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Businesses The Almighty Buck

The Walking Dead of Silicon Valley 247

Posted by michael from the shotgun-usually-effective-on-zombies dept.
Frisky070802 writes "CNN has a column about a liquidator who refers to thousands of Silicon Valley startups as the walking dead. It states: 'Pichinson, a self-described "doctor of reality" who helps liquidate companies, says he wouldn't have moved from Los Angeles to Palo Alto a few months ago had he not smelled more high-tech trouble looming.... "There's still another 6,500 to 7,500 companies out there who are among the walking dead."'"
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The Walking Dead of Silicon Valley More

The Walking Dead of Silicon Valley

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  • Eww (Score:3, Funny)

    by locutus_borg ( 36786 ) <olocutus@hotmail.cCOUGARom minus cat> on Thursday January 08, 2004 @09:31AM (#7913826)
    I hate Zombies....

  • Managers taking hostages? (Score:5, Interesting)

    by fjordboy ( 169716 ) on Thursday January 08, 2004 @09:33AM (#7913840) Homepage
    Sometimes, Pichinson and Sherwood's 60 employees are able to salvage troubled startups by cutting costs and training the executives to rethink their ways. Sherwood even brings in an FBI consultant specializing in hostage negotiation techniques to help management.


    This is possibly an idle curiosity, but how is having hostage negotiating skills going to help out management? Or are these tech firms even worse off than we thought?

    • Re:Managers taking hostages? (Score:5, Insightful)

      by Waab ( 620192 ) * on Thursday January 08, 2004 @09:38AM (#7913884) Homepage

      how is having hostage negotiating skills going to help out management?

      I imagine the managers of failing tech firms may have the same desperation and confusion that a hostage taker might. Letting go of the failing business model would be analogous to giving up the hostages.

    • Re:Managers taking hostages? (Score:5, Interesting)

      by swb ( 14022 ) on Thursday January 08, 2004 @09:46AM (#7913941)
      Some companies fail because they have a stupid business model (or none at all), and no amount of business savvy can save them. But some fail because their management is in collective denial about their situation and management strategy.

      A hostage negotiator is largely a psychologist, and psychologists are fairly good with people in denial. Get management to snap out of it, realize that their strategy is in need of correction, and in some cases you can save a company that has at least a good idea.

      • Re:Managers taking hostages? (Score:5, Insightful)

        by ergo98 ( 9391 ) on Thursday January 08, 2004 @10:00AM (#7914030) Homepage Journal
        An alternate theory is that it's a gimmick, just like the gimmick of many of the .COMs, that he pulls out every media encounter he gets to validate what he does. It really took the cake when he compared his organization to a hospice -- that is a hospice that takes $75,000 or 7.5% of the sale value, whichever is more...
    • It wouldn't surprise me... I mean a lot of people probably have their compensation tied up with the company. Many people in dot-com companies worked for almost nothing. If the company restructures and the CEOs get off with very little damage (as they always do), some employees aren't going to take it lightly...

      Of course, I am not endorsing any of this. I'm just speculating on the situation..

      Sivaram Velauthapillai

      • But nobody is holding a gun to said employees head. They are free to leave anytime.

        • Yeah but if some guy worked hard and ended up with nothing, that guy is going to get angry. That's the cause of these worker shootings you hear about. Some guy works hard for a long time and then they lay him off. In the dot-com companies, you didn't work long but you certainly worked a lot of hours...

          Of course, people are acting irrationally. If they were rational, there wouldn't be any of these problems...

          Sivaram Velauthapillai
    • This is possibly an idle curiosity, but how is having hostage negotiating skills going to help out management?
      I can think of two possibilities:
      1. The managers are worried about disgruntled, laid-off ex-employees going postal, or...
      2. The investors are treating the situation as failed startups who are holding their money hostage.
      Which is more likely? You decide.

  • Breaking news: Man says his business will be good (Score:5, Funny)

    by Violet Null ( 452694 ) on Thursday January 08, 2004 @09:35AM (#7913861)
    In breaking news, a professional liquidator who gets paid to oversee companies that are in bankruptcy said that he expects there to be a lot of companies in bankruptcy next year, helping his business.

    Facts pointing out this may not be the case were pushed aside.

    Film at eleven.

  • Move north... (Score:5, Funny)

    by DocUi ( 697881 ) on Thursday January 08, 2004 @09:36AM (#7913870)
    Up a little... you know... Redmond? Had to be said.
    • To liquidate a company with no debt and to teh effect of $50 Billion in cash.

      Remember, liquidators do just that: liquidate assets. If your company is failing to make money, has a lot of debt, and is going under, you'll need to liquidate (sell them for cash) to try and pay off your creditors.

      They don't go after companies that make money but espically not ones that make money and have money. Even if MS starts loosing money, they have no outstanding debt so they don't have to worry. They'd have to burn throu

  • How does this compare..... (Score:5, Interesting)

    by wpiman ( 739077 ) on Thursday January 08, 2004 @09:37AM (#7913874)
    With other industries starting up? What percentage of restaurants fail? Bookstores? Coffee shops? Are these number way out of whack with business as a whole?

    • Re:How does this compare..... (Score:4, Interesting)

      by BillFarber ( 641417 ) on Thursday January 08, 2004 @09:44AM (#7913934)
      With other industries starting up? What percentage of restaurants fail? Bookstores? Coffee shops? Are these number way out of whack with business as a whole?

      Something like 70% of all new businesses fail within their first five years.

      • Re:How does this compare..... (Score:2, Funny)

        by Anonymous Coward
        Something like 70% of all new businesses fail within their first five years.

        But 84.7% of people don't know what they're talking about, and make up statistics.
      • Actually, the numbers I kept hearing, well before the dot-com lunacy, was that 90% of new businesses go bankrupt within two years. A surprising number of friends and acquaintances started up in the 80's and 90's and repeated this number as well (BTW they're all in business except one, who cashed in and got out.)

        However, that said, it would interesting to see some reliable figures. Funny how it's run full circle - 'dot-com' started out as a pejorative, was the latest rage, and is now a pejorative again.

      • The fact that this post got modded to +5 has shown that almost all , if not, all logical reasoning and analytical ability has left this place.

    • Re:How does this compare..... (Score:5, Insightful)

      by AKnightCowboy ( 608632 ) on Thursday January 08, 2004 @10:09AM (#7914073)
      What percentage of restaurants fail? Bookstores? Coffee shops? Are these number way out of whack with business as a whole?

      Let's not forget restaurants, bookstores and coffee shops actually sell things. Many of the dot-bombs didn't have any products and seemed to be just money-laundering houses for venture capitalists.

    • This article [inc.com]
      states that 4 out of 5 new businesses fail is a myth. Take it for what its worth, another opinion.

    • Re:How does this compare..... (Score:5, Insightful)

      by madro ( 221107 ) * on Thursday January 08, 2004 @11:03AM (#7914540)
      Behold the power of google ... This article [bizjournals.com] describes a specific study about restaurants in central Ohio, but has a quick blurb about businesses overall:

      "(H.G. Parsa, the report's author) reviewed other published studies that also suggest failure rates of restaurants to be closer to 60 percent or less after three years to five years."

      This is compared to the oft-cited conventional wisdom of a 90% failure rate in restaurants, and 70-80% for other businesses. An early-90s Inc. article [inc.com] says failure rates are inflated because researchers didn't account for changes in ownership -- in other words, just because a business comes under new management doesn't mean that the business has failed:

      "after eight years, 54% of start-ups still survive in some form: 28% have the original owners, and another 26% survive with new owners"

      Now, that Inc. article may be a little dated post-boom, but the basic concept still holds: *you* may have a great product or idea, and a business you launch has perhaps an even-money chance of surviving ... but you probably don't have the skills to make your product/idea stick in the marketplace.

      (I'm wondering what Alan Cox will come up with after he finishes his MBA.)
      • (I'm wondering what Alan Cox will come up with after he finishes his MBA.)

        Longhorn?

        /me ducks
      • Or you're good at coming up with an idea and building out a business - but find the day to day operations once its successful boring and unfullfilling. So you start businesses, work thm up to where theyre self sufficient and then sell them to someone who feels they can make a go of it and doesn't mind the monotony of day to day operations.
        • If only someone in school, or among friends and family, had said these words when I was a kid. Man, the sparks would have started flying! Those little cogs in my brain would have been spinning like crazy.

          All I remember from teachers and relatives was "get a job". Not once was there any indication whatsover that it was possible to have a cool idea and run with it, make your own career. Actually create a job out of thin air.

  • Small companies can still survive (Score:5, Interesting)

    by Gary Whittles ( 735467 ) on Thursday January 08, 2004 @09:38AM (#7913887) Journal
    Recently, I was inspired to look up an old company I use to work for. They employed about 12 people total.

    They had three sales people, three support people, on tester, one secretary, three programmers. One of the programmers doubled as their sysadmin. The support staff had to work on bugs for Q&A in their time between calls. They literally had clients that were some of the biggest lawfirms around.

    They made a product. They sold a product. They made money.

    The guys who started the thing took out personal loans to keep it going for awhile. He passed out profits back to the employees when times were good. Honestly, if there was a place to be promoted to or a position open when I was ready to go on I probably would have never left.

    Small companies can survive in the IT world. They just have to have half a clue in their heads to do it.

    Fill a niche, concetrate and expand along the niche not outside it, keep employee and overhead costs low (their building was nothing grand but I had my own office).

    This is basic business stuff that many companies still have no concept of.

    • Re:Small companies can still survive (Score:4, Informative)

      by larien ( 5608 ) * on Thursday January 08, 2004 @09:41AM (#7913910) Homepage Journal
      And small companies can raise $59m [theregister.co.uk] for the owners, even if they only have 21 employees.
    • Indeed . I find my self agreeing with you very much .
      Many tech firms try and be the next big Microsoft by offering a whole range of products . Find an area at which you are good at , there arent a lot of competitors and focus in on that area .
    • number 1...don't open shop in silicon valley! real estate is way to expensive there. Try someplace in the midwest where they still have the auto infrastructure of schools and empty offices for cheap. And your employees can live nicely off 30K-50K!
      • Depending on the type of firm you are starting, you are not going to be able to find a pool of labor in Idaho that matches Silicon Valley. Maybe VB programmers, but not hardware/optical/deep software type stuff.
        • You'd be surprised. When I moved to Minnesota from the East coast a few years ago, the locals asked me why I would come here, imagining it must be so much more glamourous in the NYC area. But it really is much nicer here. More and more people are moving to the Midwest because we're tired of the insane cost of housing (I came from S/W CT with a background in hardware & software design), the dog-eat-dog pace of life and just the overall busy-ness of it all. You also find employers offering generous reloca
    • So true and those are the ones that are. Here in San Francisco I see many folks purposely leaving big company services for small companies as all the folks they worked with got layed off and started their own companies. One example is my friend whose company shut down his division and stoped certain development services he was part of. He then contacted the ex clients and as he was ex employee he offered them same thing cheaper. Of course they took it ;) I see this happening a lot, and maybe I am ideal

    • Re:Small companies can still survive (Score:5, Interesting)

      by fuzzybunny ( 112938 ) on Thursday January 08, 2004 @10:56AM (#7914485) Homepage Journal

      A couple of years ago, I was invited to join some colleagues in a payment technologies startup in Munich.

      This was a highly impressive bunch of people. The senior guys came from one of the major producers of financial transaction enabler platforms, which would be a core part of our offer, with a huge customer base. The management of that company was friendly with the guys starting ours, who had an excellent understanding of the technology and the field, and great customer contacts.

      We had backing from one of Germany's major prestigious conulting firms, and a very senior, respected politician, who would help us to many useful contacts in industry. No fixed costs, and a free office in one of the country's most prestigious locations didn't hurt.

      We had awesome ideas which could be translated into real-life technology pretty quickly (essentially taking existing components and putting them to fairly revolutionary use.) A lot of companies were really looking to do business with us. But we failed. Why?

      The "guys in charge" were an incredibly venal, slow bunch. They took about 6 months (!!!!) to come up with a semi-legible business plan, and refused any sort of capital, even angel funding, beyond what they themselves had put in initially (complete refusal to hand over any control, anyone?) They did not understand the concept of "do something, do anything to get started", including low-level use of free technology, such as improvised websites and initial customers, preferring to plan for pie-in-the-sky everything-must-be-perfect-before-we-move. Suck. A lot of startups die because they have crappy product, or work inefficiently, or a bad business model, or economic realities. Us? Our own goddamm fault, 100%, and I could kick some people for it (no, not myself, I was one of several people constantly screaming to DO SOMETHING, so I feel pretty vindicated, if disappointed.)

      It especially irks me nowadays to see a lot of the technology and processes that we came up with in our spare time (!) in use commercially, 4 years after we died miserably. My girlfriend started work in one of the big-howevermany consulting firms, and showed me a presentation they'd done that year for some eastern european telecoms and financial institutions, which went over like gangbusters. Not plagiarized from us, since someone was bound to do this stuff in the long run, but eye-popping nonetheless. If we'd only...

      The thing that bugs me so tremendously is the sheer wasted opportunity here. I have no mercy with all the crappy dot-coms that blowthedotoutyourass.com (look it up) was so bitter about--there was no reason for most of them to exist. But I really really hate it when a good thing dies for no really justifiable reason.

      Blargh.

      So your comment about "half a clue in their heads" is so spot-on I could spit.

      • I have to play devil's advocate here. I've been part of lots of startups where I too thought that I had all the answers. And maybe I/you did. But this attitude can drive you nuts. So for your own sanity consider this...

        1) Ok, what they did didn't work. That doesn't mean your 'do anything to get started' plan would have necessarily worked either.

        2) The squeaky wheel does get fixed, that is, unless it just keeps squeaking. Then it gets thrown away for a nice, quiet one from India. Seriously, lingerin

    • Yes, but... (Score:2, Informative)

      by taradfong ( 311185 ) *
      Sure, a few smart guys in a garage will always outmanuevre a mound of VCs and suits. Thing is, the VCs don't care about small potatoes, even very well run and profitable small potatoes. They want big potatoes. They have A LOT of money to manage and they need a MAJOR payoff to make it worth their while. This kind of company doesn't 'scale' in their minds.

      And this is really why the .com thing came and went. The VCs (and Wall Street), who have the money, created an evironment which led to lots of 'fluff'

    • Re:Small companies can still survive (Score:5, Insightful)

      by hey! ( 33014 ) on Thursday January 08, 2004 @01:40PM (#7916380) Homepage Journal
      Why do companies fail?

      Because they fail to make profits?

      No.

      Because the run out cash. People demand to be paid right away, and don't care about your booked orders or even your receivables.

      What's the biggest cash outlay for a business? Almost alway payroll. And the biggest hits on the payroll are usually the founders, who have a massive ego investment in the survival of the business.

      This gives a very small business considerable resiliency. Take a ten person company with two founders who account for a third of the payroll. If they get into trouble, the two founders can take themselves off the payroll for a month or two and work hard to make the cash come in. Try getting 33% of the payroll of a large company to come into work for free AND work extra hours.

  • This is news? (Score:3, Interesting)

    by Anonymous Coward on Thursday January 08, 2004 @09:39AM (#7913889)
    This is more like an advert for his company... I wonder what this will have done to his stock price.

  • Comment removed (Score:3, Insightful)

    by account_deleted ( 4530225 ) on Thursday January 08, 2004 @09:39AM (#7913894)
    Comment removed based on user account deletion

  • Capitalism. (Score:4, Insightful)

    by Raven42rac ( 448205 ) * on Thursday January 08, 2004 @09:41AM (#7913903)
    This could be part of the "jobless economic recovery" that we have been hearing about. Seriously though, the $4,000 chairs and plasma monitors have to get sold by someone, right?
  • From the article: 'Sherwood Partners "comes in and talks tough," said Doug Koo, who ran a failing San Francisco startup, Cat Technology. "They teach you that some of the things are a necessary evil."'

    In other words: "Your employees ain't doing shit, but do let some of them read Slashdot all day, it's a necessary evil" ;-)

  • The Walking Dead of ... India! (Score:5, Interesting)

    by Channard ( 693317 ) on Thursday January 08, 2004 @09:45AM (#7913938) Journal
    With so many IT call centre roles being outsourced to India, why not utilize India's Walking Dead. Specifically, there's an army - pun intended - of people who are considered legally dead in India due to corrupt officials declaring them dead so their relatives could get their hands on their land. I'm not making this up.. see this story [canoe.ca]

    • A lot of colleagues of mine worked such long hours that their families just declared them dead anyway. No difference, except that they cashed in on the insurance (needed to make a living if the options weren't looking to pan out...)

      :-)
    • And with all those jobs gone to India we can raise a new army from the subequently swollen ranks of jobless americans, equip them with high tech weapons bought with all the money we save with the outsourcing of techjobs to India, and send the new Legions to clean up N-Korea. According to the CIA the jobless Geeks will come in handy for defusing the stack of A-Bombs Kim Il Song is sitting on. Unless of course they outsource that to India as well.

  • I would take his comments lightly... (Score:5, Interesting)

    by mtrupe ( 156137 ) on Thursday January 08, 2004 @09:47AM (#7913952) Homepage Journal
    This guy has an interest in tech companies going out of business. What is the difference between what he says and what the dot-commers were saying 3 years ago when they were constantly bragging about huge internet growth predictions?

  • Branch office possibilities (Score:5, Funny)

    by number6x ( 626555 ) on Thursday January 08, 2004 @09:49AM (#7913961)
    Maybe He'll open a branch office in Lindon Utah. That would be nice.

  • Chapter 11 protection (Score:5, Interesting)

    by Zog The Undeniable ( 632031 ) on Thursday January 08, 2004 @10:01AM (#7914036)
    I don't know a huge amount about US company law, but it seems to me that a lot of firms over there that file for Chapter 11 protection eventually emerge from it and become successful again, so the system works if the fundamentals of the business are good. Here in Britain, once you're seen to be insolvent (however temporarily), 99% of the time you're completely fscked.

    The guy in the article has at least saved a decent proportion of his client firms; it's pretty rare here unless you get a management buyout (e.g. Rover Cars - not exactly a roaring success). Most of the time the firm just shuts down and gets asset stripped. Oh well, we've never had anything *quite* as big as Enron.

    • Re:Chapter 11 vs. Ch 7 (Score:5, Informative)

      by G4from128k ( 686170 ) on Thursday January 08, 2004 @10:18AM (#7914136)
      it seems to me that a lot of firms over there that file for Chapter 11 protection eventually emerge from it and become successful again

      Yes, as explained here [mci.com], Chapter 11 bankruptcies allow the company to reorganize and keep going. It is up a judge to decide if this is in the best interests of the creditors. If the company can make a good case that continuing the business would help them pay off more of the creditors, then that's the route they will go. Companies in chapter 11 can even get funding with debtor-in-possession deals that sign the assets of the company over to whoever is providing the money. Chapter 7 bankrupties (more like true bankruptcies) liquidate the assets of the company and divide the procedes among the creditors.

      With both types of bankrupties the creditors get pennies on the dollar and the shareholders get nothing.

    • Re:Chapter 11 protection (Score:5, Interesting)

      by jj_johny ( 626460 ) on Thursday January 08, 2004 @10:20AM (#7914156)
      But the guy's point is that there are tons of companies that even if you wiped out the debts, don't have enough cash or positive cash flow to make it in the long run. These companies are not going to get credit if they go through bankrupcy. Lots of these companies don't have significant debt anyway since they were VC funded - VC exchange funding for equity not debt.

      When I worked in Silicon Valley, there were tons of people who thought that they were smarter than they were, that theit product was better than it was and that the market was bigger than it is.

    • I have read that most companies that file for chapter 11 do not successfully emerge.

  • There are signs, from the other side (Score:5, Informative)

    by onyxruby ( 118189 ) <onyxruby&comcast,net> on Thursday January 08, 2004 @10:06AM (#7914059)
    I used to work for a rather large and well known national (US) retailer in their store operations division. One of my responsibilities was to deal with stores that were slated to close for any number of reasons, perhaps up to 30 a year. If a facility is due to close or upper management is thinking about this (ignore what they tell you - trust me), the one thing they will inevitably do is try to save money on something that won't be around. Executives simply can't resist the allure of saving these costs when they can "get away with it".

    The first place to save said money for a closing or may be closing facility is operational maintenence. These are the kinds of things that can function for a while before their lack of maintenence can be noticed. On a routine basis, it makes economic sense to do certain preventative and aesthetic work on a schedule. Maintenence and building engineers know this, and they know what tends to be put off in the event a building will be closing. While they may not get the official word first, they will almost always know that a facility is closing before someone like the executive secretary.

    Here is what to look for, even if you know your company is in healthy financial shape and that your facility is not about to close. Pay attention to these because the good times are not always so good.

    Parking lots striping, is the parking lot badly in need of painting those lines that tell everyone where to park? Parking lot potholes, are the only potholes that are fixed the massive ones?

    Paint on the walls, most businesses will paint their walls every x number of years, it saves money on electricity (brighter walls allows less light ergo less electric), and this is one of those subconcsious things that can reduce or enhance worker productivity.

    Electrician, does your facility have a dedicated electrian, and if it does, has he been deemed unneccasary? This is a big one, electricians aren't cheap, but their vital to maintaining a smooth facility.

    Light bulbs, most businesses don't wait for those overhead lights to burn out to change them. It costs too much in terms of time when you have thousands of them. It's cheaper to change them all at once over the holidays or the like before they burn out. This is done on a schedule, learn what this schedule is, for this is also a big one that is easily overlooked.

    HVAC, heating ventilation air conditioning. Preventative maintenence like coil cleaning can be put off for a while if you know the facility will be closing, but would never be put off otherwise. Coils are typicaly cleaned at least once a year in the spring, and you can seem them from the outside. HVAC equipment is extremely expensive to service and even more expensive to fix. This is a big one, pay attention to if units are working properly (not if your hot or cold).

    Carpet, this is less obvious since it can last longer, and sometimes a really cheap company is perfectly content to let 15 year old carpet remain in place regardless. This can be a red herring, but it bears watching.

    It is not uncommon for maintenence and building engineering people to feel that the people in their building are stuck up and pretentious, and as a result they will probably feel no need to warn the occupants of the coming closure. While the facilities people probably want nothing to do with you, your security and janitorial staff aren't so biased. They work with facility maintenence on a daily basis and they can often also get wind of what is coming up.

    • Re:There are signs, from the other side (Score:4, Informative)

      by el_gordo101 ( 643167 ) on Thursday January 08, 2004 @10:29AM (#7914240)
      This poster makes some excellent observations. I went through a similar situation at supermarket chain I onced worked for. Other warning signs to look out for:

      • Drastic reductions in inventory/product orders
      • Price reductions (to clear inventory)
      • Cancellation/suspension of supply orders (cleaning products, packaging material, etc.)
      • Hiring freezes
      • Lowered standards in routine facility maintenence (cleaning, sanitation, etc.)
    • Well, on the other hand sometime's it can be reasonable to postpone maintenance. Imagine a military in which 1/6 of all units are typically down for minor repairs. In the middle of a big offensive, one can postpone minor repairs in the short term in return for a better long-term strategic position. Ditto with companies: if skimping on building maintenance for a year or two can keep the company afloat long enough to start becoming a success, why not do it? Sure, there's a cost associated, but if it makes

      • if skimping on building maintenance for a year or two can keep the company afloat long enough to start becoming a success, why not do it? Sure, there's a cost associated, but if it makes sense, it should be done.

        I think that's the point he's trying to make.

        If your company is saying "we're doing fine", but skimping on long-term maintenence, it's a good warning sign that something is NOT fine. It doesn't mean the company is doomed.

        Another one I've noticed -- the water cooler. When the company stops getti

  • Has SCO sent 7,000 letters? (Score:3, Funny)

    by jkrise ( 535370 ) on Thursday January 08, 2004 @10:08AM (#7914066) Journal
    From the article:" "There's still another 6,500 to 7,500 companies out there who are among the walking dead."....

    Last I heard SCO had sent only about a 1,000 letters or so; wiat a minute, does it mean SCO has 7,000 sister concerns or alibis??

    -

  • Ghost town! (Score:5, Informative)

    by Anonymous Coward on Thursday January 08, 2004 @10:22AM (#7914176)
    Funny you should mention it, but it's pretty spooky around here now. Driving around, I see all around me empty buildings and "For Lease" signs everywhere. Go by the old 3Com/Palm building and the parking lot is just empty, (well, almost empty). Run over to AMD (Spansion, it's called now)and most of the buildings have been vacated, once again, "For Lease" sign proliferate everywhere. While we're in the neighborhood, we can stop by Fry's and find the store mostly empty, where we used to be able to find all the tech-heads here during lunch hour. D2 (Intel) seems to be ok, meaning it's still hard to find a parking space during the day. Many other companies such as LSI Logic, HMT, HP, Read-Rite, and others have been bought out by another company and liquidated, gone by the wayside and closed up shop, or just relocated and combined operations elsewhere.
    The traffic also shows a dramatic change as well. What used to take me about 2 hours to get home to the Central Valley, I can usually make it in just over an hour, oddly enough, the worst is when I get to Tracy, wjere everyone seems to have moved (It's become a bustling little city, which I woulda never imagined growing up near there back in the 70's.
    Back from the minor digression, It seems sad to me that the whole valley has become fairly lifeless and droll, considering this was where the whole technological revolution began. Thinking optimistically, this may only be a temporary condition until the next great advancement. Or things have just settled down from the great boom of the 90's and are back to normal. I guess we'll see.

    Posted AC because, well, it doesn't matter.
    • I can get from Walnut Creek to Mountain View via 680 & 242 in less than an hour. That's a 55 mile commute!
      Getting home is usually an hour to an hour and a half, depending on how many traffic catastrophes have occured on 680. :)

    • Re:Ghost town! (Score:2, Informative)

      by taradfong ( 311185 ) *
      I took a look at buying some real estate in San Jose, and 75% of the sellers were out of luck engineers who're moving out of the area. Real estate up the peninsula (like Redwood City and San Carlos) seems to be holding on, probably buoyed by interest rates. However the rental market is WAY down, you can rent a house that used to go for $3500 a month for $2300, and you can take your time thinking about it.
    • I don't think you know what droll [reference.com] means. Nice post, otherwise.
    • I guess the archetypical US's Wild West ghost town after the gold dried out had the same feeling.

  • Liquidators are getting worried... (Score:3, Insightful)

    by gorfie ( 700458 ) on Thursday January 08, 2004 @10:35AM (#7914297)
    Sounds like somebody is a little worried that their lucrative business of stalking dying companies won't be quite so lucrative in the near future. So he now proclaims that times will still be bad in an attempt to stifle spending by consumers and companies, thus furthing this slump that we're in.

    This reminds me of the Simpsons episode where Bart joins an Internet company and they die at the end of the episode as Bart is confronted by a repo guy lighting his cigar with dollar bills.
  • The repo business is in a golden age, one that will never end! So when is this guy's IPO coming out?

  • Yet another ad posing as a news story (Score:2, Insightful)

    by Anonymous Coward
    So this guy does "business process reorganization" or whatever it's called this second. That's way more of an empty career than even being involved in a "Walking Dead" business is.

    These guys are only half a step above cult leaders and gurus, and their entire job consists of being professional scapegoats. Show me one who has ever recommended to cut the salaries of executives... you can't. Their ultimate conclusions are always to get rid of bottom-rung personnel. I don't think you need a third party to c

  • This story was painfull to think about. I am 23 years old, I have been laid off 5 times, 3 of those companies don't exsist any longer.

    • Directv BroadBand [slashdot.org]
    • Transport Logic (Bought by Firstworld, who is no longer around I believe)
    • Encompass Telesystems (Didn't even make it to having a web presence)

    5 layoffs in 5 years. I live in fear, but have become bitter and jaded. I expect a layoff to come at any time. Especially since I work at Intel now.

    • My own saga. (Score:3, Interesting)

      by rjh ( 40933 )
      My own employment history's likewise:
      • MCI-WorldCom: in Chapter 11
      • McLeodUSA: in Chapter 11
      • Exemplary Technologies: Chapter 7, CEO did time in Club Fed
      • Network Associates: the division I was at got annihilated

      ... I'm currently in graduate school because I've come to the belief that the Industry is just not worth it. Whenever I hear HR reps talking about how they're irked that young engineers have no company loyalty and will abandon ship for the next good offer to come along, I want to shake them vigoro

    • And I'm guessing that using company internet access to read Slashdot probably isn't getting you any brownie points.

      -j

  • Ah ha! (Score:3, Funny)

    by mormop ( 415983 ) on Thursday January 08, 2004 @11:56AM (#7915127)
    Pichinson, a self-described "doctor of reality" who helps liquidate companies, says he wouldn't have moved from Los Angeles to Palo Alto a few months ago had he not smelled more high-tech trouble looming....

    If any real estate agents sell this guy a place in Lindon, Utah around 2005 can they post the news on /.

    Cheers

  • Oh how I use to love that site lol...

    I would get a 20 dollar check every month just for running that ad banner thing at night.

    I cant believe there are any of those paid to surf companies still around.

    Anyone who uses them are the people that can break the rules, or they are just the massive pyramid scheemer guys that host websites for the sole purpose of refering people to such site so they get x percentages of whatever their referers do.

  • What is happening in Silicon Valley (Score:4, Interesting)

    by Ars-Fartsica ( 166957 ) on Thursday January 08, 2004 @12:46PM (#7915667)
    Firms that went public in 1999 have been living off of their IPO money instead of income. Thats fine - thats the idea (for a while), but these firms are facing a market that is moving towards massive commoditization and thinner margins.

    The software biz is just beginning to enter a phase of massive consolidation and commoditization just as these firms need to show strong revenues. I must agree with Larry Ellison's self-serving comments that 80% of the software firms have no future.

    This will impact Silicon Valley, which contrary to reports has not really generated much in the way of new industry in the last few years...the area is in fact turning more and more to the large firms (Adobe, Yahoo, Oracle, Cisco, Intel, Applied Materials etc) to shore up the local economy.

    But, for anyone who wants to start a new business, I can't imagine a city with more commercial real estate on the market. Take your pick!

  • That article is about right (Score:5, Interesting)

    by Animats ( 122034 ) on Thursday January 08, 2004 @01:46PM (#7916479) Homepage
    I predicted the dot-com collapse with Downside's Deathwatch. [downside.com] Most of the companies listed have went out of business long ago. The remaining ones are mostly just hanging on, with stock prices in the penny-stock range. They're examples of the living dead. Internet America (GEEK) is still around, with the stock around $1 and 82,000 customers left in Texas and Louisiana. Claimsnet.com (CLAI) is at $0.38. There are others. Even after downsizing, the bad-idea companies tend to remain unprofitable. But some of them raised enough money to continue losing at a very modest level for years.

    Silicon Valley has many non-public companies that are quietly dying. Often it's not their fault; they were support companies for the semiconductor industry, which has moved elsewhere.

    I've been reading "The End of Detroit", on how the US auto industry blew their market share. I see many parallels to Silicon Valley. Auto manufacturing hasn't been centered in Detroit for years now. Detroit, as a city, is a ghost town. The population is half of what it was at peak. See The Fabulous Ruins of Detroit [detroityes.com]. That could happen here.

  • Why doesn't this surprise more people? (Score:5, Insightful)

    by mabu ( 178417 ) on Thursday January 08, 2004 @03:23PM (#7918361)
    Most of the failed tech companies had doomed business models in the first place. Rather than plan for a conservative, common-sense approach, they opted for the "whore model" where they gave out products and services at a loss, thinking that at some point they would later get customers to pay. Even companies like Amazon.com, that has whored itself out and hemmoraged money since day one, with substantive market share, still can't quite figure out how to turn things around so the company is on solid ground.

    There are still a lot of solid, tech companies that are growing, but these are companies that didn't dine on the magic mushrooms being handed out by VCs and other people who were only in it for the short-term payoff at the expense of shareholders, the greedy public and their common sensibilities.

    As the owner of a successful "dot com", I deal with customers every day who wonder why I don't charge "whore" prices for hosting and other services. And they wonder why their cheap-ass services blink on and off or the company they've chosen isn't around a few months later? It used to be that businesses were afraid of dealing with small Internet companies for fear they wouldn't be around or would leave them hanging. Now it's the other way around: they don't trust the big companies, and rightly so!
  • I just moved to Sunnyvale, unaware of the zombie infestation.

    I guess I should just stay in my apartment.

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