Analysis: Dead Streets of San Francisco ; Dot-Com Fever Had California Dreaming, Writes Leo Lewis, but It Must Now Adjust to the Hard Times
Lewis, Leo, The Independent (London, England)
Ignore the politically correct Californians wishing everyone "happy holidays". The trees are up, the coloured lights are on, Bing Crosby is playing in all the shops; it's definitely Christmas in San Francisco.
It is also the peak of the party season, which should be lavish if last year's efforts are anything to go by. But they're not; too much has changed since last year. The technology gold rush is over, dot-com companies are going out of business at the rate of three a week, and the $200,000 festive bashes are a thing of the past. Instead, the dismal digerati are polishing up their CVs and heading out to the many "pink-slip parties" that now dominate the Bay Area social calendar.
These are less than merry. Unlike the champagne-soaked evenings of December '99, the parties of 2000 are hard-headed networking events where you buy your own beer and pray for a job. The pink- slip parties, named after the US version of P45s, are the post- bubble translation of the First Tuesday events that used to put dot- com hopefuls in touch with venture capitalists. Now, the recently sacked internet employees wear pink stickers and flock round the handful of recruiters, who wear green ones.
The evenings, which were first held in New York last July, have had a particular resonance in San Francisco. So far this year 31,000 people have lost their jobs as more and more internet start-ups have spun into oblivion. To establish any credibility in Silicon Valley, however, you must still have a website, so the parties are arranged by the likes of sfhappyhour.com. For its first bash, the firm had expected about 50 people to turn up at the trendy Fuse bar in San Francisco's North Beach. A queue had formed round the block at 5pm.
Every night there are different networking parties to go to, many with downbeat titles. The Association of Internet Professionals holds meetings with names like "Inside the failed dot coms - how to identify and avoid them". Another group offers a "Party's over Party" - "in honour of the Nasdaq downturn".
Uninspiring though the new party fixture list is, attendees have little choice. Many of those who moved to San Francisco on the promise of dot- com millions bought into the hugely inflated housing market and have giant mortgages to stump up.
Meanwhile, the dot-com crash is starting to affect the rest of the Bay Area economy. The no-expense-spared shin-digs of yesteryear were big business for organisers and venues, but now they're feeling the pinch as Christmas parties are cancelled. The chic Exploratorium received three December cancellations from dot coms for parties that would have brought in six- figure sums. The Society for Internet Advancement, for example, pulled out when it lost over $100,000 of its sponsorship. Ask Jeeves, the troubled website that has just laid off 180 employees, will not be repeating last year's $200,000 City Hall gala bash.
But the party industry is just the tip of the iceberg because the San Francisco boom was built largely on the performance of the vast service economy stimulated by the internet. The San Francisco Chronicle tells the story of Roman Foldr, a 40-year-old entrepreneur who prospered from renting table football and pinball machines to dot-com start-ups. The games were once a badge of coolness for the trendy companies, but have swiftly become an expensive liability.
As increasing numbers of Mr Foldr's customers have gone bust, he now spends his day driving his van at full speed to repossess his property before it gets swallowed up in the messy processes of the bankruptcy courts. "When a dot com is folding," he says, "and they tell you to pick up your equipment, you better be there in half an hour. …