Busting the Lycos Myth

Richard Florida built an academic career and then a lucrative consulting career on the observation distilled in the lead of this recent Business Week profile:
In 1994, Carnegie Mellon University professor Richard Florida was paging through a newspaper when a headline triggered what he calls a "holy moly" moment. Lycos, a search-engine company spun out of CMU, announced it was moving from Pittsburgh to Boston. When Florida asked why, colleagues told him that "Boston offered the lifestyle options that made it easier for Lycos to attract top creative and entrepreneurial talent," he recalls.

Holy moly indeed, Batman! More than a decade later, Professor Florida is still enjoying the sunshine. But shouldn't the anecdote get some critical examination? I've heard this from lots of people in Pittsburgh with connections to CMU and the tech sector: Lycos didn't leave Pittsburgh because it lacked access to talent (in fact, initially, Lycos even left a presence here). Lycos went where the money was -- and is. (Trivia question: Where is Lycos today?) Lycos's leaving wasn't a bad thing for Pittsburgh. In fact, the Lycos deal was a big success for CMU and for Pittsburgh, as well as for its founders. That case has been made publicly before, but it doesn't stick, and when I hear it in conversations, most people are reluctant to talk about it publicly. Why is that?

It seems to me that the research that the observation generated is interesting -- but hardly conclusive. What Rich Florida found was a correlation between his defintion of the "creative class" and certain indicators of economic success. What's hard to pin down is the direction of the causal arrow -- if there's any causal arrow at work at all.

Here's an example of what I mean: The best-known concentration of technology companies in the United States is in the Silicon Valley, which stretches (roughly) from Menlo Park to Morgan Hill. How does that region do, anecdotally, on measures of "creativity"? For technological creativity, it may have no peer. For other "cultural" creativity, until very recently, and until long after the Valley became "the Valley," it was a wasteland. (I'd be happy to swap stories of downtown San Jose in the mid-1980s.) The Valley took off, IMHO, because Stanford aggressively pushed its research into the private sector; because the Santa Clara Valley (as Silicon Valley was once known) had a decades-long tradition of Defense Department-sponsored industrial R&D that spun engineers outward as the DoD gravy train dried up; and because the longtime San Francisco banking community realized that the mid-Peninsula is a pleasant place to work as well as to live. The tech community flourished because the money was there, in Menlo Park, to finance the revolution. It didn't hurt that Menlo Park was the original home of the Grateful Dead and Ken Kesey's experiments with LSD, but the "creative class" element was always highly marginalized. There was one head shop in Menlo Park in the late 1960s and into the 1970s; in all other respects, the Valley of that era would make modern Mt. Lebanon look like a den of iniquity. The other relevant anecdote, it seems to me, is that Boston -- which allegedly stole Lycos from Pittsburgh based on superior access to "creativity" -- was seen in the 1990s as hopelessly out of it in battles for technology-based economic development. Silicon Valley was the model, not Boston.

That's an anecdote, not research. I hypothesize that the Silicon Valley lacked a deep "creative class," yet that region did okay for itself. If that area is better known today on "creativity" metrics, as I suspect it is, then that "creativity" may have followed economic growth.

There are lots of people with opinions about the Valley. Have a conversation -- at my expense, if you like -- about whether my hypothesis is right. Can Pittsburgh have a similarly honest discussion about whether Lycos matters, and if so, how?

Comments

35 Responses to "Busting the Lycos Myth"

globalburgh said... 8/07/2006 4:08 PM

Pittsburgh obsesses who and what leaves too much to have an honest discussion about whether Lycos matters. Richard Florida feeds the obsession. The question isn’t, “Why did Lycos leave?” The question is, “Why did Pittsburgh fail to attract a Lycos?” Businesses and people leave every region for a variety of reasons. Let them go. They’ll go regardless of any consultation that Dr. Florida might provide.

Slackers journeyed to Austin in droves during the early 1990s. Most of them have since long moved on. The “Creative Class” is highly mobile. There is no reason to think that once you have attracted them, they will stay. Trying to make them stay is a fool’s errand.

I hypothesize that Lycos relocated to Boston thanks to someone (with gravity behind the scenes) who was intimate with that region. Assuming that the actor in question (Lycos) could move anywhere, Dr. Florida would tell me that Boston had the greatest pull factor of any place in the United States?

Dr. Florida wasn’t explaining the pull factor. He was describing the push factor.

Anonymous said... 8/07/2006 6:27 PM

I have such mixed feelings about Richard Florida's work. I have serious objections to his methodology. (Seems like you have concerns, too.) However, I do think that his work (and his endless self-promotion) produces positive conversations about how one enhances or promotes regional resources in an economy that heavily depends upon knowledge, creativity, and innovation.

Are you familiar with the writings of Sir Peter Hall (Cities and Civilization)? He separates cities known for creative culture from cities known for technological innovation. I think it's an interesting distinction. I also had to chuckle at Hall's observation that truly creative cities of the past have had turmoil and conflict. (Think Berlin!) Who knows, maybe all of the city hall drama will have an up side?

Mark Rauterkus said... 8/07/2006 7:02 PM

Why worry much about a melted ice cream cone (mind candy) of past years?

And, Dr. Florida isn't just in the sun. Many have pounded on him and those concepts. Why pile on now?

I think the real questions are yet to be asked...

To thrive -- should be the goal.

To thrive, one needs to stay. One needs roots.

The 'creative class' did turn the 'class war' discussion on its edge. It wasn't about the upper class vs. the lower class then. It isn't the elites vs the bus boys.

The holy grail -- how about 'class less.' Performance metrics matter.

globalburgh said... 8/07/2006 8:27 PM

To thrive, one needs to stay?

Please elaborate.

Anonymous said... 8/07/2006 10:26 PM

The defense related workforce converts to the tech economy much better than steel workers.

Anonymous said... 8/07/2006 10:29 PM

Richard Florida has some interesting analysis, but no implementation.

Anonymous said... 8/08/2006 12:19 AM

I have to disagree. While Lycos was a good thing for Pittsburgh, Lycos' leaving was definitely a bad thing for Pittsburgh. The region would have been much better off with full operations here, not technical operations, which they eventually moved to Boston as well.

Lycos went to Boston for 2 reasons - their primary provider of risk capital, CMGI, wanted it close by and the business people in Boston do not believe that Pittsburgh had the executive, marketing and sales talent that was needed to grow a company rapidly from the stage it was in. Plus, Pittsburgh is simply not a place for creating the buzz that is critical to rapid growth of innovations. Other Pittsburgh tech startups including BeFree and Industry.Net were moved to Boston for the same reasons.

If Pittsburgh had the risk capital AND the non-technical talent, Lycos could have stayed and had a much greater positive impact on this region. This was a missed opportunity for Pgh. If the region can spend hundreds of millions to keep a baseball team, certainly it can do a lot more to keep a high growth, wealth-creating company with a consumer face.

BTW, the word on the street was that Lycos was not a big financial success for CMU.

C. Briem said... 8/08/2006 12:01 PM

It's no secret that some thought Lycos would be a bigger cash cow. CMU did realize ~$25mil which is a lot more than many ventures return. Remember, it was NSF money as well that seeded Lycos early on.

If they had then invested that amount in Google.. there would be something. There is a little irony in that dollar amount. Contrast it to Google's Press Release #1:

http://www.google.com/press/pressrel/pressrelease1.html

Stanford clearly will have a big windfall in the end from Google.. but that's not a fair comparison in and of itself.

Anonymous said... 8/08/2006 4:19 PM

I disagree with the comment on roots - Northern California is filled with people who don't have roots there, but moved there for a job, and will in the end put down new roots there.

The focus of this conversation should be, if Lycos were born today - would it meet the same fate. Yes, there is more local venture capital that could be tapped to keep it growing in Pittsburgh. But I think its an uphill climb. Many companies require multiple rounds of financing over many years with many different levels of VCs. The VC depth in Pittsburgh is probably still an issue. The best hope is really that a bunch of bets are made by what VC is in Pittsburgh, and a few take off quickly enough and with enough pull, that they can remain in the city and begin to create a self-feeding ecosystem for start-ups.
The other point is in regards to management talent. I'm skeptical there is much improvement on this dimension.

O said... 8/08/2006 5:58 PM

[Sniff] Is that custard I smell, Mike?

Mike Madison said... 8/08/2006 10:40 PM

Ah! The blogosphere has a memory! Well, no, I don't think that the post is "the custard class strikes back," because I'm agnostic as to whether or not Pittsburgh has the creative cojones that Richard Florida missed. Pittsburgh may well have ample creativity, but all that creativity won't raise Pittsburgh up (if Pittsburgh needs raising up) on its own. My point, or rather my hypothesis, is that the creative class doesn't matter, or at least it doesn't matter nearly as much as the Florida hypothesis holds that it does.

Anyway, I'm through searching for custard. Now I'd like to find some authentic Italian gelato.

Judge Rufus Peckham said... 8/08/2006 11:08 PM

Sorry, Professor. Once you've had gelato in Italy, nothing here compares.

Anonymous said... 8/09/2006 12:40 AM

The comment above about whether the same fate would be met if another Lycos was born today is RIGHT ON! Can you imagine if we did have the next Google or Microsoft and lost it?! That would be a shame on all of us.

Looking back at Lycos is useful if only we learn from it and take appropriate actions. Waiting for anything to happen - such as waiting for a mature and deep VC level and waiting for a deep, experienced bench of management talent is NOT a solution. If the region was able to swarm around the "next-Lycos" by pulling its best resources, assets, and connections together, that company might have a chance to make it from here. With the region awash with grant capital and "studying" experience, it's time to channel these on having a swarming plan that is ready-to-go into action before it's too late. It can be done.

John Morris said... 8/09/2006 12:46 AM

This is a complex subject, to say the least. There were two major synergies at work that helped to create the "valley" In the early days the big government contactors tied to defence stuff was very important. At that time land was also cheap and you had that conection to Stanford etc...

But imagine for a moment -- Silicon Valley without San Francisco nearby and without all that intense physical beauty. The first phase in the 40's-- early 70's it was about government work/top down economies of scale. But then as costs rose and the pace of inovation rose then the dynamic connection to San Francisco mattered more and more.

I think that's when you had people who said I want to start a company here partly cause i love it here. Hipie-Sanfrancisco and the pure geek valley dance together.

John Morris said... 8/09/2006 9:51 AM

I read the book and quite a ways back and as i remember it he didn't draw the kind of line that you have between technological inovation/creativity and other creativity that you are making here.

This is a very important thing-- this stuff is blurring together a lot and drawing a line is just so dumb. I don't think that his point was that things like the valley happened because there were a few good resauraunts around.He was talking about being in an area that embraces change and diversity vs being in a place that doesn't more than anything else.

Mike Madison said... 8/09/2006 10:09 AM

From Richard Florida's website:
"Just as William Whyte's 1956 classic The Organization Man showed how the organizational ethos of that age permeated every aspect of life, Florida describes a society in which the creative ethos is increasingly dominant. Millions of us are beginning to work and live much as creative types like artists and scientists always have - with the result that our values and tastes, our personal relationships, our choices of where to live, and even our sense and use of time are changing. Leading the shift are the nearly 38 million Americans in many diverse fields who create for a living — the Creative Class."
Also read Florida's own summary of his "creative class" argument in the Washington Monthly in 2002.

Anonymous said... 8/09/2006 11:57 AM

As a local investor in start ups it is very hard to identify the next google.

The big challenge for Pittsburgh is deal flow. We need more investment opportunities to attract VC. At the end of the day it is a numbers game.

John Morris said... 8/09/2006 1:09 PM

While i am not an expert at all, i do have a lot of friends in the region and i can tell you that if someone took out San Francisco they would take out the valley with it.

The ideal there is always if can afford to to live in the city and then commute out to the valley to work. Also a lot of the meetings are done in the city.

I think that you have to separate the Valley in The "corporate" IBM age into the apple age and then the total creative free for all of today.

Mike Madison said... 8/09/2006 2:26 PM

I grew up in Menlo Park, went to law school in Palo Alto, and practiced law both in San Francisco and in Palo Alto for a long time. Until the early 1990s, San Francisco and the Silicon Valley were essentially two separate economic and cultural universes. Even then, the rapprochement was tentative and gradual. The idea that it is cool to live in Noe Valley and commute to Mountain View is a phenomenon that is only a little more than a decade old. In other words, geographic and cultural re-integration of San Francisco and Palo Alto followed the rise of "Silicon" Valley by roughly a decade. I say "re"-integration because, of course, Menlo Park and Palo Alto were founded as vacation communities for San Francisco bankers and railroad tycoons, and later evolved into bedroom communities for SF lawyers and bankers. My father commuted to SF for many years on the old SP (that's "Southern Pacific"), the predecessor to what is now known as "CalTrain."

John Morris said... 8/09/2006 5:40 PM

Well, I have to admit that i don't have that kind of first hand knowledge. I was for a while pretty obssessed with this stuff and reading profiles of the wiz kid types and a lot of them seemed to say that they liked the location cause they liked to surf or see the greatfull dead or whatever.

I think that pulling an exact date is really hard but over time they flowed together and it's that synergy that made things work.

stuff like Lucas Film/ Star wars wasn't that in the bay area a bit further back and merging the tech guys and the other creatives.

I think that what happens is that you have an evolution from one thing into another thing and you are trying to pull it apart. It's like trying to find the start of the punk scene in NY. It was going on and being born well before it reached wide public awareness.

Figuring that traffic back the was likely not a big issue, these places were really close and you would just have to figure that the flower power era impact on the culture of the whole region was just huge.

Mark Rauterkus said... 8/09/2006 6:36 PM

Woops. This thread skipped along. As to the call way at the top...

"To thrive, one needs to stay?"

"Please elaborate."

My performance metric is about getting the region "to thrive." (or to thrive again) I don't want Lycos just to have a consumer brand buzz darling. I want to have a region that thrives -- and that might include the potential of a number of Fortune 500 companies -- and many other start-ups, etc.

To thrive, we can't be a revolving door. The region can't really deliver propsperity if it only does 'tech development' and not marketing, or finance, or whatever.

The region can't hitch a wagon to only healthcare, or only education, or only NIH research.

A jungle has diversity, rich eco density -- like a rain forest, right. We have to take care of all age groups, all income levels, all classes (or have none), and all neighborhoods -- so opportunity can ooze from every immagination and performer.

So, to elaborate on my shorthanded statement above, ... For the region to thrive, the economy (business environment) has to have all the bases covered. We need assets in all the realms within our reach. In sports speak, the team that we field as a region needs to have players for all the roles and all the necessary positions.

By the way, the STEELERS have done okay without the need to ever field a cheerleading squad. Cheerleaders are not necessary for a winning team.

Meanwhile, doctors need nurses, administrators, rehab specialists, facilities and patients -- plus a marketplace that pays its bills on time and doesn't cost an arm nor a leg for malpractice insurance.

The Steelers can't carry six QBs and say screw the defensive linemen positions.

I'm saying, I have an appreciation for the diversity of work that needs to be accomplished -- and -- we all have to be part of the puzzle in all sorts of roles. And, a region that puts everyone into the game in helpful ways -- call that bench strength. That's the ticket for the region to thrive in the long run.

Or, put another way, ONE key player isn't going to make or break a region.

In the huddles of life, we all can't be the one calling the plays.

So, when you are "more creative" you'd be able to be a change agent and slip into other roles -- wear different hats at different times or in different situations. Fine. Slash and #86 were exciting to watch. But, the roots of the problem for our region resides within in our lack of depth in the farm system -- HOME GROWN. We don't have diversity of strengths as an asset. (i.e., I agree the region is really thin in terms of senior, middle management who can lead risk-content-creative ventures N@.

:)

Mike Madison said... 8/09/2006 9:11 PM

A final thought on John M.'s last comment:

Well, um, no. John Markoff's book "What the Doormouse Said" makes a cultural connection between the Deadhead culture and the development of the PC, but he's pretty clear that he's not talking about "flower power in the air." Geography is important: The Valley, like Markoff's book, deals in proximity. The PC people were friends and neighbors of one another and of some of the leftover counterculture folks. The early networking people literally worked in the same neighborhood where the Dead played some of their earliest small shows.

Traffic wasn't the big deal in the 1960s and 1970s that it became in the 1980s and 1990s, but that doesn't mean that everyone in the Bay Area was driving everywhere; in fact, the contrary tended to be true. It was sort of like Pittsburgh: If you lived on the Mid-Peninsula, you ventured into San Francisco for your job (maybe) or for that special night out, but you otherwise stayed put, and you never went to the East Bay or the South Bay. Same if you lived in the East Bay, and if you lived in the South Bay. This is one of the reasons why Stanford and UC Berkeley, until relatively recently, occupied completely different cultural niches in the Bay Area, and why Stanford people were largely ignorant of how Berkeley people lived, and vice versa. (I grew up in a Stanford family, and it was a pleasant revelation to live in the shadow of Berkeley for a decade.) It also explains why San Francisco and San Jose, only 50 miles apart, were so long at opposite ends of the economic development spectrum -- San Francisco was the banking center of the West; San Jose was an agricultural center. Frankly, one of the big reasons why this changed over the last 10 years is the real estate market: It got so expensive to live in the Valley itself that increasing numbers of people started living in the East Bay -- including Oakland and even Berkeley -- and commuting to Mountain View and Cupertino. I was one of them. Other people lived way to the south (Gilroy and Morgan Hill) and to the east (Livermore, Stockton) and commuted in.

George Lucas and ILM make the point even more clearly: ILM was founded in the late 1970s, up in Marin County, which is on the far side of the Golden Gate Bridge from Palo Alto and therefore far enough away, for all intents and purposes, to be in a foreign country. Real estate development up the 101 corridor to Santa Rosa and beyond changed some of this, making it feasible for some software companies to set up HQs there, beginning in the 1990s, but again, SV got off the ground long before, and ILM was and largely is its own moviemaking enclave.

The impulse to connect cultural openness in San Francisco in the 1960s with technological and economic opennness in the Silicon Valley in the 1970s and 1980s is almost overwhelming, but I just think that there isn't much there -- beyond the not very novel or useful point that the California coast has always been a haven for newcomers wanting to try new things. Gold Rush, anyone? But I don't think that there are many lessons there for Pittsburgh, beyond the obvious and cliche --"Pittsburgh" would probably be better off if its various populations were more tolerant of risk and failure.

Amos_thePokerCat said... 8/09/2006 11:25 PM

The only place with real gelato in PIT. Their ices are pretty good too.

Joe Zeppi’s Frozen Treats
915 Mt. Royal Boulevard

However, you can not find frozen custard in PIT.

Amos_thePokerCat said... 8/10/2006 12:58 AM

Does anyone know *any* other high profile startup that was moved a from city to city? No matter what the reason (and what I heard *at* *the* *time* (i.e. BF, before Florida) from generic PIT working software runts was there was a hiring problem), the fact was that Lycos was moved.

Company leaves town, people rationalize it as a good thing. Only in PIT.

Mike Madison said... 8/10/2006 10:17 AM

Clever, Amos, but misleading. You know as well as anyone how the startup economy works. Companies come, companies go; companies stay, companies move. No one is celebrating the fact that Lycos left; they're understanding how this system works. Companies follow the money (not the software "runts," who are usually fungible or movable or both). Happens all the time. What made Lycos special? And what would have happened differently in Pittsburgh if Lycos hadn't moved to Waltham?

Amos_thePokerCat said... 8/10/2006 2:13 PM

Typo, I meant "grunts" like Army grunts, not like the New England desert grunt, nor like Willie Wonka candy runts.

I know a little about start ups from the view in the trenchs. I have worked for 2 places that were listed 3 times in total on INC's 500 Fastest Private companies over the years. As well as having gigs at Qwest, Level-3, and Dish Network. And having one buddy of mine actually make a couple $M when his little Boulder based email company got bought out by SoftBank.

You are being clever also Mike by not answering my question. Name one other high profile startup that left and moved hundreds of people from its founding city? Maybe Netscape if you count the brief period while the commercial venture was organzing the spinoff from the Univercity, but that was only a handfull of people. Microsoft when it went from NM back to Seattle? I think they were also very small at the time. Since their claim to fame at the time was a papertape basic, I would hardly call them high profile.

Sure companies boom and bust. They rarely pick up their tentstakes and leave.

Mike Madison said... 8/10/2006 5:00 PM

I'm still missing the point of the "high profile" qualifier. Lycos was "high profile" in the minds of some Pittsburghers, I guess, and it had a high profile in early e-commerce circles for a very brief time in the mid-1990s, but that's about it. And I doubt that the relo had anything to do with its fall from grace. In other words, there's no reason to suspect that Lycos would be bigger or better today if it hadn't moved to Waltham.

Still, if you insist, here's an example of a tech company that just up and vacated: Gateway, which moved from North Sioux City to San Diego in the late 1990s (and left San Diego for Irvine in 2004!), and in the process did far more harm by abandoning Sioux City -- another place I happened to live, once upon a time -- than Lycos ever did by leaving Pittsburgh. Gateway, of course, was no mere startup when it left, but it was still a pretty young company -- only a couple of years removed from its IPO, I think. Of course, not many startups employ "hundreds" of people, and not many people actually moved to San Diego. But how many people did Lycos employ at the time of the move? How many were asked to move? How many in fact went? But Gateway is easily a "higher profile" company, both then and now, than Lycos.

C. Briem said... 8/10/2006 5:26 PM

Lets help mike out a bit here… Amos, companies sure do move all the time. I am sure if I put my mind to it I could come up with a list in the hundreds.. but you ask for one. How about PlanetRX which at one point people thought was going to be the Amazon of prescription drugs. It picked up and moved from CA to Memphis (which I am coincidentally waiting to board a flight to at this moment… which jogged my memory). Both PlanetRX and Lycos would have similarly illustrious futures (not!) post-move.

And I will check this when I get back, but I don’t think the Lycos move added up to hundreds (as in plural) of jobs. The period of peak employment at Lycos was very brief and was mostly the result of the dot.com meltdown and resulting consolidation of firms.. not because of organic growth within Lycos.

per the news item globalburg commented on in the follow up blog post here.. Lycos is down to 140 employees in Boston area. So one answer to the question of what would have been different if Lycos had stayed... well, the counterfactual is we would have had a lot more software sector layoffs here.

Amos_thePokerCat said... 8/10/2006 6:26 PM

Gateway and PlanetRX are excellent examples. I still beleive that it is the exception rather than the rule that a company will pull up stakes and move.

By "High Profile" meaning something that the company was referenced in the national business press (NYT, WSJ) a couple of times before moving. That a company had reach some minimal level of national notoriety. NYT current has 393 matches for articles with the Lycos. Not all are about the company Lycos, but most are. Lycos did hit the $1B mark on paper only a couple of years after starting up.

The PG did an article on Be Free. They were split between BOS (sales, marketing) and PIT (tech). They planned on almost 100 people just in PIT in two floors of office space after just 16 months. They are, of course, out of business now. The domain name points to a different company that has no office in PIT.

As for all the people numbers for Lycos, so far, I can find nothing on PG about that.

If you want more trivia, what was the nickname of the Lycos' CMU founder? He had a combo robot battle stadium, and supper club out on Rt 30 by North Huntingdon called the Robot Club and Grille.

Amos_thePokerCat said... 8/10/2006 7:32 PM

From the PIT Biz Times, February 5, 1999 Weary of logistics woes, Lycos seeks to consolidate its local operations:

"Currently, nine employees work from the Westin William Penn at 555 Grant St.; 35 work at the company's offices in Oxford Centre at 301 Grant St.; and 49 work out of 5001 Centre Ave. in Oakland, the former headquarters of WiseWire, which Lycos purchased in April 1998. The three sites add up to about 24,000 square feet of space."

If my old "new Math" skills do not betray me, that adds up to 93.

"Lycos is the third-most visited hub ..."

That was 1999.

"Though Mr. Guilfoile said occasionally a Pittsburgh employee is asked to relocate to Lycos' headquarters, he denied rumors that any of its operations are leaving town."


And another Before Florida article, Better in Boston?
Boston has claimed several local high-tech companies and many of the region's entrepreneurs. What's the lesson in this for Pittsburgh?
:

" In the last two years, three companies with Pittsburgh roots set up shop in Boston.

Internet Securities Inc. went for the money. Industry.net went because of the people. And Lycos Inc. incorporated in Boston because it couldn't find the money or people to do so here. "

Mike Madison said... 8/10/2006 8:33 PM

I got a little laugh out of the cite to the BF article from the Business Times. In 1998, allegedly Boston had its act so together that it was the model for Pittsburgh to emulate. Less than two years before, though, Boston's tech economy was so stagnant that it was the model for what *not* to do in Annalee Saxenian's landmark study, Regional Advantage. Dramatic turnaround in an unbelievably short time? Or a case of Pittsburgh thinking that the grass is always greener? Personally, I'll take research by Saxenian (now Dean of the School of Information at UC-Berkeley) over a feature story by a reporter for the Business Times.

Amos_thePokerCat said... 8/11/2006 1:06 PM

I didn't realize that Saxenian said anything about why Lycos left? Especially concidering that the book was writen just before Lycos left. Nor does the PitBizTimes make any claims of analyzing buisiness models, decentralized vs. vertically integrated firms, nor does it mention any companies that left for SV or CA.

It does give a thumbnail history of tech business in BOS, including the multiple boom and bust cycles. That MA went stagnant, would not surprize a reader of this article since it happened before. The article enumnerates all the infrastructural advantages available in BOS, from the number of state economic development agencies, to avilablity of experienced tech and VC lawyers to real estate agents familiar with the needs of tech firms. If you read the article, near the end it even had a quote from Micheal Porter from the HBS:

Attempting to follow the exact path taken by Boston isn't likely to work, either.

"You'll never recreate Route 128," Mr. Porter said. "You're way behind. What you ought to be doing is creating a new Silicon Valley."


Doesn't sound much different that what Saxenian might suggest.

What the PITBizTimes article does document is that at the time, it was a common belief that Lycos left for MA because, amoung other things, it could not hire the people it wanted. This common belief was without any input from Florida.

I am interesting in reading Saxenian's new "Argonaut" book, and finding out what she has to say about the bubble busting and the its effect on SV.

If I am interesting in explaining the effect of different tech biz models on the economy, I'll quote Saxenian. If I want to document what happened when in PIT biz, then I'll take a feature writer from here giving me the who, what, where, when, and why.

Mike Madison said... 8/11/2006 2:13 PM

If you read my comment, you'll note that I didn't suggest that Saxenian had anything to say about Lycos. My point was that Saxenian drew a portrait of Boston that was at odds with the portrait drawn by the BT writer. A related point was that Saxenian worked from data; the BT worked from anecdote.

I also don't think that a fair reading of Saxenian produces the inference that she thinks the Boston "model," whatever it was, was worth emulating. The major point of the book was not that one technology regional model was better than another, but that different underlying material conditions -- and legal conditions, and particular the employment freedom enjoyed by California workers compared to their Massachusetts colleagues -- contributed heavily to the different results observed in those two places. The Michael Porter quote is a minor historical laugher, but a laugher nonetheless; his implication was that Route 128 was way ahead of the Silicon Valley w/r/t "infrastructural" advantages. That's a nice piece of regional prejudice (even -- or especially -- coming from a famous HBS professor, but that's all that it is.

For the sake of closing at least part of this thread, though, I'm happy to grant anyone the proposition that the word on the (Pittsburgh) street back in the pre-BF day was that Lycos left in part because there wasn't enough technical talent here. I'm happy to grant anyone the proposition that RF isn't the progenitor of the proposition that a clever population leads to a more productive economy. (Remember that the original post wasn't a critique of RF himself; I was using RF's self-promotion to raise the Lycos question.)

So? (That is, after all, the point of the discussion.)

Imagine that Pittsburgh had the technical skill to support Lycos back in the mid-1990s. Then what? Would Lycos have stayed? Maybe; maybe not; let's assume that it would have. So (again)?

Remember that the initial version of the Google search tool was released in late 1998, and the hub or portal business model went into the tank not long afterward (the burst of the bubble didn't help, but Google may well have killed the portal model anyway). So Lycos/Pittsburgh might have lived a bright existence for a time, but it's moment at the top of the arc would have been brief, before it returned to a much lower orbit. As it has, in fact, done post-Pittsburgh. IOW, there's no reason to think that Lycos would have been more successful if it had stayed.

Would Pittsburgh have been better off if Lycos had stayed? The most optimistic view of the consequences, I guess, is that Lycos's brief moment of hypothetical success would have attracted a critical mass of other entrepreneurs, investors, and engineers (and lawyers and real estate professionals and accountants and restauranteurs and bike messengers) so that when the inevitable Lycos crash came, the local tech economy would have happily gobbled up the people and the pieces, and they would have built more pyramids on top of the foundations laid by Lycos. Or, somewhat differently, Lycos alumni would have fanned out across the region and inaugurate a technological renaissance through their force of will and the willingness of local VCs and bankers to fund them.

That's possible, I guess, my IMO it's nowhere near to what probably would have happened. We're still waiting for meaningful economic bounces from Fore Systems and FreeMarkets, aren't we? To think that Lycos-in-Pittsburgh would have been the equivalent of Fairchild Semiconductor in the Silicon Valley is just fanciful.

I'll generalize: put all the top and middle engineering and other "creative" talent you want into Oakland and Shadyside and Lawrenceville and the South Side and Wexford and Canonsburg and the Strip District. And IMO you are likely to get -- not much more than you have now *unless* there are also financial/legal/political structures in place to organize that talent and give it direction.

RF didn't invent his wheel; I'm not inventing a wheel, either. This strikes me as pretty basic stuff. But to conclude my carnival of mixed metaphors: Haven't we beaten this horse to death?

Amos_thePokerCat said... 8/12/2006 8:47 PM

"For the sake of closing at least part of this thread, though, I'm happy to grant anyone the proposition that the word on the (Pittsburgh) street back in the pre-BF day was that Lycos left in part because there wasn't enough technical talent here."

So, does that bust the myth about the myth of Lycos? I mean that is the title of the posting.

You are really making too much about the PIT BT article, and comparing it to the Saxenian book. Apples and loaves. There are three companies leave PIT at almost the same time for BOS. Clearly this brings up the question "Why?". That is what the PIT BT article is trying to investigate, not some all encompassing exhaustive study of region advantage.

As for the "What-if?" part. Never commented on it. In general, I agree with your speculative alternative history that Lycos would not have made much of a difference. THe PG has noted the few Free Market alumni involved in small startups. Glen Meakem clearly got the biggest peice of that pie, and has a boutique VC company. Fore even less so. A couple of spin offs, that are now functionally dead, or bought out. CoManage no longer even has its name on the building after being bought last year.

Mike Madison said... 8/12/2006 10:20 PM

Well, what I had in mind originally by the "myth" title -- though I left it deliberately vague -- was the proposition that the Lycos story offers a generalizable insight about regional economic winners and losers. Even if it was three companies, not one, I don't think that *three* companies moving around the same time is evidence of much except the kind of interesting coincidence that gets the attention of newspaper editors. If Pittsburgh companies had continued to stream toward Boston, or if companies elsewhere had continued to stream toward Boston, or if something dramatic had happened in Pittsburgh after those three companies left, so that the apparent tide was stemmed, I'd be much more intrigued. Whether the BT story and Saxenian's book and Florida's work are speaking to the same precise topic is, IMO, beside the point. They're clearly part of the same debate, even if the weight each one deserves is different. The point of the underlying debate is what if anything a region can do (note more deliberate vagueness as to who the word "region" refers to) to promote tech-based economic development. Rich Florida says yes, and Saxenian also says yes (at least that's my read), but they have different answers.

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Pittsblog 2.0 is written by Mike Madison, a law professor at the University of Pittsburgh. Send email to michael.j.madison[at]gmail.com. Mike also blogs at Madisonian.net, on law and technology. Chris Briem of Null Space drops by from time to time.

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