Silicon Insider: Signs of Life in the Economy
Dec. 17, 2002 -- Get ready for a nasty case of whiplash.
I don't think I've ever mentioned in this column that for the last four years I've taught a course in professional writing at my old twice-alma mater, Santa Clara University. I only teach it one quarter each year, to a small seminar composed mostly of seniors. As I write this I'm in the middle of grading final exams.
The structure of the class is that each lecture addresses a different type of professional writing, beginning with public relations, advertising and speechwriting, and ending 10 weeks later with screenwriting, novels and poetry. I start it with assignments such as introducing a guest speaker or announcing a new backpack, and end with writing the proposal for a non-fiction book. Pretty ambitious stuff, but my students (to my amazement given my own academic career) are always up to the task.
One important part of each lecture is that I try to tell the students about the pluses and minuses of each of these careers, and how much they are likely to be paid. I even make them attach an invoice to each of their homework assignments. It can be rather shocking for them to get "paid" $35,000 for an advertising campaign they dashed off in 10 minutes, and $25 for the CD review they lovingly labored over for two hours.
One of the best things about the class in the first few years was that the labor market was so strong that a job was waiting for any student who wanted a job in PR or advertising or corporate communications or journalism. I hired some myself. This added a certain excitement to the class, making it less like another theoretical seminar, and more like basic job training.
Last year, and especially this year, have been a different story. Newspapers and magazines and the PR and advertising industries that serve them have been in the worst tailspin since the Great Depression. It was especially difficult this fall, when even as I was lecturing on magazine writing, my own magazine, Forbes ASAP, the magazine I'd help found a decade ago and of which I'd been editor for three years, died. On one particularly awful day, I taught my class (trying to be as upbeat as possible), then went off to the magazine for the official termination meeting with corporate HR.
Through all this, I always felt it was important for me to be as honest as possible with my students. So, whereas in the past I might talk about job opportunities, this year I counseled my serious student-writers that they might want to consider hiding in graduate school or a safe job for a year before seriously launching into a career in journalism or communications. Don't worry: the good times will come again, I told them in late September, even as I swallowed my own fear that they might not.
Why am I telling you all this? Because in the last two weeks of the course in early December, I suddenly changed my tune. It wasn't a conscious decision, just a gut feeling that found voice in one of my lectures. Out of the blue, I told my students "It strikes me that you just may find a hungry employment market by the time you graduate in June."
The Small Indicators Are Looking Up
Certainly the autumn stock run-up had something to do with it. But, too, there has been a lot of counterbalancing depressing news — more lay-offs, a rumor of war, the growing risk of deflation — to dampen any outburst of optimism. And yet, there I was, filling young minds with sunny news.
So why did I tell them that? And why, in the face of more bad economic news by the day, am I suddenly so certain that good times, especially in Silicon Valley, are just ahead? Because of something I try to teach my students: that sometimes you find your story not from official documents or formal interviews, but from the tiniest of clues — from the quality of furniture in the company lobby and that unexpected departure of a beloved veteran employee.
It is those little indicators that are pointing upwards for me right now.
For example, did anyone else notice that the semiconductor industry grew 1.4 percent this year? That may not seem much compared to the industry's go-go growth of a few years back, but it's one heck of an improvement over its 32 percent revenue decline last year.
Even that little growth suggests not just a point of inflection but the beginning (despite tech research firm Gartner's prediction of slow growth next year) of an upward trajectory. The history of the chip industry is one long sine wave, so if things are turning, they will turn big. I suspect that's what industry pioneer Wilf Corrigan of LSI Logic means when he predicts chips will grow 30 percent next year.
Meanwhile, more good news has popped up from the most unlikely sources. Yahoo, whose meltdown set off the dot-com bust, out of the blue last week announced that it will end the year ahead of its 2 million subscriber target and expects another 20 percent growth next year. That certainly doesn't fit with the dreary scenario for next year painted by AOL Time Warner.
And Adobe Systems, that bellwether of health in the corporate office, saw its sales not only jump for the first time in more than a year, but even beat analyst estimates. And the hottest company around, Google, inaugurated a new shopping site, Froogle, to cleverly bring its search algorithm to retail.
As a sign of a return to rational financial reporting, Coca-Cola announced that it would stop making quarterly earnings forecasts. Thank God. If more firms will follow Coke's lead, we'll go back to a world in which companies focus on their core businesses and analysts actually do some real work.
The Old Entrepreneurial Excitement
But to my mind, the best indicator of good times to come was a visit by a neighbor of mine. He arrived in the middle of the giant storm last weekend, his laptop in hand, and asked if he could show me something.
It proved to be the third draft of a business plan for a new company. I won't tell you who he is, because he's got an employer; and I won't tell you what his plan is about, but it's a humdinger. It'll take him two years and $30 million to realize his vision, and he's going for it, despite a tight venture capital market and a bad economy.
As I listened, I felt that old entrepreneurial excitement rising up in me all over again. It struck me that there must be a guy like my neighbor right now on every block in Sunnyvale and in the rest of Silicon Valley, and in every town and city in America and most the rest of the industrialized world.
They've been dreaming for two years, and now, sensing that the doors are slowly opening, they're ready to bust out. Me too. Nothing — not war, not a bad stock market, not even stupid new regulations — can stop the surge now.
And what about that whiplash I started this column with? That's something else I teach my professional writing students. It is that we in the press, though we pride ourselves upon our maverick, independent natures, are in fact sheep to the Zeitgeist.
We all wake up one morning convinced that everything is going bad and suddenly everywhere you look are stories with a dark cast: lay-offs, corruption, hard times, bad economic news. This can be true even when the underlying labor and economic statistics haven't really changed. Sometimes it's hard to tell whether the press covers economic downturns and upturns or actually sets them off.
We journalists have been writing those bleak stories now for nearly two years. And frankly, we are all getting pretty sick of it. We're ready to make the change back to covering good stuff — hot companies, overnight tycoons, cool products. It won't take much now to flip us. The media's sunny morning is coming any day.
You'll know that morning by pain you'll feel in your neck after doing a double-take at the headlines.
Michael S. Malone, once called “the Boswell of Silicon Valley,” most recently was editor-at-large of Forbes ASAP magazine. His work as the nation’s first daily high-tech reporter at the San Jose Mercury-News sparked the writing of his critically acclaimed The Big Score: The Billion Dollar Story of Silicon Valley, which went on to become a public TV series. He has written several other highly praised business books and a novel about Silicon Valley, where he was raised. For more, go to Forbes.com.