During the mid to late ‘90s, the emergence of the world wide web prompted a wave of speculative investments in unproven Silicon Valley start-ups. Many of these businesses had never achieved profitability – and had no idea how to do it.
Salon’s Eric Bovim remembers the scene well:
Everywhere were buckets of champagne and canapés of smoked fish and cordials and hand-clapping — and, most of all, an overall sense that life would always go on this way. Oh, the bonhomie! We were all so lucky to be here together, to clink our crystal together and toast to capitalism’s unfurling eastward. Or at least as far as West Berlin…
There had been enough luxury at that single party to fill an entire book on the excesses of the New Economy – as it was then called.
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Unfortunately, all good parties come to an end. In 2000, the dot-com bubble burst, leaving a recession and the wreckage of many tech start-ups in its wake:
Months after [the] party, I connected with Ken and John at the launch of their e-incubator, First World E Commerce. The Wall Street Journal Europe had agreed to run a feature by me on the company, and now here I was, again, at the Hotel Arts.
Over the course of the weeks I spent interviewing them, something interesting happened: I started to ask questions. And when I didn’t like the answers, I asked more questions… The start-up fizzled months later and First World E-Commerce soon became a dot-com fatality.
Having reported on the tech wreck the first time around, what Bovim writes next is slightly unsettling. It appears to be happening all over again:
There is a new bubble enlarging before our eyes. You don’t have to take my word for it. “Back East, the Wall Street money is starting to worry that it feels like 1999 all over again. Money-losing technology companies are going public at you’ve-got-to-be-joking prices,” wrote the New York Times’ Nick Bilton before Thanksgiving. “The founders of Snapchat are getting multibillion-dollar offers — and turning them down. Is this time different? Out in Silicon Valley, many insist it is. But for the average investor, there are reasons for caution.”
Whether or not you agree with Bovim’s warning, it’s certainly a sobering reminder not to get too caught up in the hype.
Why wearable devices will be less disruptive than you imagine
The hype surrounding wearable devices has been nearly inescapable in recent months. Of course, this poses a big question: Can smartwatches, wristbands and other wearable devices actually live up to the hype?
It’s a question Kevin McCullagh at FastCompany is keen to explore:
Wearables moved from the buzz idea of 2013 into a tangle of clips, bands, badges, brooches, glasses, earpieces and headsets. It’s all too easy to be cynical about the products launched at this annual tech frenzy in the Mojave Desert, but here’s a skeptical case between the tech crowd’s boosterism and the casual scoffing. Let’s step back and try to separate the potential from the hyperbole.
With smartphones rapidly reaching saturation point, there are good reasons why tech giants including Google, Samsung, Microsoft, Sony and others would be looking for the next big thing:
As the smartphone boom matures, the tech industry is casting around for the next big growth category, and the one now being worn on many manufacturers’ sleeves are wearables. In a typically breathless statement from CES, one analyst summed up the hype: “The first big story [of CES 2014] is the real inflection point for wearable devices… It is about these devices moving from niche applications and early adopters into much more mainstream products.”
McCullagh argues that smartphones and embedded sensors are doing away with many of the reasons for using wearable computers in the first place:
Wearables are the high-profile consumer face of the wider shift to the Internet of Things. The need to wear extra gadgets, though, is being undermined by other IoT developments, as sensors become embedded invisibly in existing stuff. Why wear a sleep-monitoring wristband when the sensor-equipped mattress beneath you can do a much better job? The biggest threat to the wearable nirvana is the smartphone…
As more health and fitness apps and equipment tap into this functionality, dedicated activity trackers are likely to go the way of the alarm clock, radio, MP3 player, GPS unit and camera, swallowed up by the smartphone.
Over the coming months, how the tech giants approach the question of convincing an often sceptical public to adopt wearable devices will be interesting to watch.
How the NSA almost killed the internet
Over at Wired, there’s a look at perhaps the biggest tech story to break last year – and one with very real implications for Silicon Valley.
On June 6, 2013, The Guardian broke the story about a large-scale Prism intelligence gathering program under the auspices National Security Agency:
On June 6, 2013, Washington Post reporters called the communications departments of Apple, Facebook, Google, Yahoo, and other Internet companies. The day before, a report in the British newspaper The Guardian had shocked Americans with evidence that the telecommunications giant Verizon had voluntarily handed a database of every call made on its network to the National Security Agency. The piece was by reporter Glenn Greenwald, and the information came from Edward Snowden, a 29-year-old IT consultant who had left the US with hundreds of thousands of documents detailing the NSA’s secret procedures.
As Steven Levy reveals, the implications of Greenwald’s article had the potential to shake Silicon Valley to its very foundations:
It would be the start of a chain reaction that threatened the foundations of the industry. The subject would dominate headlines for months and become the prime topic of conversation in tech circles. For years, the tech companies’ key policy issue had been negotiating the delicate balance between maintaining customers’ privacy and providing them benefits based on their personal data… The instant those phone calls from reporters came in, that balance was destabilized, as the tech world found itself ensnared in a fight far bigger than the ones involving oversharing on Facebook or ads on Gmail. Over the coming months, they would find themselves at war with their own government, in a fight for the very future of the Internet.
Levy reveals the tech industry was initially caught flat-footed by the news:
“We had 90 minutes to respond,” says Facebook’s head of security, Joe Sullivan. No one at the company had ever heard of a program called Prism. And the most damning implication—that Facebook and the other companies granted the NSA direct access to their servers in order to suck up vast quantities of information—seemed outright wrong. CEO Mark Zuckerberg was taken aback by the charge and asked his executives whether it was true. Their answer: no.
Similar panicked conversations were taking place at Google, Apple, and Microsoft. “We asked around: Are there any surreptitious ways of getting information?” says Kent Walker, Google’s general counsel. “No.”
In the aftermath, Silicon Valley was left with an existential challenge: To regain the public’s trust, while pushing back against the worst aspects of the surveillance state.
Remembering the BBSs
Finally, a piece for those who first went online in the early 1990s. In the days of 286 PCs and Commodore 64s, long before Twitter and Facebook came on the scene, computer users used to dial-in to online bulletin board systems (BBSes).
Over at Ars Technica, Lee Hutchinson looks back at the wonderful world of the BBS:
I was 12 years old in the fall of 1990, full of bespectacled junior high awkwardness and hunting, as all preteens are, for identity. At the time, my father worked for a big savings and loan firm, and in order to be able to occasionally do some work from our home PC, he was loaned a Hayes Smartmodem—a heavy external box that connected to our Acer 286/12 desktop via a thick RS-232 cable. I truly don’t know if my dad ever used the device for work, but once the thing was plugged in, my world changed.
I am a child of the BBS era. BBSs—that’s “Bulletin Board Systems”—were sort of the precursors to the modern Internet, though that’s not quite accurate, since the Internet evolved separately and in parallel. It would be more accurate to say that many people in their 30s and older today were introduced to the world of the Internet either through or because of the interlinked telephone universe of BBSs. That one experience begat the other.
These BBS services were quite limited. Nonetheless, what they allowed the average IBM-compatible or Commodore owner to do was quite astounding at the time:
When it came down to it, there were three major activities one could do on a BBS: read and post messages, upload and download files, and play games. I quickly came to realize that me being on an IBM-compatible system meant that the files on these Commodore-hosted BBSs were useless to me, but I immediately fell in love with the message subboards. People were talking to each other! Inside the computer! And I could talk to them! And they would sometimes talk back!
The technology might have become obsolete long ago, but BBS services remain an important precursor to many of the online services we enjoy today.