Monday, October 27, 2008

On The Plus Side

Layoffs are starting to bite here in Silicon Valley. Any young company that relies on click-throughs, eyeballs, web-traffic or advertising spend in order to have a business model is about to have a tough few quarters. For example, following their doom-and-gloom presentation, Sequoia's portfolio companies are cutting back on average by 30%. However, they are not the only ones. Some 50,000 tech job cuts have been announced spanning everything from semiconductors to PCs, cell phones to cars.

This is nothing new to California's high-tech businesses. In its short history Silicon Valley has already lived through several cycles of up-and-down, with the more recent-prior in 2001 being, of course, the worst by far.

At this point we don't yet know how wide or how deep this new rift in the high-tech landscape will become. Yes, it's going to hurt; yes, we'll get through it and something else will propel the next run-up. It may be green-tech, bio-tech, web-tech, nano-tech or something-else-tech, but somehow we'll figure something out. "Hope springs eternal" as they say, and nowhere quicker or more vigorously than in Silicon Valley.

Meanwhile, Starbuck's will get clogged with unemployed geeks renting wi-fi by nursing a small coffee for 5 hours, property prices will fall further as people migrate away from the area, and the incessant calls from stock brokers touting for business will become even more strident.

However, experience tells us that on the plus side at least the commute will get easier....

1 comment:

I said...

another plus....we have just been at a mariott golf type hotel for 1/2 term holidays.

it was really quiet. Staff very helpfull. Great deals on rates!