Promises Made to Pizza Kids

By Douglas Rushkoff. Published in The New York Times Syndicate/Guardian of London on 1 November 2000

Another month, another conference. This one, hosted by a respected Internet business consultancy firm, chose what has become the default theme for our once-booming industry’s events: what to do after the crash.

Perhaps predictably, the gathering degenerated into something of a blame game, with each panel and speaker choosing a new target for the assembled failed investors’ collective wrath. The people attending this conference, like most Internet investors, were latecomers. They had learned of the network’s existence a couple of years ago – after billions of dollars had already been made by earlier inventors and speculators. Having finally earned a spot on the bandwagon only to watch it fall off a cliff, these ladies and gentlemen were ready to lynch the bandleader. If they could just figure out who that was.

By late afternoon, one panel had come to an agreement. The culprits are those pimply twenty-something kids who work in makeshift studios over their garages, eating pizza and drinking Coke late into the night. “It’s those pizza kids who fooled the investors,” an Internet strategist agreed. “They didn’t care about your money at all. They just took it.”

We all know by now who they were referring to. The “neck-beard” independent programmers of Silicon Valley. Those obsessive young Internet enthusiasts and inventors, who toiled late into the night just for the fun of it. Kids who had bizarre visions of the way people might enjoy networking, and the energy to materialize these visions from concept to code. These same kids were delighted that some adults took interest in their activities, and gleefully accepted money in exchange for a piece of their fledgling projects (they didn’t even think of them as companies). They thought of it as a way to pay for a few more months of pizza, Coke, and video games to play while they worked. These were the same kids who, for the most part, failed to create sustainable revenue models for their self-interested benefactors.

But the angry panelists had their blame equation reversed. It wasn’t the pizza kids who fooled the investors – it was the investors who had fooled the pizza kids!

First off, what self-respecting businessperson would bet his money on a hacker? A hacker’s interest is in creating and expanding networks, not earning a fast buck. Hackers are almost never businesspeople, themselves. They are visionaries and explorers.

As the angry Internet strategist griped, “the pizza kids didn’t care about your money at all.” Of course not. They weren’t in it for the money. They were in it for the thrill of discovery. And discovery, for its own sake, doesn’t necessarily yield revenue.

But by greeting the investors into their over-the-garage offices and accepting their dollars, the pizza kids surrendered their spirit of adventure for a value system they just didn’t understand. It killed the fun, and dampened their ingenuity. Ideas that couldn’t be patented were no longer considered valuable. Extending the functionality of someone else’s products was deemed insanity. Results could only be measured in terms of revenue. Everything else was “burn.”

True, they didn’t know how to think in terms of sustainable revenue – but this was never their job. In the old days, when giant corporations had thriving “research and development” departments, crazy inventors were shielded from the harsh reality of a technology’s applicability in the marketplace. CEO’s with a long-range view knew that if even ten percent of their skunkworks and laboratory inventions could be brought to market someday, the R&D was well worth the effort.

The pizza kids, often living off day-jobs as IT office-workers or university computer instructors, served as the Internet’s real R&D department. The people who developed email did not earn a profit – though many companies are now making money off using it. The hackers who created the Web and the first browsers distributed their work as freeware – and an awful of a lot of revenue has been earned subsequently thanks to these inventions. Unfortunately, the latecomer investment community had no real understanding of how technologies trickle up to profitability, and turned to the pizza kids as if they were a commodity to be mined.

The pizza kids are not without blame. They believed the same hyped-up magazine articles that had fooled the investors – those stories of young millionaires who had cashed in their code for stock options and their over-the-garage offices for mansions in Redwood Hills. And they were so desperate for someone, anyone, to acknowledge their existence that they took the investor’s at their word.

Sorry, pizza kids. The investors didn’t really care about your projects at all. They never even understood what it was you were trying to do.