Tech Giants Capitalize on Bust

Oct. 2, 2009 -- While we're worrying about making the next mortgage payments, great corporate armies clash by night.

Long before the popularization of White House Chief of Staff's Rahm Emanuel's line, "Never let a good crisis go to waste," that idea has ruled here in Silicon Valley and the in the rest of the high tech industry.

As you may have noticed over years, tech is not a traditional business, but rather a series of redirected frenzies. First, you have a boom … and everyone works 80 hours per week, paddling first to catch the wave, then to stay atop it, then to get rich before it crashes.

Then comes the bust – often welcomed by tech folks because, for all of the misery it brings, it also seemingly presents a chance to catch one's breathe and put the craziness of the last boom in perspective. But, in fact, that is not what happens. In a process that has been going one now for a dozen boom-bust cycles over the last half-century, once the players recover from the initial shock of the crash, pick themselves and dust themselves off … they quickly recognize that a new opportunity has presented itself. Once more, a frenzy begins – but this one much less reported and much more under the radar than the Mardi Gras of the boom cycle.

This new 'bust' opportunity is almost as exciting as that presented by a "boom". It is the chance to pursue a new product, technology or market . . .or company . . .without the usual attention (and thus competition) that characterizes business life in the tech world.

Think about it: during the dot.com boom of the late 1990s, it was almost impossible to do anything in tech under the radar. Not only were literally dozens of magazines dedicated to covering the tech boom, but the mainstream media also suddenly re-discovered Silicon Valley and assigned reporters to cover it full time. Meanwhile, thousands of budding entrepreneurs, backed by billions in venture capital, were shaking every bush to come up with a hot new idea around which to build a company. Some of those entrepreneurs were your own employees – and they would have been more than happy to take one of your "secret" project ideas, steal it, and find investors to build a company to compete with you.

So, in those days, unless you had a secret skunkworks lab hidden in Burkina Faso, the world was going to pretty find out what you were up to.