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A financial wreck can't keep good Web developers down

Far from Wall Street, attendees of London's Future of Web Apps conference aren't panicking about the economy. Is it entrepreneur's pluck or old-fashioned naivete?

LONDON-- Britain's normally gray capital was unusually sunny this week. So were the attitudes of Web developers gathered here for a conference while, across the pond, Wall Street was in full panic mode.

A bright-eyed pack of several hundred aspiring Web visionaries descended upon London's Excel conference center for the semi-annual Future of Web Apps (FOWA) conference. Eager developers trawled the show floor's booths for stickers that they promptly stamped onto their (overwhelmingly Apple-manufactured) laptops. One pack of young men strolled around in straw sombreros. Another trio passed some time in between lectures by tossing around a Frisbee with the Yahoo Developers Network logo on it.

FOWA image

There was only off-hand talk about the global economic crisis that was also unfolding, in part, just a few train stops away in London's financial district. But people walking these halls all share a fervent belief in the power of their own ideas: Innovation cannot and will not stop, financial crisis be damned.

"A lot of people have asked (whether) the recession will impact certain things. I think the answer is probably that a major recession will impact everyone in some way, but traditionally I think some of the best companies have been built in down economic times," Facebook founder and entrepreneurial icon Mark Zuckerberg said in his keynote address on Friday evening. "If what you're providing is value to the end users...that lasts."

This wasn't some cloistered retreat of idealists. While FOWA is a small conference compared to bigger confabs like the Web 2.0 Expo or Demo, it pulls in big tech sponsors: AOL, Microsoft, Facebook, MySpace, Adobe, Sun Microsystems, all of whom want to reach FOWA's audience of young Web developers. Last year, the tech world went wild over Web platforms--packages of code released to companies and developers so that they could build their own widgets and applications to run on social networks like Facebook and MySpace. Now the industry has seen the platform craze extend to mobile phone software, like the iPhone, and new development platforms for downloadable desktop software, like Adobe Air and Microsoft Silverlight.

If you looked at the conference's array of sponsor booths, you'd think the tech economy was booming like it was in 2006. AOL was handing out pamphlets about developing on properties like social network Bebo and widget-maker Goowy; Sun Microsystems advertised its "Startup Essentials" program with, somewhat incongruously, a mechanical surfboard. Perhaps the biggest piece of showmanship came from MySpace, which hawked its U.K. developer program with one of London's iconic double-decker buses parked on the show floor, covered in MySpace regalia and playing nightclub-worthy electronica from a set of D.J.-style turntables inside.

That's not to say reality wasn't an uninvited guest to the festivities.

None of the big companies on the FOWA show floor seemed to be looking to actually hire new developer talent. A representative at Microsoft's booth, speaking to me over the din of the Guitar Hero stations that the company had set up, said he doubted anyone was hiring and estimated that the market for developer talent in London had probably dropped by five or six percent. A representative at AOL's booth wasn't sure if the company was hiring or not, but said they were really only there to drum up interest in properties like Goowy and Truveo among the developer community.

Entrepreneur or employee?
But it's unlikely that developers were concerned by the lack of employment opportunities; a job at AOL or Microsoft, or even Google, isn't what today's Web kids want anyway. That's not surprising, considering most of them belong to a digital generation that has been characterized by entrepreneurial self-promotion.

Inspired by people like Zuckerberg and Digg founder Kevin Rose, who also spoke at FOWA, and encouraged by how inexpensive it is to build on the Web these days, they see the recent wave of Web innovation as self-propelled. If you can't found a company because the venture capitalists are getting picky, at least build an iPhone app. Who cares if Adobe's not hiring?

Kevin Rose
Kevin Rose: "A lot of the advice going out there to start-ups right now is to pare back a little bit and get into a mode that you can survive in." Caroline McCarthy/CNET News

But then, there's that pesky "reality" thing again. Many of the developers, as well as designers and consultants also present at the show, spent the Web 2.0 boom swimming in lucrative freelance contracts, and a few admitted that they're now doing the unthinkable and searching for full-time employment. "From the freelance perspective, things are tough," said Suw Charman-Anderson, a London-based consultant who has been a freelancer for ten years. "If someone offered me a job, I'd have to think seriously about it...It's been a very quiet summer for me, and the (client) interest I'm getting now, I'm getting interest from India. Their economy seems to be a bit more robust."

A few companies with executives at FOWA were interested in hiring developer talent. Those companies tended to be independent but established companies that had either a stable revenue stream or a healthy cushion of venture capital to last through difficult times--and often, they are run by the very same people who subscribe to the idea that innovation can live through, and even thrive in financial disaster.

"Companies are seeing that they really need a Web presence and so many have embranced blogs for that," said David Recordon, head of open platforms at Six Apart. "I don't think that's something that businesses will neccessarily cut if money's becoming tight."

Digg's Rose proudly announced in his address to FOWA's attendees on Thursday morning that his company is hiring new engineering talent. But in an interview with CNET News later that day, Rose said everything is tougher now, from finding investors to easily affording company expenses.

"Start-ups that don't have traction and don't have that kind of hockey-stick-like growth on Alexa or Compete or whatever are going to have a really difficult time raising an additional round of funding," Rose said in the interview. "I think that a lot of the advice going out there to start-ups right now is to pare back a little bit and get into a mode that you can survive in." Frugality has always been crucial to Digg, said Rose, who had worked at several start-ups during the dot-com boom.

Survival of the fittest
Recordon and Rose, in their belief that sound business practices and useful services will survive, sum up the general of the freewheeling, free-thinking world of Web developers, where there's a heavy temptation to put a positive spin on the financial crisis. Their reasoning? Starting a business and making it last is always hard, and when a bull market flush with venture cash makes it easy, that's not a good thing. Many at FOWA argued that even in the best of times, the culture of Web 2.0 development should be a sort of Darwinism, albeit a very happy Darwinism covered in stickers with the logos of Bay Area geek brands like Flickr, Digg, and Laughing Squid.

"Starting a company is hard. Period. Exclamation point," said Michael Galpert, founder of a New York-based image-editing start-up called Aviary, in a talk about how to build a company outside Silicon Valley.

Mark Zuckerberg and Ryan Carson
Mark Zuckerberg (right): "Some of the best companies have been built in down economic times." Caroline McCarthy/CNET News

He's right. It's a risky industry. In a city like London or New York, especially, many of these bright young developers and engineers likely turned down then-lucrative jobs in the financial sector in order to pursue the more volatile path of entrepreneurship or freelancing. They are already living lifestyles that many of their peers would deem excruciatingly difficult.

"I don't believe in good work, I believe in excellent work at a start-up company," Mahalo founder Jason Calacanis said in a talk about "entrepreneurial insanity" on Friday. "Start-ups are like the Tour de France or the Olympics, but in any team sport if somebody's not pulling their weight, they pull the whole team down."

Conference host and consultant Simon Wardley reminded the audience at a talk about innovation that this industry is never easy and that uncertainty is a perpetual hallmark. When you come up with a novel idea, it won't be novel for long.

"By the time we have all the information necessary to make a perfect decision, that decision is generally worthless," Wardley said. "Opportunities need to be seized."

And entrepreneur-turned-investor Julie Meyer of Ariadne evoked a quotation from Sir John Templeton that says to "invest at the point of maximum pessimism." Encouraging entrepreneurs to get venture rounds completed and to use the cash wisely, Meyer said, "Entrepreneurs are always investing at the point of maximum pessimism. That's what they know how to do best."

This is where the Darwin effect comes into play, as some entrepreneurs readily compare the current financial crisis to the original dot-com bust in a good way--that it might have a positive effect on the industry by separating quality start-ups and ideas from a long, candy-colored, vowel-free parade of Web 2.0 silliness. Being part of the business had become almost too easy, a fact easily illustrated by the loads of goofy widgets that flooded Facebook's developer platform and soon generated a vocal backlash.

Google engineer Kevin Marks, who helped build the OpenSocial platform, pointed out that the lean years of 2001-2002 brought forth many of the start-ups that have proven to be both innovators and powerful market forces in the past half-decade. "If you look at when the dot-com bubble burst, a lot of the companies that are speaking (at the conference) today grew out of that," Marks said. "What you tend to get in the quieter times is people coming up with these things...Flickr is a great example."

But here's the problem with this crisis-be-damned idealism: it will not always play out as well as every optimistic developer hopes. Many of the ambitious young techies who are convinced that they have the wherewithal to make it through the financial crisis are going to be in for a nasty surprise. That VC pitch spree might come up fruitless. That social-advertising-based business model might not turn a profit.

"There is not and cannot be a simple method (to innovation)," Simon Wardley said in his talk. Nor is steering a company, or even a great idea, through the worst economic conditions since the Great Depression.

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