Valleywag: Chris Nolan

The bubble to end all bubbles?

Owen Thomas — Thu, 03 Apr 2008 11:20:00 PDT

Are we in a bubble? Far too late to be asking that question, says Chris Nolan, a former Valley newspaper gossip who now runs a startup, Spot-On. She weighs in on the current market crisis and its effects on the tech business. Her thesis: New regulations will on investment banks will bring an end to the tech-stock bubbles on which Valley VCs have feasted. (I asked if this meant she was back in the tech-gossip game; Nolan's column served as one of this website's inspirations. "I'm writing about business and politics," she demurred.) Nolan compares sketchy mortgages approved by banks to the wafer-thin startups taken public by stockbrokers a decade ago. A brief version of her 887-word argument, followed by my take on where Nolan goes wrong:

Investment portfolios of universities, pension funds and charities expanded in value as Americans put their savings into stocks. As a result, stock prices rose. Richer, these institutions put money into venture capital funds. The funds spent like drunken sailors. As long as the stock market stayed up, they could reap the rewards of their investments. Venture capitalists, like mortgage companies, relied on investment bankers to lay off some risk by selling their wares to someone else — in this case, IPO stock to the public.
If all this reminds you of the U.S. mortgage crisis, a time where anyone could get a loan because it was assumed that the price of real estate would go up, up, up, you are not alone. During the stock bubble, the SEC made no bones about its inability to keep up with the number of filings it had to process, review and approve. Something similar happened at the mortgage banks. As long as everyone signed a piece of paper saying they knew risk was involved, the loans got written. Can you imagine a Netscape public offering — the company's main product was given away — sponsored by a financial institution supervised by the Federal Deposit Insurance Corp.? Me neither.

A brilliant comparison. But Nolan puts too much stock in the powers of regulators. "Money goes where it is wanted, and stays where it is well treated," former Citibank CEO Walter Wriston once told Wired. Already, U.S. regulations have driven some public stock offerings to new markets like London's AIM. No regulatory scheme is airtight; indeed, the U.S.'s regime, relying too heavily on rules rather than principles, makes it all too easy to find loopholes. New regulations, while hard to argue against, will simply generate new ways of avoiding them. And psychology tells us people will always fall prey to bubbles. Will VCs will be among the profiteers? Perhaps not. And few among the Valley's entrepreneurs will shed a tear for them. They'll be too busy finding something new to inflate, with someone else's money.

(Photo by Bub.blicio.us)

Andy Ihnatko, faux Apple CEO?

Owen Thomas — Mon, 16 Jul 2007 07:30:48 PDT

Is Andy Ihnatko Fake Steve Jobs? Valleywag was the first to name him publicly as a candidate for writing the faux diary of Apple CEO Steve Jobs, but now Ihnatko is being fingered again, thanks to a needlessly elaborate Internet sting. Could the longtime Mac columnist be the man behind the curtain?

FOR The sense of humor. Ihnatko's writing has verve, panache, and more than its fair share of randomness — traits shared by whoever's writing Fake Steve Jobs.
FOR The IP address. At first, I was inclined to dismiss the "discovery" by Web developers at Sitening that Fake Steve Jobs has sent email from a Boston-area Internet connection. (The same data that Sitening uncovered through their elaborate sting operation was available, for months, to anyone who bothered to look at FSJ's email headers, and well known among FSJ trackers.) But everyone, in their rush to re-report this old news, has failed to notice the obvious: Andy Ihnatko is a Verizon customer.
FOR The desperation. For all his cunning insights about Apple and the tech world, Fake Steve Jobs appears to be a naif when it comes to business. He's been hitting up potential advertising sponsors for a while, and he recently begged for help with setting up Google AdSense on the FSJ blog, in a post that was subsequently taken down. Ihnatko's own blog, YellowText, also currently doesn't run ads. Is that because Ihnatko makes enough money from his publishing royalties that he doesn't have to bother — or because, like FSJ, he doesn't know how to insert ads onto his blog?
FOR The silence. Ihnatko has never written about Fake Steve. Fake Steve has never written about Ihnatko.

That's the case for. Here's why Ihnatko might not be Fake Steve.

AGAINST The sense of humor. Ihnatko is funny, but Fake Steve is funnier. Way funnier. If it's Ihnatko, he's saving his best stuff for his alter ego, which might annoy his editors at the Chicago Sun-Times.
AGAINST The IP address. Geotargeting is hardly an exact science. Advertisers who try to use it to target local ads know that it's notoriously unreliable. And even if it's accurate in this case, who's to say Fake Steve Jobs wasn't traveling in the Boston area when he sent those emails?
AGAINST The insiders. Chris Nolan, the former Silicon Valley gossip columnist who now runs online-content distributor Spot On, insists that FSJ is not a writer, based on her email conversations with him. (Update: Nolan asked me to clarify that she meant a professional writer, which is also how I took it.) Steven Levy of Newsweek, I hear, believes that he's a former Internet-media CEO. And many others believe that FSJ is written by multiple people.

I'm not convinced it's Ihnatko. I'm not convinced it's not. Perhaps Ihnatko, who's agreed to an interview with Valleywag, can clear up matters. We'll see. Until then, the hunt for Fake Steve Jobs continues.

"Does this bash make my bubble look big?" Expert advice on extravagant tech parties

Nick Douglas — Wed, 28 Jun 2006 16:53:31 PDT

PaidContent.org founder Rafat Ali threw an NYC media party last night to celebrate his blog's first investment round. The "guys in nametags making pitches" reminded media pundit Jeff Jarvis of the bashes of the dot-com boom. The Gawker Media overlords were bouncing biz-dev people back and forth like Web 2.0 ping-pong. "All the hookups had the blandness of lesbian sex," said one attendee. "Nobody has any money, so there's no penetration."

Not everyone felt the same queasy deja vu. ZDNet writer Donna Bogatin felt the party was, well, too boring and productive to match those "just-for-fun" free-for-alls of the 90s. (Or Bogatin's learned to network since then.) Valleywag asked expert socialites: What makes a party a sign of the tech bubble? It boils down to the food, the drink, the entertainers, the partiers, and the scene.

The food
Spot On editor Chris Nolan (who welcomes Ali and GigaOM blogger Om Malik to the funded-content-site fold, which Spot On entered a year ago), has attended (and thrown) parties since her days as the Valley's gossip columnist. "You need free sushi," says Nolan, "and lots of it. And not veggie sushi, free raw fish. Made before your eyes by real Japanese guys."

"An entire table devoted to cheese, preferably with a cheese sommelier," says Business 2.0 online editor Owen Thomas, who wrote for the snarkzine Suck during the Bubble.

The drink
"It can't be a 90s bubble party without Absolut," says Dot-com marketer David Parmet. "Could we say Stormhoek is the new Absolut?" With marketing blogger Hugh MacLeod pimping this wine in the Valley through branded prints, blogging, and sponsored geek dinners, Stormhoek is the official drink of the Valley alcoholic.

The entertainers
Everyone agrees, the bands have to be cool. "Ask Jeeves had Elvis Costello," says Nolan. "AMD had Bob Dylan and his son's band, the Wallflowers. RSA had RunDMC. So you need some bought-and-paid-for musical talent. Or someone like Courtney Love, who showed up at TED one year."

Judging by that, the five-year party hasn't even started. "The bubble's on the way back," Nolan says. "But until I see Diana Krall cooing to the Flckr kids, I wouldn't get too excited."

Slate and Wired writer Paul Boutin says, "It's not a bubble-era blowout unless The Who's on first."

The partiers
Who shows up in a bubble party? "Hot chicks," says Thomas. "Specifically, hot chicks there to pick up free drinks and Internet billionaires. God, you're giving me flashbacks, STOP!"

Thomas also cites "the presence of anyone whose business card includes the words 'business development.' More than half the crowd works in public relations. The rest is looking for a new job."

Parmet goes glassy-eyed. "When you see Jeff Daschis of [profligate Internet marketer] Razorfish appear with Kyle and Chan of Agency.com on the balcony, kind of like Gatsby...then it's a bubble."

The scene
In the end, it's all about the memories. "The most over-the-top private party I went to," says Nolan, "was the one Amy and Ted Barnett threw at their house on [San Fran's] Dolores Street. Valet parking in the Mission District. Oyster in champagne shooters and everyone getting stoned in the backyard."

"When I'm using a piece of corporate shwag to funnel candy up my nose," says one tipster, "then the bubble is upon us."

Party like it's 1999: LAUNCH PARTY: Betting on One Big Night [Industry Standard]
Photo: Dance floor laugh [Mr. Wright at Flickr]