Is Silicon Valley seeing an economic turnaround?

Michael Malone wrote a post that caught my eye this morning saying he’s seeing an economic turnaround in Silicon Valley.

He might have a point. I’m seeing a bit more optimism in the valley. Yes, January was bloody. Yes, we’re still seeing layoffs, and probably will see a few more. Yes, our houses are under water (there are three houses on sale on just my small street and one of them is a foreclosure, so I owe more on my house than it’s now worth in the marketplace).

But I’ve been feeling more optimistic lately. At least about the Valley. After I got back from Davos I was really depressed. Why? Because I heard very few ideas about how to get people working again. But then I got back to the valley and met with companies like Playfish, which has been seeing great growth lately (they are the most popular games company on Facebook).

Also, this week we saw Intel invest billions of dollars in its US plants.

Oh, and some companies, like Craig’s List and Etsy, are seeing increased activity because of the recession. Above is a video I shot on Sunday of Craig Newmark, founder of Craig’s List.

Some other interviews you should check out:
Playfish’s CEO talking about how they are building games for Facebook, part I and part II.
Etsy’s founder, in Davos, talking about the success he’s seeing in selling handmade goods.

Oh, and Twitter just closed another round of funding.

Have we hit bottom? It’s too early to say, but it sure is nice to see even a little optimism around.

A "juicy" Silicon Valley startup

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For those of you who have moved to Silicon Valley in the past 10 years you might have missed that it is built on a set of former orchards. Which is why this startup (Maverick Brands, aka Sunkist Naturals) caught my eye. I thought that maybe this CEO, Mark Shaw, had missed the memo that we do web sites and design iPhones here now and that we outsourced our food production to the Central Valley over the hill.

OK, I’m being a bit of a smartass because I know that there’s lots of food and drink companies that have started here, or near here, like Odwalla which is now owned by Coca Cola and is served in Google’s lobbies.

Anyway, we did a longer HD video series with Mark that’ll air soon, but here’s a short little one I filmed with my FlipCam.

Some things I learned while talking with Mark yesterday.

They are less than a year old and already got their product onto 5,000 grocery store shelves. How? Hiring people who have great reputations in the industry. Having a brand that doesn’t need a lot of advertising to get noticed. Distribution is key to their strategy. They located their factory along Interstate highways in California that get a lot of trucking traffic and can buy partial loads on those trucks and get to market fast, which keeps their product fresher and lets them be much more nimble because they don’t need to get an order for an entire semi truck trailer load.

Because they are a startup they are able to spend more on ingredients because they don’t have the pressure that other companies have to reduce cost. Also, they have a high-tech factory that has no oxygen. Workers basically have to wear space suits to work inside the packing plant. This lets them ensure quality and also keep the product fresher longer (oxygen ruins fruit and causes rapid spoilage, even if refrigerated).

They spent a lot of time thinking about the packaging, bringing in a designer from Europe, where fresh foods are taken more seriously than here. They worked on a rounded bottle that looks unique but still isn’t likely to fall over.

Mark is a great evangelist for his product. He not only is an authority on his marketplace, he keeps versions of his competitor’s products around and can tell you the good and the bad of them. So few CEOs are willing to educate me on the marketplace, which includes their competitors (the good ones do, last week talking to Rackspace employees they could tell you everything that Amazon is doing right, for instance — that made me impressed enough to remember it a week later).

Things that high tech startups would recognize? The crappy low-cost furniture, since most of the employees work on the road he didn’t need lots of nice furniture or overy impressive desks, etc. The wifi router in the corner. The selection of Macs and PCs.

Any other startups in Silicon Valley catch your eye the way this one did?

“But Scoble, is the stuff any good?” It’s passed the Maryam test with flying colors, and I like it. Will I give up Diet Coke for it? Probably, it sure is better for me than the chemical stuff in that or Pepsi.

"Sky isn't falling" blogger says

Steven Hodson, over at the Inquistr blog, says “the sky isn’t falling” and “What do we get instead? We get people like Robert Scoble who have for the last few days done nothing more than highlight everything bad going on.”

Ahh, yes, ye olde blame the messenger post.

See, all week long I’ve been saying we’re in a death spiral. They argued with me last weekend and on Monday before the market had its worst week ever. Ever.

They are still fighting with me after I’ve been talking with CEOs, investors, normal people, and reading thousands of feeds and watching CNBC nearly around the clock.

Funny that even the experts are wrong. CNBC’s Fast Money show has been calling for the market to go up on every show this week. It, instead, went down down down.

I prefer to tell people the truth as I’m hearing it, even if that truth is tough and nasty.

That said, if you’re watching my posts here I’m looking at this like a hurricane moving across our economy.

It hit New York three weeks ago. Then it moved onto other parts of our economy (auto industry is getting hammered right now, for instance).

My radar screen shows its full effects have not yet been felt in the tech industry for a variety of reasons. But it is headed here.

Now, what happens in a storm? Some trees topple. Some stand tall.

But right now to try to smile and say everything is going great and you should be optimistic is wrong. Sorry, it’s wrong.

It’s time to take steps to make sure your businesses are strong and can withstand the storm. If they aren’t strong, it’s time to fix that and fix that fast.

As the storm passes over us in the next quarter (financial results are still to come, so there’s still a couple of bad quarters to come, particularly with consumer electronics companies and retailers as they get a full sense of how bad the Christmas buying season will be) we’ll certainly see winners and losers.

Last weekend I was really freaked out. I was right to be freaked out.

Today I’m a lot more calm and am “working the problem.”

So, Steven is right too. The truth is often in between two extremes. But I won’t apologize for losing my head on Monday. If you had listened to the optimists and had bought on Monday you would have lost another 18% of your wealth. If you had listened to me and sold you’d have a lot more to buy back in or to use to keep paying your bills over the next year or two.

It’s why I keep asking questions here, too. I don’t have all the answers. Heck, I don’t have many answers at all. But the neat thing about this is you can share your opinions and views of what’s going on and give us ideas for how to ride out the coming storm.

Post a URL if you have some good ones, we’ll all appreciate it.

Silicon Valley's janitor problem

The janitors for many of tech’s biggest companies decided to walk out on strike today.

I’m not a big union supporter. I generally don’t like the things because, for the most part, I live in a meritocracy. If I don’t get interesting videos, no one will show up and eventually sponsors figure that out and decide to spend their money somewhere else.

In the tech world if you build something interesting you’ll get the money and the job and all that. Yeah, I know there are exceptions and we should talk about those again sometime but that meritocracy works because it’s easy to get noticed in the geek world.

Right now at Google there’s a bunch of geeks coding cool stuff for mobile phones as part of WhereCamp. Are you a geek who knows how to code something cool for mobile phones? Well, you just need to show up. There’s no walls keeping you out. No entry fees. No one saying “your type can’t come in here.”

But, I’m not naive enough to think that the entire world works that way.

Have you ever thought about the people who clean your buildings? They are easy to miss. They usually come in after 10 p.m. — long after you should have left. At Microsoft I got to know a few of them because I was one of the few employees who’d stick around after hours.

I also lived with a guy who was a janitor at a San Jose school for a while, so I got to know a little bit about the profession that most people don’t like to talk about (or even see, which is why most of these people work at night).

But I do notice and it’s criminal that the people who clean the billionaires’ offices only make $23,000 or so, especially when janitors in other areas make more (and the housing costs of those people in those areas are less too, which doubles the insult). Yes, I know that to most people in the world $23,000 sounds like a lot of money (more than half of the world lives on $2 or so a day in income). But in Silicon Valley? That’s way below the poverty line (remember, an average house here costs more than $700,000).

So, it’s time to fix this little problem before Monday and pay them more and get them back to work. Oh, and to the people who work at these companies: why don’t you stick around until 8 p.m. or so, then drop off your trash in front of the CEO’s office? I guarantee if you do that this problem will get solved by Tuesday morning.