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The New Brat Pack of Silicon Valley

Posted by Zonk on Fri Aug 04, 2006 08:39 AM
from the val-u-pac dept.
The Internet Businesses The Almighty Buck
bart_scriv writes "BusinessWeek looks at the current entrepreneurs of Web 2.0 via the lens of Kevin Rose and Digg. Although the article focuses on the rise and success of Digg, it also looks at the ethos of Web 2.0 and its successful companies, including YouTube, Del.icio.us, Facebook and Xfire. From the article: 'Clearly much has changed since 1999, and Rose and his fellow wealth punks have little in common with the sharp-talking MBAs in crisp khakis and blue button-downs who rushed the Valley as the NASDAQ climbed. In the late 1990s, entrepreneurs were the supplicants, and Sand Hill Road, dotted with venture-capital firms, was the mecca. Dot-commers relied on VCs for the millions needed to buy hardware, rent servers, hire designers, and advertise like crazy to bring in the eyeballs. For their big stakes of, say, $15 million for 20% of a company, venture capitalists received board seats, control of the management levers, and most of the equity. Now, it's more like: Maybe we'll let you throw a few bucks our way -- if you get it. Otherwise, get lost.'"
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  • Meet the new web, same as the old web.

    • Re:So are any of the Brat Pack profitable? (Score:4, Interesting)

      by HugePedlar (900427) on Friday August 04 2006, @08:43AM (#15846008) Homepage
      Indeed. Digg has had several millions invested, but Rose claims to still drive around a VW Golf and share an apartment with several people. Clearly he's having fun with his 'work', but it appears not to be earning him the same outrageous fortunes that the previous dot-commers expected.
    • It's impossible to see how YouTube is currently profitable.

      It does however, thanks to the team of legal snakes hired to draft its licence agreements, own the rights to everything posted on it. So one day, in theory, they could sift through the dreadful noise that is its video contributions for those few pearls and subsequently sell them.

      Thoroughly screwing the original film maker in the process.

      Now, there is no evidence that I've seen that YouTube is evil per se, however the licence agreement look

      • It's impossible to see how YouTube is currently profitable. It does however, thanks to the team of legal snakes hired to draft its licence agreements, own the rights to everything posted on it.

        Only if:

        1. the person posting the content had the rights to give away in the first place; and
        2. the agreement turns out to be enforceable, which it may well not be if the people posting the content didn't understand the implications of doing so at the time they posted it.

        Moreover, if YouTube ever tried to do somet

      • Re:So are any of the Brat Pack profitable? (Score:4, Informative)

        by Jah-Wren Ryel (80510) on Friday August 04 2006, @11:23AM (#15847100)
        It does however, thanks to the team of legal snakes hired to draft its licence agreements, own the rights to everything posted on it. So one day, in theory, they could sift through the dreadful noise that is its video contributions for those few pearls and subsequently sell them.

        Thoroughly screwing the original film maker in the process.

        Oh baloney.

        Here's what it says: [youtube.com]
        The foregoing license granted by you terminates once you remove or delete a User Submission from the YouTube Website.
        What is so hard to understand about that?
        You don't want them to redistribute your creation anymore?
        Then take it off the damn website fer chrissakes!

        Either way personally, I would never ever post anything on that site.

        Stupid is as stupid does.

  • In other news (Score:5, Funny)

    by jayhawk88 (160512) <rockchalk88@yahoo.com> on Friday August 04 2006, @08:43AM (#15846002) Homepage
    ...a bitter and angry Rob Malda told reports looking for a quote to "Get the hell off my lawn".
    • It might be tempting to think that, but according to (you guessed it) netcraft [netcraft.com], slashdot.org is, at the time of writing, the 76th most visted site on the internet. Congruously to our current discussion, www.myspace.com is ranked 77th.
    • Here [slashdot.org] is Taco's mistake from way back in 2000:

      8) What About the Slashdot Story Submission Queue?
      by nullspace

      I think it would be interesting to be able to view the story submission queue. That is, what type of stories are being submitted, which stories are being rejected and why, and other interesting trivia. Would you allow users to be able to view this queue, and if not, why?

      Hemos:

      One comment: Having us write rejections is probably impossible. I've tried to do the math, but considering the sheer amount of

  • Xfire? (Score:3, Insightful)

    by myspys (204685) * on Friday August 04 2006, @08:43AM (#15846003) Homepage
    "Web 2.0 and its successful companies, including YouTube, Del.icio.us, Facebook and Xfire."

    I'm sorry, Xfire?

    Am I the only one who hasn't heard of Xfire or/and it's success?

    • Re:Xfire? (Score:3, Informative)

      by RootWind (993172)
      Not entirely. You would probably only here of Xfire if you are a gamer. It's a Game tracking/IM type service. That's the jist of what it is. They have recently been bought by Viacom however. (Why on earth Viacom wants such a service is beyond me).
      • I'm really confused at this point. What is web 2.0 really? At first I thought it was just using old technologies like ajax (dhtml with xml), and possibly multimedia content or something. xfire is primarly a windows client on an im network. Very little aside from profile management is done on their website. Plus their domain was registered in november 2003 according to whois.

        Does any site created in 2003 or later count as web 2.0? By this logic, if you have a service on/after 2003 and it has a windows
    • and i thought i was out of the loop.. !
      oh wait.. no xfire is a boardgame where you shoot marbles at the person oposite you to make goals.

  • Good ol' Supply and demand (Score:5, Interesting)

    by Opportunist (166417) on Friday August 04 2006, @08:56AM (#15846075)
    The economy in a downfall, interest rates lower than the inflation, people with money trying hard to find a place for investment. That's what we have today.

    On the other hand, not too many people want to go down the dangerous road of self employment in the IT sector after the dot.com bubble burst. More so since if you have experience, are a good coder, know your stuff and don't quote "web design" as the core feature of your CV, you have no troubles finding a moderately to well paying job. Those would be the people to go for self employment, though, because without any experience (and connections) in the market, self employment is suicide.

    In other words, there's a lot of investment money and not many people daring to pick it up. It kinda feels like dot.com all over again.
    • The economy in a downfall, interest rates lower than the inflation, people with money trying hard to find a place for investment. That's what we have today.

      I have to refute these statements. There is no clear evidence at this point the economy is in a "downfall." Interest rates are not currently lower than the most widely accepted measures of inflation (cash in a CD is easily getting over 5%). There are still plenty of other places to deploy capital.

      In other words, there's a lot of investment money a

      • I can only tell it from the "European" point of view, I'm not sure what it is like in the US. And if anything, interest is going DOWN here. Big time. Current base rate is well below inflation (which isn't quite normal here, usually it was about a percent above inflation rate). And yes, we have unemployment, but very, very few people are actually really daring to try to do their own thing (also, we don't really have a history of "going on your own", most people still dream of a lifetime career in one company
    • Huh? I never really got the idea that most people in I.T. went down the self-employment road out of choice, so much as out of desperation!

      At least here in the midwest, that's what I've seen, time and time again. Someone with specific talents in an area of I.T. gets laid off from a good-paying job with a large-ish firm, can't find another job in a reasonable time-frame, so they finally decide to venture out on their own.

      For example, before my current job, I worked for a couple years for a guy's start-up bu

    • The economy in a downfall, interest rates lower than the inflation, people with money trying hard to find a place for investment. That's what we have today.

      The answer to that one is simple. Buy commodities, e.g. gold, silver and oil before the government prints your money into worthlessness.

      BTW, when the oil producers switch from demanding dollars to demanding gold or euros, you're going to see some serious inflation. They may well do this fairly soon as the value of their holdings of dollars is decreasing

  • Little in common? (Score:4, Insightful)

    by Aladrin (926209) on Friday August 04 2006, @08:56AM (#15846078)
    So, the perpetrators of the current web2.0 bubble has little in common with the dot-com bubble?

    Let's see...

    Fly-by-night operations... check.
    Crazed Investors... check.
    Funny naming conventions... check.
    Non-standard work-places... check.
    Failure-to-profit... check.

    Oh yeah, SO VERY LITTLE in common.

    Well, let's see what they don't have in common...
    Different clothes.
    Different year.

    Umm... Yeah, that's it.
    • Yep. This Web 2.0 stuff should be called Bubble 2.0.

      I like Kevin and all, but how come everytime I see him he looks like he needs a shower and a haircut? Oh and new clothes too.
      • Yep. This Web 2.0 stuff should be called Bubble 2.0.

        Dagnabit, don't call it that! Calling it that is what popped the first bubble! If we'd called it something better, I'd be making 90k a year doing nothing right now, like back in the good ol' days. Now please, let's get it straight, it's not a bubble, it's an ever-growing mountain of potential cash if people with shameful amounts of money will just keep paying for it for a little while longer.
      • No no no. Bubble 2.0 BETA
    • I disagree. From all I've seen, it looks like they're wearing the same shirts and jeans they had on a decade ago.
    • Providing no real value, but pumping the stock market.

      90-95% of Web surfers do nothing. They don't create content. They don't participate. The "Social Web" is millions of people waiting for something to happen and a small number of neurotics who think what they say is important or get a weird kick out the whole circus.

      In the meantime, you throw advertizing at the aimless creatures and place your bets.

      It's the hypnosis revenue model of television and radio. People have not changed. If this guy's ~really~ sma
    • You forget they have many more blue LEDs now - things will be *just fine* ;)

  • Attention Kevin (Score:5, Funny)

    by mustafap (452510) on Friday August 04 2006, @08:57AM (#15846081)


    1992 called. They want their inflated ego back

  • So three anecdotes make a trend? (Score:5, Interesting)

    by blueZ3 (744446) on Friday August 04 2006, @09:05AM (#15846112) Homepage
    Silicon Valley to Business Week: Get a grip!

    Ok, so there are a number of "Web 2.0" entrepreneurs who aren't in it soley for the money. (Or equally likely, IMO, some entrepreneurs are now standing pat in the hopes of a bigger payday later... but that's another issue).

    So what? Back in the "Web 1.0" days there were also a good number of folks who didn't immediately go off the deep end when VC money became available. I was personally involved with two startups just before the dotbomb burst, and both had offers that they turned down because they wanted to keep control. This is nothing new, despite the ridiculous article. (Another hint to BW: don't try for "hip"--you just come off as lame)

    And the folks in the story are still definitely a minority, as far as I can tell. There are still lots of folks out there who are trying the old scam of trying to get VCs to give them money based on a business plan and a Flash demo. It's just that now instead of "we'll give it away at a loss, but make it up on volume" there's the "we'll create a 'community' and sell advertising" theme.

    Nothing to see here. Move along.
    • whoa now, let's not get all crazy style. give them a business plan & a powerpoint presentation.. no need to waste time with actionscript!
    • There are still lots of folks out there who are trying the old scam of trying to get VCs to give them money based on a business plan and a Flash demo. It's just that now instead of "we'll give it away at a loss, but make it up on volume" there's the "we'll create a 'community' and sell advertising" theme.

      But this is completely different. The first model is insanely stupid--the sort of thing that only bubblistas would invest in (and they did). The second is not only a potentially viable business model, it

  • Web 2.0 (Score:4, Funny)

    by EnsilZah (575600) <{moc.liamG} {ta} {haZlisnE}> on Friday August 04 2006, @09:06AM (#15846117) Homepage
    I really wish people would stop using version numbers where they don't belong...
    There really should be some sort of service that lets you order someone to smack those people upside the head, preferably with a nice AJAX interface.
    • Hey, that's a good idea! I've already put together a rough outline of how we can make that work and whipped up a business plan. Want to start a new business with me?
  • I'm going to start using a totally fictitious term that sounds like it might be related to the Internet, like iWebby or something like that, and then see how long before the businessweeks start naming 'players', 'moguls', and 'leaders'.

    Talk about form over substance.

    I can see it now - "businessweek interview iWebby founder and lead VC. There no money - yet, but like web 2.0 and web 3.0 and web 4.0, the profound impact of iWebby and the soon to be termed iWebby 2.0 will change everything, and give bir

  • The More Things Change... (Score:5, Interesting)

    by eno2001 (527078) on Friday August 04 2006, @09:16AM (#15846175) Homepage Journal
    ...the more they get the lame. And nothing is lamer than Digg and Kevin.

    OK, in all fairness here's where I stand on Digg vs. Slashdot:

    -Sort through the massive amount of crap on Digg for the latest news bits that might be worthwhile. On Digg it'a all about quantity, not quality. Or to put it another way, "How do we do it? VOLUME"!!!

    -Hit Slashdot and find that some of the stories you found interesting on Digg are featured here and there is a better quality of discussion (amazingly) than there is on Digg. So this is where you get social. Digg is just an unsorted pile of crap.

    -Yeah, I'm aware that the stories are "voted" to the front page by the readers. That's fine as long as your readers aren't idiots. The more popular Digg gets, the more idiots they collect. Therefore the quality of the front page represents what the idiots want to see. Not what actual, thinking readers are interested in.

    Now, what I can also thank Digg for is the effect it's had on Slashdot. Not so much internally, but externally. I don't give a rat's ass if Taco and crew are scrambling to try and compete with Digg. That's not the effect I'm talking about. I'm talking about the somewhat homeopathic effect they've had on Slashdot. By becoming more popular, they've lured away most of the idiots. I've noticed that the level of discussion on Slashdot has improved since Digg 3.0 was unleashed. I think that a lot of the morons who annoyed the piss out of me after Slashdot became popular (I've been here since 1997 when I used to be CaptEno) couldn't resist that suction of stupid that Digg presented. The only negative effect I've seen is much slower story submission. Whereas the stories used to tick by quickly, now we're lucky if we see five new stories in a day.

    • Spot on. You can't read digg comments, you will tear out your hair and cry to your momma.

      I do hit them on occasion to see what stories they have listed since they do have quantitiy.

      Now, if we only had a slashbox thingie for digg on slashdot, I would never have to go there...
    • Amen. The biggest thing Digg needs is uber editors. SOme diggers would scream, but they need this because all too often some stupid or inaccurate story gets to the front page. In accurate stories need to be moved off much quicker and retractions put up as well. Digg is what it would be like to see the Slashdot submission queue in my opinion. Slashdot only puts up the quality posts/stories and the fact that most discussions on Slashdot are MUCH better then they are on digg. Digg only goes to two levels
    • Its reaaaal simple. Digg is for those 18, and the occasional troll.
    • I agree (well, mostly). I enjoy Digg, but only visit it when I have exhausted all the rest of my news-reading for the day and still want to see some interesting links. However, Digg has a few weak points:

      1. You can only reply to comments of depth 1 -- nothing below that. Thus, if you post some insanely stupid comment in response to someone else, no one can directly respond to you. They have to post lower down on the page with something like, "@dipshitdigger: Here is why you are wrong: [yadda yadda]," or wha

  • It's called Cyberpunk (Score:5, Insightful)

    by Qbertino (265505) on Friday August 04 2006, @09:17AM (#15846183)
    Bandwidth nearly free, hardware cheap, software free. All you need is time, skills, devotion and a good idea. Who needs VC? Back in 1999 people where shedding millions just to get a proper DB up and running. Nowadays all it takes is two clicks of a mouse and a 3 minute download. Hell, you can get yourself a new server after working a few extra shifts at Mc Donalds if the need arises. My cheap-ass PDA has more horsepower than my workstation back then. It's the age of Cyberpunk, pure and simple.

  • Perspective (Score:5, Interesting)

    by csanford (944712) on Friday August 04 2006, @09:24AM (#15846219) Homepage
    Techdirt [techdirt.com] puts this article into nice perspective.
  • Ok.. the term "brat pack" wasn't at all funny when they were using it to describe the teen stars of "The Breakfast Club" in the 1980s. Could we please not resurrect this particular dead lingo?

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