The Wandering Monkey

(Below is an article I submitted to an expat-website for publication. But if they do not print it you can read it here! ;-)

"The New Silicon Valley"
by James Szyszko, a.k.a. Jimbo
2004-01-21

Silicon Valley, 2000. The San Francisco Bay Area in California, USA, has been a hotbed of activity for at least the last five years. Every cafe and restaurant has a rush at lunchtime with well-dressed young people carrying cell phones and briefcases. Lunchtime conversation is an exchange of energy. Every head present buzzes with their ideas and the backing of their six-figure income or their hundreds of thousands of dollars in stock options.

Silicon Valley is a place you can take a new concept, begin a company, and there is no limit to your success. It is an experiment in new ideas. Opportunity is rife. People come from all over the world to work here and be part of the excitement.

Cash flows everywhere. Venture capitalists invest millions into these new organizations. Some receptionists are paid $80,000. Single-family homes with two bedrooms go on sale for $600,000 and sell within the week for $680,000. And every now and then we talk about "them." You hear of them like lottery winners; so-and-so from this company made $2 million. A woman who worked as an office manager for three years cashed in her options at $8 million. She is 32 years old and will never have to work again.

This boom is largely based on a new way of valuing companies. Organizations no longer need to prove profitability. Enterprises may "go public" and sell shares millions of dollars in shares on the stock market and not necessarily make any money. Tomorrow another will appear, it will get funded, and the process will continue. It is a game, a merry-go-round which is still spinning. Venture capitol pushes it along, and more and more money turns out of it. But it cannot last forever.

The market must eventually realize that many these companies don't make money. Or, perhaps *everyone* has realized this, but there is no good reason to stop it. Two, three, or a hundred more companies will go public. Twenty, thirty, or a thousand more millionaires will be created.

Eventually the market must adjust. The game will crash. Everyone must know this. But not yet. Not today. Just one more spin...

Silicon Valley, 2003.
At dinner with my friends, one of four is unemployed. There are empty tables at the restaurant. The fall of the Valley preceeded the country-wide recession. We at the table saw it coming at least a year before the rest of the nation felt it.

We speak of Greg and Barbara, our friends who will be married. They've bought a house on the peninsula and Greg commutes over an hour each way to his job in the south bay.
And we speak of the hobby which brought us all together - swing dancing. Back in the day of the boom, you could go swing dancing nearly every night of the week. Each place had a live band. There were are least five dance schools, and people came out at night wearing 1930's zoot suits, poodle skirts, and vintage dresses.

We men joined swing dancing usually to meet a girl. The women joined probably because they just wanted to dance. The boom is over, but the dancers are all still together. During an era in which people may change jobs twice a year, the swing dancers are about the only consistent thing.

Silicon Valley is no longer a magnet. The eyes of the world do not focus here, and those people who have not cashed in or married now decide what to do. Some move back home or to other cities for jobs. Many go to graduate school. And some go looking for that place where the buzz is still the air -- where the excitement of the world comes to call. The new Silicon Valley.

And for me, that is Shanghai.