A decade ago, I remember reading a cryptic email from my colleagues in New York about “the attack.” I turned on CNN and saw a gaping hole in one of the World Trade Center towers.
I asked my wife to watch it, and then took my daughter to kindergarten. I dropped my child off, not letting on that something wasn’t right with the world. I had a feeling of dread. Then I returned home and watched the towers fall in real-time. Holy shit. My reaction was one of disbelief. Now I think about that day 10 years later, and how it changed everything, including the world of technology that has been the heartbeat of my life and work.
The fall of the twin towers left no doubt about the bursting of the dotcom bubble that began popping a year earlier. Many of us were working at places that were once candidates for initial public offerings. I was at the Red Herring magazine, where we held on to that now ridiculous illusion. After 9/11, we were all the walking dead. There was no more air supply for startups with big dreams and no profits. The acceptable business model became much more narrow in scope. If you were making money, you could survive. If you had raised money earlier, you could ride out the storm. But everything else vaporized.
“We lost a whole generation of startups,” Atiq Raza, then head of Raza Microelectronics, told me some years ago.
It was true. Nuclear winter took its toll in Silicon Valley. Venture capital dried up. IPOs disappeared. Things didn’t truly pick up again until 2004, three years later, when Google finally went public. The dotcoms that were on life support vanished. The paranoid survived. The scary thing was that it wasn’t clear how entrepreneurs would make a comeback.
The flow of billions upon billions of dollars in investment was altered by the attacks. This morning, the New York Times said that the estimated cost of 9/11 is $3.3 trillion for the U.S. alone. That was about $7 million for every $1 that Al Qaeda spent planning and executing the attacks. About $589 billion went into Homeland Security and time lost at airports alone is worth $100 billion. Just think of what could have been done with that money if it was invested in another way. Education, debt reduction, economic competitiveness, and research and development are still starved for dollars.
It took the vision of a relatively small group of people to recognize that the post 9/11 malaise was just part of a cycle, albeit a longer one where the depth of the crash was in proportion, or perhaps an overreaction, to the height of the dotcom bubble. It was easier to see the cycle if you were in a position to invest money.
Fortunately, eBay bought PayPal for $1.5 billion in mid-2002. That made the small group of investors known as the PayPal Mafia rich. In turn, they funded companies during the depth of the recession, noting that there was no better time to start a company. The Silicon Valley investors started putting money to work again. Greed trumped fear, and the upward cycle began. The prolific investors such as Reid Hoffman started companies such as LinkedIn and invested in upstarts such as Facebook. That led to the rise of Web 2.0, or companies that exploited the viral nature of web-based networkign, and a full scale recovery.
This rapid rise and fall became an object lesson as the Great Recession gripped the country after the housing bubble collapsed and the banking industry brought the world to the brink again in late 2008. As soon as the economic malaise took hold, the optimists of Silicon Valley began predicting a recovery. They continued to invest in new companies, accelerating the recovery and shortening what could have been another devastating cycle for Silicon Valley.
This is not to say that boom-and-bust cycles, like the one triggered by 9/11, are a good thing. It just takes some vision to see that the world isn’t coming to an end, and that its renewal will all begin again. As important as it is to remember that day, we are lucky that many people went on with their lives, taking their kids to kindergarten, and acting as if 9/11 were just another day.
An era of limitations
My children grew up in a much different era than the one that existed before 9/11. We are now in a world where the villains of video games have shifted from the old enemy to the new. We can fight virtual terrorists in Iraq and Afghanistan, while a very small percentage of us actually go to war and experience the real thing. In this new age, we don’t think about our unfettered rights to privacy. We make trade offs. Tracking technology doesn’t seem like such a bad idea anymore. Getting on a plane means we’ll submit to searches and scanning.
It is a world with fear and worry. When you design something new, or create a new company, or conceive a new game, there are some real limitations to your dreams. It is almost as if you have to consider that something would come along at some point and wreck the party. The slope of the growth curve couldn’t be just upward and to the right.The risk factors now include the distinct possibility that somebody could blow something up and bring it all crashing down.If 9/11 has brought us down in this way, by limiting our imagination, then its toll is truly unimaginable.
I worry that 9/11 took away some of our unabashed and innocent imagination to create something new. If that’s true, then all I can say is what a horrible blow. But I know that can’t be completely true because I still see new companies getting off the ground every day. In the past decade, we have seen an acceleration in innovation.
Some of these ideas are truly silly, but the entrepreneurs behind them don’t seem to care or realize it. Entrepreneurs can still be fearless. What I admire about them these days is that they know all of the things that could go wrong.The possibility space for failure is much broader, yet they soldier on. Perhaps they just forget about the obstacles. They push aside negatives and move forward.
These people who can still create without fear. I would like my children to pay attention to them. Yes, 9/11 reminded us of how dangerous the world can be. But the job of our entrepreneurs, and our children, is to let their imaginations run wild. As Bob Noyce, the co-founder of Intel, once said, “Go out and do something wonderful.”
I pondered what I could write on this day. I thought about writing nothing. But it turns out that I couldn’t let this day pass without mentioning the 9/11 attacks. Because it changed everything about my world, and yours. But don’t let the world stand in your way.