The Official Rodes Fishburne Hub

This article, “When Whirl was King,” was written for Forbes ASAP in the fall of 2000 as the wings were starting to peel off the digital revolution. At one point during the Bubble Years, a venture capitalist was heard to say that the invention of the Internet was more important than the discovery of fire.

When Whirl Was King
Rodes Fishburne, Forbes ASAP, 02.19.01

“In a few years hence those who neither witnessed nor partook of this excitement can scarcely credit its extent and those who did will very likely be pained by its rememberance.”—A letter from Robert Effinger to his brother during the California Gold Rush, 1848.

The billboards blinked. It was that time of evening, speeding down Highway 101, when the signs on the side of the road whipped past like a flip book: “You shall receive…24/7…Initial Public Offering…Until You Burst…Totally Free… Now.” Hyper thinking. The car accelerated.

In years to come, when we look back, it will be hard to remember the mania as it was—or even the order in which it occurred. As in an epic love affair, time was lost, chronology misplaced, individual events fused together into one gigantic money-freaked carnival. It all seemed to happen at once.

The clippings of aging newsprint will precisely tell the New Economy story in dollars and stock options. But the tale of money alone won’t capture the true nature of this whirling mania. Tales of fortune and uncourted luck grow stale after being twice told. It is the attitudes and ideas and behavior that linger, serving as signposts in this strange virtual topography, reminding us of our insatiable capacity to believe almost anything if the circumstances are ripe. Looking back, we will likely discover the only guiding principle during the Internet boom was the fever—and the disorienting belief that the fever itself was the future.

Spring 1999: Nasdaq high 2,652.05
They meet us at the door, five of them, with yo-yos tied to their fingers. “We’re in stealth mode,” says the leader proudly. “The yo-yos are just for cover. We tell everyone we’re a yo-yo company.” The rest of the group cracks up.

The business, called Woosh, is housed in the empty shell of an old Borland building in Scotts Valley, California. “Pretty nice spot, huh?” the leader says, waving to the surroundings. The group, composed of recent dropouts from Stanford University, leads us through the empty, glass-walled reception area, past the Zen meditation garden, to a patio next to the indoor swimming pool. An angel investor thought this would be a good place for them to concentrate on the business.

“What we’re building is a…” the leader freezes and then turns to the rest of the group. “Should I tell them?” An imperceptible signal passes. He turns back to us. “What we’re building is a…” The explanation takes 90 minutes. Something about linking small businesses to Web sites using back-end software that will turn all the inventory into zeros and ones. Most of the explanation is incoherent gibberish, but we are too busy nodding along to object. The looks on their faces are those of true believers. Finally, in frustration, the leader draws a diagram of the business on a piece of paper: It is a gigantic asterisk.

As we say good-bye in the lobby, the group plays with yo-yos, joking around and speaking in Star Wars dialogue. “There is no try, only do,” says one of them in a Yoda voice.

The leader opens the door for us. The back of his T-shirt reads: “Start-up. Kick butt. Cash out.”

To leave Stanford University, one of the most prestigious in the world, you don’t go to the dean’s office with a practiced story and parted hair to explain yourself. You go to the campus Web site and click the button that reads, “File a registration annulment.” In the months to come, the brothers at Theta Delta Chi house alone would quit to start eight companies.

Fall 1999: Nasdaq high 3,937.30
Bill Burnham stalks the stage at the PricewaterhouseCoopers conference at the Millennium Hotel in New York City. Recently he left his position as an electronic commerce analyst at Credit Suisse First Boston to become a venture capitalist at Softbank. He’s 28 years old. “People in their 20s and 30s have a lot of energy and a lot of drive,” he says almost giddily. “Working for a startup is a very forgiving environment. You can make a lot of mistakes and still come out winning.”

He’s on a roll, dispensing wisdom about what it’s like to be gripping the wheel. Asked why young people make the best employees for Internet startups, Burnham turns to the audience and shrugs, “Because you can own that person because they have no other responsibilities.”

Winter 1999: Nasdaq high 5,048.62
Kathy, a middle-aged business development manager at an e-commerce company, begins to sleep with the television on. She’s made so much money day trading put and call options in the morning hours, she doesn’t want to waste time turning on the television. After months of waking to the split-panel display, where pasty anchormen urgently interview analysts, she finally turns her television off. But a residue remains: The pattern of the stock ticker has burned into the screen.

Bob Metcalfe, inventor of the Ethernet and founder of 3Com, holds court at a private dinner during the TED (Technology, Entertainment, and Design) conference in Monterey, California.

During dessert, Metcalfe is tapped on the shoulder by Sky Dayton, the 28-year-old founder of Earthlink, and steps out of the room. He returns 15 minutes later with a quizzical smile on his face, telling his dinner companions, “I had to explain Metcalfe’s Law to the young blonde woman who was with Sky.” Then he asks, “Who is Courtney Love?”

Spring 2000: Nasdaq high 4,963.03
“The Internet is the greatest revolution in the history of the world.” —Tim Draper, the New York Times

Five young men race down the corridor, looking for a way into the lecture hall. “This place is packed,” one of them yells as they slide to a stop in front of a side door. It’s locked. They knock. A woman opens the door halfway and peeks out. “There’s a little room here, but you’ll have to sit on the floor,” she says.

The heat is suffocating; each red, sweaty body is giving off enough energy to power a lightbulb. A television cameraman takes up most of the space at the top of the stairs. The Stanford University engineering lecture hall, banked like a Pompeian amphitheater, steers all eyes to the table clothed in regal red on the stage.

Doug Hofstadter, professor of computer science at Indiana University, welcomes everyone to the Saturday afternoon event. He is breathless. A woman in the fourth row takes notes on her laptop computer.

The purpose of the symposium is to answer the question, Will spiritual robots replace humanity by the year 2100? “I deliberately did not include among my panel what I would call naysayers,” announces Hofstadter. “That is, people who think that it is impossible for other media, other substrates, to support consciousness or even intelligence…I feel that this is a question of shades of gray.”

Substrates?

The temperature inside is approaching 80 degrees. A young man with a ponytail sits on the floor next to the cameraman and pulls off his blue T-shirt. He holds a digital recorder in front of him like a Geiger counter.

The professor continues: “Animals have migrated from the sea to the land. Maybe [they] can migrate in other ways…. The original title that I made for this conference was ‘Who Will We Be in 2093.’”

Ray Kurzweil, inventor of speech recognition, rises from his chair to enthusiastic applause to suggest that, in the future, tiny robots called nanobots will swim around in our brains, stimulate our emotions, and expand our intelligence. “If the nanobots take up their positions by all the nerve fibers coming through all of our senses, they can shut off the senses from our real senses, provide the signals we would be receiving if we were in a virtual environment, and therefore provide full immersion virtual reality involving all of the senses,” he says.

Eight hundred acolytes exhale hot breath at once. The temperature rises. The shirtless Stanford student next to the cameraman takes off his Birkenstocks and assumes the lotus position. If he takes off his shorts next, he will be naked: Homo sapiens alfresco nodding along as other Homo sapiens talk about the triumph of Homo silicon.

Bill Joy, chief scientist at Sun Microsystems, takes center stage: “I believe genetic engineering, nanotechnology, and robotics can bring almost unimaginable wealth. They can cure diseases, they can end poverty, they can end the need for work.”

But, he adds, “We’re on the cusp of the further perfection of extreme evil—an evil whose possibility spreads…to a surprising and terrible empowerment of extreme individuals.”

The heat is getting worse. People shift uncomfortably in their seats. Somewhere in the back is the thud of a body hitting the floor. The faithful are fainting. A woman shouts to the nine computermen below, “Doctor! Help!” A few faces on the stage turn upward, like men looking up at a noise during a championship chess game. But these experts on human biology are Ph.D.s, not M.D.s.

Finally, an intermission. The crowd rushes the stage. They stand three deep around Bill Joy, nodding at everything he says. A woman presses her card into his hand and asks, “Do you consider yourself a prophet?”

Summer 2000: Nasdaq high 4,274.67
He looks like a traveling salesman who has lost his samples case. Sitting on the edge of a pool chair in the back courtyard of the Hyatt Rickeys in Palo Alto is John Pankiw, the erstwhile cofounder of CamShopper.com. A short young man with a Ned Beatty face, his black dress shirt open at the collar, he’s thrilled to be in the heart of Silicon Valley.

According to his earnest but crude business plan, John wants to install a mobile sales force in malls and department stores all over America, strap them into roller blades and affix bicycle helmets with Webcams mounted on top of their heads. Then, when someone in northeast Oregon or upper Bhutan or midtown London wants to see what Bloomingdale’s in New York City has going in men’s polo shirts, the sales assistant can wheel over to the right rack, locate the clothing, and use the third eye to send the product’s image over the Internet.

John has flown in from Florida. He’s never been to Silicon Valley before. He’s never written a business plan. He’s never met a Sand Hill Road venture capitalist. But he’s not concerned. He may be the first love child of the millennium born of the union between the media and the mythos of the Internet revolution.

“Anyone who reads Wired or Red Herring or any magazine similar to that gets the perspective that if you have a good idea, you can come out here and present it, and if someone likes your idea, you run with it,” John says.

In the spring of 2000, he and CamShopper.com cofounder Julie Spector chanced upon a late-night report on CNBC. A French department store was equipping its employees to skate around the floor with Webcams attached to their heads.

He wrote a business plan and started collecting names of potential investors. “I put together a long list of VC funds, from Accel to Benchmark to Greylock to Kleiner Perkins—all the big respectable funds,” he says.

For 10 days now, he has operated out of his hotel room, making phone calls to the firms on his short list, spending more than $2,000. He wanted to hand deliver the business plans to demonstrate his commitment—and see what the legendary Sand Hill Road is really like. “It’s beautiful,” he says of the undistinguished office buildings.

Like the entrepreneurs he’s read about, John isn’t deterred by rejection. After getting the brush-off from a VC’s receptionist, he returns to his rental car in the parking lot and psychs himself up for the next delivery. After dropping off the business plans, he checks out of room 2334 at the Hyatt Rickeys and flies home to Sarasota, Florida.

In summarizing the trip, John remembers the venture capitalists he spoke with on the phone as polite and encouraging. “They thought CamShopper was really interesting,” he says excitedly. “They were going to push it up in front of their pile. Their voices on the phone sounded genuine, so I believed them.”

Fall 2000: Nasdaq high 3,778.32
“Can you hear me?” “Hello?” “Can you hear me?” “What’s that? I can’t hear you!”

The four people standing outside the conference center, shouting into their cell phones, are in a pinch. They desperately need to call the office, but the Sierra Nevada mountains are in the way. Ironic, because they are at a conference devoted to “connectivity.”

They’ve come by Lexus, Land Rover, and limousine to Lake Tahoe, California, to pay homage to the most influential man of the technology age: George Gilder, host of the Telecosm conference.

For the layman—the used car salesman who subscribes to Forbes, or the high school econ teacher—Gilder’s most important asset is his claim to understand how CDMA, DRAM, RISC, FLAG, FTP, SONET, TDMA, XML—not to mention Gaussian noise, gamma rays, Java applets, thallium lamps, Token rings, wafer fabs, micromirror switches, phonons, fused silica, heterojunctions, lumeniferous ether, stimulated Raman shifting, Rents Rule, praseodymium, pump lasers, and time/space mollusks—actually work. This gives him an advantage not only over the average Joe but also over the thousands of secretly clueless brand managers, investment bankers, journalists, and venture capitalists working in Silicon Valley.

Just as important, Gilder has made a lot of people a lot of money. His newsletter subscriber base has jumped from 10,000 in late 1997 to 65,000 today. If each of Gilder’s subscribers is investing $10,000 in a Telecosm portfolio, then this former speechwriter for President Nixon now moves $650 million in the market. That’s nearly two-thirds of a billion dollars, all riding on what George uncovers in the boiler room where they keep the engineers who make the New Economy zoom.

Inside the lobby of the Squaw Creek Resort, where the number of cell phone holsters is higher than neckties, a tall, well-dressed older gentleman with sad eyes watches from a distance as the Gilderites move around a large stone monolith toward sessions on “The Storewidth Paradigm” and “Wireless Chips.” Gilder, wearing a black-and-white referee’s jersey over his blue dress shirt, sprints past, eating a banana and talking at the same time, on his way to moderate a luncheon discussion called “Cable Modems.”

As the afternoon’s seminars come to a close, three men and a woman linger outside of the Grand Sierra Ballroom to compare notes. “I don’t know about you guys, but I didn’t understand a thing in that last session,” says one man.

“We don’t really need to,” another replies. “What’s important is that Gilder’s book is in the top 10 on Amazon, and this will all keep going.”

The tall, well-dressed older man with the sad eyes heads for the lobby. He looks like Sumner Redstone, but what would he be doing here? So familiar, and those world-weary eyes look like they’d come in handy during high-stakes poker. Who is that guy?

Charles Keating turns to his companion, an attractive woman, and shakes his head. “Did you understand any of that?” he says.

December 2000:Nasdaq high 2,930.99
“James Brown!” calls out the black man in the tuxedo standing on the stage of San Francisco’s Warfield Theatre.

“JAMES BROWN!” shouts back the audience.

Suddenly, on stage, there he stands, in a dark performer’s suit and his famous pompadour.

The dot-com crowd is here, wearing basic black, Manolo Blahnik shoes, and Pashmina scarves. The music crowd is here, too, wearing feather coats, top hats, cowboy boots, and Levi’s jeans with Phish decals. And the suits, a half dozen, are present, mostly talking in the corner on tiny metallic cell phones.

Lots of “whassups” float around the room, mingling effortlessly with a cloud of exhaled cannabis. “I smell Chanel…I smell White Diamonds…And I smell Mary Jane wan-na,” rejoices James Brown into the microphone.

He arcs across the stage, his 16-piece band launching into “Living in America,” his four backup singers and one sex bomb acrobatic neo-Laugh In whirling dervish dancer all swinging to the beat.

James Brown has made a career of perfect timing. He knows when to fall to the floor, exhausted, and when to rise up again from under the death cloak. And he knows when to get the check for a party cohosted by an Internet company called Musicbank, which hasn’t opened its Web site yet.

A pretty young thing in line for the open bar turns to her friend and announces, “I just took a new job.” Her friend raises an eyebrow. “Yep,” the first girl admits, “a dot-com.”

Behind her, on the floor, a yellow balloon bounces from hand to extended hand through the pot smoke and colored flashing lights. Each time the balloon descends, it’s knocked higher by friendly hands. One, two, three times it bounces around the room. The sixth time, as it descends upon upraised hands, it explodes.

The music doesn’t miss a beat. People quit dancing and just jump up and down in place with their arms around each other’s shoulders. The floor shivers. On stage, James Brown swings his microphone stand out, then snaps it back. He bows from the waist as the red velvet curtain suddenly closes.

The shouting begins for an encore:

“JAMES BROWN!”

“JAMES BROWN!”

It spreads across the floor, past the bartenders, and upward to the proscenium and into the mezzanine. The floor crowd chants, the balcony chants.

“JAMES BROWN!”

But the Godfather of Soul is gone. For this crowd, the show is over.

“The idea has often occurred to me—as to what this superabundant emigration will eventually do. Some will no doubt make money at the mines—others at speculations of various kinds will amass wealth—but the great body of emigrants must inevitably be disappointed. What will become of them? A great many are already returning. The steamers are now as much crowded on their downward trips as they were formerly going up.” —Robert Effinger, 1849

**The below painting is called “Allegory of Fortune” and was painted by the Italian painter Dosso Dossi around 1530. If you look very carefully it’s possible to see that Fortune herself is sitting on a what? Why it’s a bubble, of course.

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