It can only be a good thing that many of the employees working at the latest spate of high-tech startups aren't old enough to remember the last time grossly overvalued companies were prepping for an IPO based on nothing more than widespread obsession with the latest fad — the Internet.
This time, the obsession is social media, and a company that built its business model on 140 characters of text is valued at $7 billion. (No offense, tweeters, but are you really that interesting?)
The thing that set off this rant is an article in The Wall Street Journal. It seems that the latest talent in Silicon Valley requires tree houses, cashmere hoodies, and fake mustaches to make getting up for work every day worthwhile. According to the Journal, working at Internet startup Airbnb “is like a really fun school where you get paid,” or “maybe it's more like camp.”
Are you kidding me?
Lest you think my reaction is born of envy, let me say this for the record: I was envious back in 1999 when tech companies had concierges and people who would pick your dry cleaning up at the office. This time, it's not envy: It's outrage. The national unemployment level is approaching 10 percent, and the best and brightest we have want to work at a camp?
Here are a few more highlights from the article:
- Some Web startups are partying like it's 1999. Airbnb's housewarming later this month is to include a visit by rapper and occasional tech investor M.C. Hammer. The party room at reviews site Yelp Inc. has three beer kegs with built-in iPads to offer information about what's on tap. Last month, startups Peanut Labs Inc. and AdParlor Inc. sponsored the sold-out “Pirates of Silicon Valley Cruise,” a $600-per-person seafaring party.
Companies say the fierce competition for talent among startups has necessitated extraordinary perks meant to attract and retain employees.
At Facebook, the social network sponsors an annual “game day,” in which the whole company competes in schoolyard classics such as kickball and capture the flag.
Online storage site Dropbox Inc. has a rock room where employees play guitars and drums, and another one dedicated to playing the arcade game Dance Dance Revolution.
I, like many journalists in the tech trades, benefited from the last wave of sure-fire startups. To woo writers, companies got really clever about press releases: Some came in the form of a singing belly dancer (I kid you not); some came accompanied by a product or gadget (I once got a notebook with covers made of recycled printed circuit boards); some came on a reusable disk or flash drive. We were offered jaunts to Japan and China free of charge, and the gift baskets at Christmas were outstanding. Sure, we wanted people that waited on us hand and foot (they are commonly called “interns”), but most of us were pretty happy with telecommuting and enough ad pages to support a “perfect”-bound magazine (as opposed to a stapled-together pamphlet).
I know a bunch of people who left the trades for Internet startup companies. Only one of those companies still exists today (in a completely different business model), and many of those people are self employed or, like me, trying to figure out Internet publishing. I also know people in all walks of life — construction, finance, manufacturing — who are unemployed or fighting to keep their jobs.
Maybe these startups aren't paying like they used to and require perks to retain employees. If that's the case, I'll admit I'm wrong. And there have been vastly successful Internet companies, but they are still in the minority. I am really, really worried that the industry is approaching another bubble where novelty companies that don't make anything except lines of code are worth billions of dollars. There already is a Facebook, a Google, and a Twitter, and the social media market has already faced a shakeout (remember MySpace, anyone?). I think high-tech is approaching another round of excessive investment in vapor-ware and the fallout is going to be ugly.