| The statistics coming off the crash in dot com | | | | fault for giving the kid avery big pocket full of |
| stocks are adding up to ableak picture. This week I | | | | change without making sure the business plan |
| read an editorial in Electronic News by managingeditor | | | | saidsomething about profits before the kid retires? |
| Peter Brown that presented some disturbing | | | | The VC is easily the mostmisunderstood character on |
| numbers. According to | | | | the dot com scene. One of the interestingstatistics |
| Reuters Media, a total of 100,000 jobs have vanished | | | | coming from the Internet crash is that VCs are |
| from the Interneteconomy since December , 1999. A | | | | hitting theirbatting averages. Most venture companies |
| full 50,000 of those jobs have disappearedsince | | | | don't expect to bat much above 300. |
| February. In three bloody months, the dot com | | | | That means seven out of ten of their companies are |
| damage has doubled. In | | | | expected to fail. The wordventure means big, big |
| April, 55 dot com companies shut their doors, which is | | | | risk. Most of the experienced VCs met or beat |
| up from the Marchtotal of 44. Since January of last | | | | theiraverage during the dot com craze. |
| year, 435 Internet-based companies havefolded. | | | | Is it my fault? |
| More than half of these closures occurred this year | | | | How about the media? Oh, we hyped it all right. But |
| alone. | | | | we hype everything. Rightnow we're hyping the |
| The carnage has spread far beyond Silicon Valley. | | | | crash. The dramatic rise of the Internet bubble has |
| Seems much of our economyis now shaking because | | | | beenthe business story of my professional career. Of |
| of the dot com fall out. Even the major | | | | course we're going to coverit with raving enthusiasm. |
| televisionnetworks, ABC, NBC and CBS blame their | | | | But remember, deep skepticism ran through |
| current advertising revenue woes onthe dot com | | | | thebusiness press simultaneously with the gushing |
| failures. Certainly Cisco, Sun Microsystems and Intel | | | | over the New Economy. Alltold, I think the business |
| aresuffering from fall-off in demand for their | | | | media did a balanced job reporting the dot comraise |
| Internet-boom products. Manyobservers blame the | | | | and collapse. |
| downturn itself on the popping dot com bubble. I | | | | Does all this mean I don't blame anybody? Yes, |
| guessthe failure of a few hundred Internet start-ups | | | | pretty much. The dot comphenomenon has included |
| can drag down the entireglobal economy. So whose | | | | both successes and failures every step of the way. |
| fault is it? | | | | Even now, with those dire statistics of Internet |
| Is it the dot com executives fault? | | | | crashes, I can make a casefor the continued success |
| Should we blame the 26-year-old college dropout | | | | of e-business transformation. |
| who was funded to the tune of | | | | What about all this good news? |
| $15 or $20 million to develop a cool new way for | | | | Did you know that virtually every large company is |
| teens to communicate witheach other over the Net? | | | | still hip-deep in theprocess of re-making itself into a |
| We say, "Hey, how do you make any money off | | | | Internet-centric entity? More than 50percent of |
| bringinga bunch a kids to chat rooms and games?" I | | | | corporate capital spending is going to information |
| say, how is a 26-year-old collegedropout supposed to | | | | technology, upfrom 15 percent in 1990. Did you know |
| question the business model of a company that has | | | | the growth in consumer spending overthe Internet |
| beenfunded to draw audience rather than to create | | | | will exceed 45 percent this year? Spending at travel |
| profits? Remember the eyeballrush? The dot com | | | | sites alonewill grow more than 50 percent. Did you |
| start-up kids were not given the mandate to | | | | know the total spending over the |
| buildprofitable revenue streams. They were funded | | | | Internet will exceed half a trillion dollars this year, far |
| to build audience. They did. | | | | beyond thecraziest dream of just three years ago? |
| Is it the venture capitalist's fault? | | | | In the Internet world, these are thebest of times |
| So does that mean it was the venture capitalists' | | | | and these are the worst of times. |