“We may have gotten the evaluation wrong,” said Mark Walsh '76 of the collapse of the technology market, “but we didn't get the value wrong. We didn't get the value wrong of what [technology] means to your life and my life.”
Speaking at the opening of the Summit at Tech Valley on Monday, April 28, the Union trustee, entrepreneur and venture capitalist in online applications explored the three-year slide of the technology market, made some predictions about connectivity and did some cheerleading for the region's technology initiatives.
Walsh, managing partner at private investment entity Ruxton Associates in Washington, gave a talk, “From Phoenix to Ashes to Phoenix: The Power of Technology Cycles,” to open the two-day meeting of the region's technology, business, academic and government leaders.
Factors in what Walsh called “the largest single monetary loss of wealth in the history of mankind” included the “recipe for insanity … the land-grab belief that the internet buzz opened fields that we must claim,” he said. Investors followed the earlier financial model of cable television, when the value of entertainment companies exploded. “Think of compressing that knowledge curve of cable television … this is why you saw a lot of financing.”
Another element was the flawed analysis that the internet and technology were bringing new money into the marketplace, he said. “In fact, it was just moving … current transactions over to a new pipeline.”
Walsh said that the tech market is now in the “punishment phase … which gets back to FUD – fear, uncertainty and doubt.”
Also, Walsh said, we did not predict how quickly consumers would adopt “this new technological wrinkle called the net.” So-called “old economy companies” reacted and started to use the Web to find new vendors and save money. “They started doing business the way they used to do business, but better. Financial results began to matter again and there needed to be an “E” in the P/E [price to earnings] ratios for a lot of these companies.”
“The next chapter,” said Walsh, “is connectivity of everything to everything.
“What if inventory management of your household or business got better? What if you knew that videotapes were late and you were going to start getting charged for them? What if your refrigerator, your dishwasher, all the devices in your household were smarter and knew to manage your inventory in a better way? What if things were connected, and what if they knew how to use that connectivity? The mind reels … with how cool things could be.”
He predicted that wireless will become ubiquitous. “I predict soon that you will not go to companies, to restaurants, you will not take trains, you will not go in rental cars, you will not go places that aren't, in some fashion, connected in a wireless environment.”
Finally, Walsh said the region is poised to become a center of technological innovation. “I stand today at Tech Valley and I would suggest to you that we sit in a catbird seat because [we] have the motivation, education, tradition, financing, geographical support, the Chamber of Commerce support, and government support to get this done … timing is everything, and the time is now. From boom to bust to boom, strap on your seatbelts Tech Valley. It's going to be, in my opinion, one hell of a ride.”
Walsh joined AOL in 1995 and created and ran AOL Enterprise, the business-to-business division of AOL. In 1997, he joined VerticalNet Inc., and as the CEO made it the first publicly traded business-to-business Internet company. He became chairman in late 2000. After earning an MBA from Harvard Business School in 1980, Walsh worked for a number of years at Home Box Office in New York in new business development for the HBO and Cinemax brands. He joined the College's Board of Trustees in 2001.
For further details on the Summit, visit http://www.techvalley.org