laptops are discretely reappearing in bars and restraunts, and there are many signs of bubbly behavior.

Silicon Valley is going to have a larger impact than before. I’ve been through several business cycles and each time Silicon Valley has come back stronger.

The most recent comeback, the dotcom boom, was the first time Silicon Valley was able to have an immediate worldwide economic impact. It was the first time it became hooked up to world stock markets through the tech IPO flood.

This provided a mechanism for trading in Silicon Valley’s ideas. Remember, many dotcom companies were stories--stories about business concepts--revenue models were not necessary.

I think this time around, Silicon Valley's ideas will have a larger impact and things generally will be done differently. The way Silicon Valley innovates will be different, media will be different, PR will be different.

And this time around, dotcoms will eat the lunch of the established companies. Then they will eat the companies (or at least suck out the soft fatty stuff such as the brand image and leave behind the crunchy legacy infrastructure stuff.)

There will be many companies that won’t be able to reduce their cost base fast enough to meet the efficiencies of new Silicon Valley "new rules" ventures.

I’ve got some views on where I see things heading, and I will write about those trends and I’ll probably check them out myself. That’s because the next phase of the internet is going to be all about . . .

- - -

I didn't finish the sentence in November 2004. (I usually sit on things for six months or more, so that I can try and figure out if I can exploit any insights I have, I'm learning to be a media entrepeneur so I might get better at it :-) But Let me finish the sentence now: it is going to be about media technologies, it is all about publishing.

And now every company is a technology-enabled media company to some degree...and that means every company will be affected by the innovation coming out of Silicon Valley.

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February 22, 2006 | Permalink | Comment | Category: Startups | Subscribe to SVW

Comments (6)

Tim Cohn:

Search engines by proxy have digitally divided and classified every company into either a technology-enabled or technology-disabled
media company depending on whether they can be found or not.

Posted: February 22, 2006 10:44 AM

Tom Foremski - Silicon Valley Watcher [TypeKey Profile Page]:

Tim, that's true to an extent...however, isn't it up to the search engines to find the companies, no matter how well they practice SEO?

Posted: February 22, 2006 2:49 PM

Tim Cohn:

Great question.

Having a business phone listing in your local directory does produce a local search result provided the searcher already knows under what name and locale to search.

What happens to the wireless business or the one without a phone listing? What happens in situations where the searcher doesn't remember or know the specific business name before he begins his search?

A search query is ran for Ms. Realtor in Silicon Valley and instead of finding the realtor and firm he thought he was looking for, Mr. Home Buyer is offered up Ms. Realtor's twenty technology-enabled competitors.

Having a company web site doesn't guarantee it's inclusion in the search engines. Being included in a search index doesn't guarantee the company can be found under its business name let alone under searches for its products or services. If having a web site included in search engine results was all that was needed to become a technology-enabled company, the paid search industry wouldn't exist.

Yes, search engines can find companies via their city or phone number but what percentage of your web based searches begin with the business name, locale and or phone number known prior to commencing the search?

Posted: February 22, 2006 8:25 PM

Robbie Allen:

There is a lot of momentum right now in the media/publishing space. I'm tackling technical publishing (see my blog: Publishing Hacks). Tim is right about search engines. As I wrote about in access to eyeballs, having good content is not nearly enough unfortunately. There is so much content out there that you have to get creative with distribution.

Posted: February 23, 2006 12:19 PM

Tony Colan:

Our network of blogs at http://blogster.com is now being viewed as a feeder system for large publishing houses. They are recognizing the need to recognize and cultivate talent through a large network and feed it into their on-line publishing model. Its fascinating stuff.

Posted: February 27, 2006 1:04 PM

Jason Haddock:

I was reading your site today and your discussion about search engines. I find it interesting that everybody is still interested in traffic from the SE's, but very few people look at getting a higher conversion rate from their website.

As you can tell from our business this is what we do. However, most people talk about traffic. Then they talk about usability. From our experience, optimizing a site for search engine rankings and fixing a site for usability tends to ruin a sites ability to convert visitors into business.

Have you done any research or talked with any companies that have focused on increasing conversion rates on their website? Marketing Sherpa states that the average conversion rate is about 4-6% for sites who do lead generation. From our experience, we've seen sites get up to 15-25% sometimes higher.

Especially important for technology companies who use their sites to generate leads. What do you think about this topic, have you explored any thing like this before?

Regards,

Jason Haddock
Conversion Results
www.conversionresults.com
Tel:801-756-3617

Posted: May 19, 2006 1:17 PM

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