The commercial and cultural explosion of the digital age may have been born in California's Silicon Valley, but it reached its high point of riotous, chaotic exuberance in New York City from 1995 to 2000—in the golden age of Silicon Alley. In that short stretch of time a generation of talented, untested twentysomethings deluged the city, launching thousands of new Internet ventures and attracting billions of dollars in investment capital. Many of these young entrepreneurs were entranced by the infinite promise of the new media; others seemed more captivated by the promise of infinite profits. The innovations they launched—from online advertising to 24-hour Webcasting—propelled both the Internet and the tech-stock boom of the late '90s. And in doing so they sent the city around them into a maelstrom of brainstorming, code-writing, fundraising, drugs, sex, and frenzied hype . . .
until April 2000, when the NASDAQ zeppelin finally burst and fell at their feet.
In the pages of Digital Hustlers, Alley insiders Casey Kait and Stephen Weiss have captured the excitement and excesses of this remarkable moment in time. Weaving together the voices of more than fifty of the industry's leading characters, this extraordinary oral history offers a ground-zero look at the birth of a new medium. Here are entrepreneurs like Kevin O'Connor of DoubleClick, Fernando Espuelas of StarMedia, and Craig Kanarick of Razorfish; commentators like Omar Wasow of MSNBC and Jason McCabe Calacanis of the Silicon Alley Reporter; and inimitable Alley characters like party diva Courtney Pulitzer and Josh Harris, the clown prince of Pseudo.com. Together they describe a world of sweatshop programmers and paper millionaires, of cocktail-napkin business plans and billion-dollar IPOs, of spectacular successes and flame-outs alike.
Candid and open-eyed, bristling with energy and argument, Digital Hustlers is an unforgettable group portrait of a wildly creative culture caught in the headlights of achievement.
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About the Author
Stephen Weiss, at twenty-five, was executive vice president of RedFilter.com and a former magazine editor. He lives in New York City.
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Evangelists and Entrepreneurs
The rapid proliferation of the Internet and the World Wide Web in the late 1990s would not have been possible without the PC revolution of the '80s. But the story of the Internet is much more a tale of the triumph of network computing the science of getting computers to talk to one another.
Back in the day when the world's most powerful computers took up entire rooms, and were controlled by punch cards and powered by vacuum tubes, scientists began looking for ways to access the country's half dozen supercomputers from afar.
In the late 1950s, in response to the Soviet Union's early lead in the space race and the paranoia of the Cold War, President Eisenhower set up the Advanced Research Projects Agency (ARPA, later chanied to DARPA) to fund research and development of special projects for the Defense Department. One of its first tasks was the creation of a national computer network called the ARFANET to link these computers. The ARPANET would be a distributed network in which any computer could reach another computer though numerous paths on the network. Among the goals of the new network was to create a new way for surviving command centers to maintain communication with each other in the case of nuclear war, even if direct links between them were broken.
A series of technological breakthroughs in the following decades paved the way for ARPANET to emerge as the basis for a worldwide electronic communication network, Soon after, in 1969, Stanford and UCLA exchanged the first line of text over the ARPANET TCP/IP (Transmission Control Protocol/Internet Protocol)emerged in the '70s network protocol as a kind of universal computer language; its worldwide adoption allowed local area networks (LANs, as office networks are known), to communicate with other networks over the Internet. By linking LANs to one another, the Internet became a network of networks.
In the 1980s, the Defense Department opened up the use of the Internet to scientists sharing information over the system. Through the late 1980s, librarians, academicians, and a small but growing collective of hobbyists were using the Internet. In 1991 the National Science Foundation helped make the Internet available to commercial enterprises for the first time.
That same year, a British scientist named Tim Berners-Lee, working at CERN the European Organization for Nuclear Research in Geneva, Switzerland released to the public a new system called the World Wide Web, which allowed users to view Internet sites as represented graphically in HyperText Markup Language (HTML). The first Web users used FTP (File Transfer Protocol) to access CERN's computers and see the new visual Internet.
By the early 1990s, New York computer buffs had developed a handful of dial-up bulletin board services (BBSs) like Echo and SonicNet; meanwhile, a vibrant community of developers was working to turn the CD-ROM into the first successful interactive multimedia technology. The most visible of the CDROM developers was Voyager, a company that got attention for both its innovative work and its self-destructive management team.
But the advent of the Web displaced the promise of CD-stored interactive media, and soon the fledgling CD-ROM industry had all but disappeared. In its wake it left a budding group of computer graphic artists and digital entrepreneurs who helped seed the early Internet industry.
Another large talent pool emerged from the ranks of early Internet ventures like Prodigy, an online services company headquartered in White Plains, New York, that was victimized by America Online.
With the invention of Mosaic and Netscape, which enabled Internet users to browse graphical Web pages on the Internet, artists and technologists in New York began to experiment with visual effects and building some of the first websites in the world. Teaching themselves HTML, they soon mastered the science of codingfor the Web.
And out of dinner parties thrown by Mark Stahlman and his Cyber Salon, the New York New Media Association (NYNMA) was formed, which helped build the concept of community through monthly events known as CyberSuds.
Jack Hidary [CEO, EARTHWEB] The people who created DARPA realized that in order to create a research community focused initially on nuclear research because they were doing a lot of nuclear research at the time they needed to connect their computers together. It was that simple. The first test bed was about four universities and two national laboratories. Stanford was in there, Columbia was in there, Los Alamos. So you had five, six different sites, all connected together. And it worked, and it also gave them a measure of redundancy, because if one node between Los Alamos and Stanford went down, you could still connect to Los Alamos another way.
This redundant system made things fundamentally different from the circuit-based switching we have in, say, our telephone system. The analogy I would use is the highway system. Imagine if I wanted to create a highway from here to L.A. just for me to drive on. That's basically what our telephone system is today, because you have to create one single circuit dedicated to your conversation between here and L.A. And that's expensive, just as a single highway between here and L.A. just for us would be. Instead, our highway system is very much like what the Internet is. We have on-ramps and off-ramps, but we all share.
ARPANET quickly grew and added university after university, because it was so useful and required very little maintenance. Each node maintained itself, which was the beauty of the system...
Exclusive Author Essay
Digital Hustlers is an oral history of the Internet revolution as told by the entrepreneurs who experienced the rise and fall of Silicon Alley, New York's new media community.
Silicon Alley served as the proving ground for some of the most important aspects of the commercial Internet industry -- content, advertising, design, and Web development. What made the Alley unique was its close ties to New York's powerful industries: publishing, advertising, financial services, and the media. Many of its leading figures did not come from previous technology positions, but out of these more established industries. Some even came from the off-Broadway theater and the arts community.
As the authors of the book, we set out to capture the extraordinary stories of the Alley group, from their earliest inklings that the Web could provide a groundbreaking business opportunity to their ambitious attempts to launch new technology companies out of their cramped Manhattan apartments, to the Gold Rush years of the late '90s, to the decimation of the industry that followed the turn of the century. Like everyone who was swept up by the Internet in the 1990s, the Alley entrepreneurs found themselves at the epicenter of an incredible moment in history.
"We used to joke that the Internet would be as big as CB radio. CB radio was huge, and then they wrote a hit song about it and it disappeared," remembers Kyle Shannon, cofounder of Agency.com, when asked about the infant years of the Internet industry. One of the most successful entrepreneurs in the Alley, Kyle helped build a multi-billion dollar public company that, after the Nasdaq crash, lost more than 95 percent of its value.
"I remember the first time I saw the Web, my jaw literally dropped. I just sat there for ten minutes staring at it, and I knew that my life would never be the same -- that our lives would never be the same," EarthWeb's cofounder and former CEO Jack Hidary says in the book. He too succeeded early and then paid dearly during the crash, losing his position at the helm of his own company in a 2001 management shakeup.
Throughout the year 2000, we sat down with hundreds of people working in Silicon Alley, from the founders of companies like Razorfish, DoubleClick, TheGlobe.com, HotJobs, Pseudo, and Jupiter Communications to top level venture capitalists and institutional investors who played a major hand in shaping the destiny of this community.
We also investigated the homegrown community-building efforts of industry groups like the New York New Media Association (NYNMA) and the World Wide Web Artists Consortium (WWWAC), whose email discussion list served as a de facto Main Street for Silicon Alley. The efforts of these groups were critical in planting the seeds for a technology community in New York City, a place that had the reputation for being hostile not only to technology companies, but to all entrepreneurial efforts.
We interviewed people working in the trenches at dozens of Internet companies and met with artists, writers, designers, and programmers to talk about their experiences in and around New York City's high tech community. And we also listened to journalists like Jason Chervokas (cofounder of @NewYork), Jason McCabe Calacanis (founder and CEO of the Silicon Alley Reporter), and Anna Wheatley (the cofounder of Alley Cat News.) Working in Silicon Alley as entrepreneurs, we were fascinated by the experiences of the early Web workers. They offered an opportunity to explore the types of successes and failures that define the early years of an emerging field.
"In every industry, whether it's finance or automotive or fashion, there are some people who can claim a piece of the business away from the establishment. I think what's unique about the infancy of Silicon Alley is that it was a huge drove of us that forced this thing to happen, and created something out of nothing," Cecilia Pagkalinawan of BoutiqueY3K says in Digital Hustlers.
Silicon Alley is representative of all of the cities and towns across the country that became immersed in the promise of wealth beyond the imagination, the rewards of a new economy powered by ideas and technology. Trillions of dollars disappeared when the Nasdaq shuddered after March of 2000 and lost 3,000 points. We hope Digital Hustlers will be one of the first histories to capture what these tumultuous years really looked like from the inside and will begin a real assessment of the ramifications of this thrilling, transformative, and ultimately devastating chapter of business and cultural history. (Casey Kait, Stephen Weiss)