March 2011 Archive

The Mystery of Loewy's and Indonesia's Lack of a Brain Drain

I am writing this from one of my least favorite places in the Jakarta-- the Soekarno Hatta International Airport. Almost a year ago I was on my last leg of travel for my book and my health, stamina and bank account were all running on fumes. I spent a brutal nine-hour layover in this airport, most of it slumped in a chair at Starbucks, half-stricken with a fever, my nose raw from blowing it on cardboard-like napkins watching the only thing I had downloaded on my iPad-- America's Next Top Model. (Don't judge.) The minutes seemed to go in reverse, and I spent most of the time trying not to cry or pass out. I vividly remember it every time I'm here. 

My loathing of this airport stands out because there are so many places in Jakarta I adore, and I'm sad I didn't get to spend more time here on this trip. Most of them have to do with food, and conversations with entrepreneurs I've had around that food. There's Bandar Djakarta-- the huge restaurant in Ancol that's a cross between an Indonesian Chuck E. Cheese and a Fudruckers in a beach town like Panama City.

Any live seafood you can imagine-- and some so prehistoric looking you're not sure how they still exist- can be found in Bandar Djakarta's coolers. You point to the ones you want, loosely describe how you want it cooked, then wedge in at one of the long tables where middle class Indonesians come to celebrate their birthdays. A jazzy version of "Happy Birthday to You" plays in Bahasa about twenty or thirty times a night.

There's Pondok Laguna-- yet another seafood place where I usually order at least six things, all of them as spicy as they'll possibly give an American. My first time there I wondered how to break into the crab without crackers, when I looked over and saw an old Chinese man, stone-faced, smashing his mug of Bintang on the crab like a WWF wrestler doing a body slam.

Laguna is open-air and cavernous, loud, steamy and full of sprawling Indonesian families enjoying a night out together as kids run between tables. They fully expect you to make a pig of yourself-- the tables aren't bussed once you're done, as much as waiters take the scraper-side of a long carwash squeegee and slide everything on the table into huge tubs. The squeegee is flipped around, and voila! The table is mopped down and ready for the next diners.

And during this trip, I had a meal that rivaled both of those in Makassar. At an unassuming spot, we were served beef spare ribs slow-grilled to perfection out on the busy market street and slathered with a complex, spicy peanut sauce. We gnawed on the bones like rabid animals, using our fingers and the rice to sop up an even more tongue-numbingly spicy peanut sauce.

I love the full sensory experience of Indonesian food-- the sticky mess, the taste, the smell (unless Durian is involved) and of course the tingling burn in my mouth from the spice once I'm done. It's the only country in the world where I can't figure out what in the hell could be in the sauces making them so complex, layered and unlike anything I've ever tasted. Indonesia is home to more indigenous herbs and spices than any place in the world, and yet, I'm convinced they've held some back for their own cooking that the rest of the world has never heard of. A sort of revenge for 350 years of Colonialism, spurred by that same bounty of spices. 

But one of my favorite places in Jarkarta is called Loewy's, and it isn't authentic at all. If you've been to Pastis in Manhattan, you've essentially been to Loewy's-- at least structurally. There are some Indonesian-inspired touches-- like the Tom Yum Martini and flavorful rice dishes. But there's no denying that Loewy's is pretty Western.

I used to feel guilty about liking it so much. You never want to be the American going to an American place in a country like Indonesia where the local dining experience is so rich. But I couldn't help it. There is something infectious about Loewy's. The atmosphere is hopeful and electric, and yet, it's comfortable and familiar. It's one of those places I could sit in all day reading a book or working on a blog post and never feel pressured to leave.

More than that, there was always something I couldn't explain about it. Somehow, it doesn't feel like an expat-haven, although there's a feeling of being amid a group of people who don't quite fit; people seeking sameness in a strange place. But that just confused me more, because Loewy's is usually filled with hip, affluent Indonesians, not Westerners.

It all made more sense to me once someone explained that Loewy's isn't owned by Americans-- it is actually a local place. It was opened by some Jakarta kids who studied in the US and loved Pastis. When they came back home they wanted to take a piece of that, so they recreated it Indonesia-style.  It explains the strange expat vibe: Not only are there Americans like me going to Loewy's to feel a bit of the West-- but Indonesians who used to live in the US are going there for the same thing. Even though we're from different places, the Americans and Indonesians in Loewy's are all trying to get a sense of home and a sense of exotic at the same time. In my case, it's just reversed from those I'm dining with. Put another way, some of the diners in Loewy's are actual expats and some go there to pretend they are again. 

I haven't found a place like this anywhere else in the world. Most expat bars and restaurants are pure-expat with locals and people wanting to mix with locals turning their nose up at the idea of them. Then there are the TGI Fridays and Chilis that dot the emerging world. In my experience, these are mostly frequented by locals, fascinated with the exoticness of Americana, but few actual Americans go there. But a place like Loewy's that's somewhere between the two, filling the need for both groups is unique.

It makes more sense once you understand the typical Indonesian who studies in the US. More often than not, these are sons and daughters of Indonesia's wealthiest industrial families. They get to study in America, and the lucky ones get a bit more time to play around in cities like New York and LA post graduation. But "the call," as they refer to it, always comes eventually.

The family tells them on "the call" that the fun is over, and it's time to come home and be groomed to take over the family business. Some look forward to coming back, but most wish they could stay longer. But almost all of them uphold the families' wishes. That was-- after all-- the terms under which they got to study in the US to begin with. 

This isn't just anecdotal. While it's all but impossible for Indians to get granted US student visas these days, Indonesians get approved at a rate north of 85%, according to the Embassy folks I traveled with for the last two weeks. "It's amazing," I was told. "They just never overstay."

That helps explain the puzzling lack of Indonesian restaurants in the US, since Chinatowns and Little Italies sprung up as a way for immigrants to build a business and replicate some sense of home. It has also lead to yet another phenomenon that makes Indonesia unique for an emerging market: It hasn't had a brain drain to the West. The kind of reverse brain drain that we're now fretting about with India and China-- where people study in the US but go back home to build companies-- has long been happening with Indonesia. But is that a good thing or a bad thing for the Indonesia? I could argue both sides. 

On the downside, it's another reason that Indonesia-- its population, its natural resources, its potential--  is such a well kept secret, because you don't have a diaspora out evangelizing it. India's huge population aside, one of the biggest reasons so much capital flows from Silicon Valley is because Indian entrepreneurs have made such stellar entrepreneurs here. People feel like they have reference points and cultural bridges. The lack of Indonesian reference points hurts the flow of foreign capital-- especially given the insane amount of opportunities to invest in the emerging world. Best case: Indonesia is simply not top of mind. Worst case: The lack of these "cultural ambassadors" can reinforce negative stereotypes, like the idea that Indonesia has a more radical Muslim population than it does. 

On an individual level, successful expats who spend time in the west develop marketable skills necessary to bridge the two markets from an operational standpoint. And of course many expats can achieve greater success in the West, leading to a flood of remittances coming back home, enriching family members. 

But there's an upside for Indonesia too: The best educated Indonesians almost always return home, reinvigorated with what they've seen in the US, whether it's the entrepreneurial spirit of Silicon Valley, the glamour of LA or the style of New York. They don't seek to replicate it, but longing for it, they build things like Loewy's that combine the two cultures. Rather than building a piece of home in the US-- ala Chinatown-- these Indonesians build a piece of the US at home. 

The brain-drain debate is a bit like the catch-22 of multinationals. Western companies can provide a quick-fix for an economy when they charge in and offer thousands of highly-skilled, high-paying jobs. But as we've seen in India, multinationals only help the small percentage of people who are lucky enough to land those jobs. Building a creative-class of local entrepreneurs takes far longer, and requires government and private sector coordination that's lacking in many emerging markets. But it's the only sustainable way to transform an economy in the long term. So too, might the lack of a brain drain hurt Indonesia in the short term, but prove and advantage in the long term. It's all up to these kids trapped somewhere between a native and an expat in their own homeland.

Two weeks ago, I spoke at a dinner of US alumni in Surabaya. I was told the audience represented most of the money in the second largest city on the island of Java, and most of them had lived the story above. They spoke flawless English and had many of the earmarks of being American-educated. But as I looked over the audience it was unmistakably Indonesian. No Western brands here; it was a sea of the same Batik shirts their parents and grandparents had worn at formal events before them. Like Loewy's, the conversations about global business made me feel at home, and yet, looking around, I was still clearly in Indonesia. 

While I've never been a big believer that trustfund kids change the world, I've become convinced that this frustrated generation will be pivotal to what happens to Indonesia next. Unlike their parents, they've spent time in the West and if they can't stay, there are parts of it they plan on bringing home with them. Unlike Americans seeking to profit from Indonesia's growing middle class, they get the country. But unlike many Indonesians, they get what modernization and technology can make possible.

It's not just Loewy's-- many of these kids are angel investing in Web startups following models they saw in the West. They may not be free to run them, but they can fund someone who can. Many of them are pushing the government to improve Indonesia's infrastructure or forming powerful private sector coalitions that can make changes faster than the government. Some may well run for office one day. If they're forced to come home, they're determined to make life in Indonesia better. And better doesn't just mean Western -- it means a modern Indonesia. 

Two Weeks of Living Dangerously

Well, that was a fascinating and exhausting two weeks. I'm wrapping up my seven city, 20 keynote trip through Indonesia with the State Department today. I'm done with all official duties, sipping some ginger tea at the old Hotel Indonesia-- the one foreign journalists used to stay in during the fall of Sukarno, ala The Year of Living Dangerously. A huge mall has been built around it today and it's been totally redone, but it's still here with parts of it preserved for historical reasons. Those journalists were true bad-asses. Traveling in Indonesia isn't always easy today, but at least there are no coups and riots to navigate. The property is a fitting metaphor for how Indonesia has evolved and modernized around the authentic core of indiginous food, music, batik, creativity and chaos that it (thank God) refuses to let go of.

All that's left of my trip is a morning of spa appointments-- at the insistence of Martha Tilaar or the "Indonesian Oprah" as I call her in my new book. I saw Martha at a meeting of governement ministers a week ago, and few people have been more delighted to see that I am pregnant. (Marco Gomes' mother was up there too. Apparently, I collected an amazing array of International surrogate moms during my two year journey.)

I forgot how amazing Tilaar is. Not only did her company recently go public on the Indonesian stock exchange, but she is not afraid to speak her mind ever. She's so used to everyone calling her crazy, that she doesn't care what anyone says about her. You could tell the government was a little nervous everytime she opened her mouth. That's the way the realtionship between amazing entrepreneurs and the government should be, if you ask me. 

I was amazed to see Tilaar already had a copy of my book and had read the entire thing, marking it up with notes. It was surreal to see her wave it in ministers' faces telling them they all needed to read it and sharing her lessons from the stories of others in the book. 

But fearlessness aside, Martha was aghast at my city-to-city schedule and insisted on three hours of prenatal massage treatments at her spa before I get on my long flight home. I confess, I am happy to take the pampering. This trip was amazing, and I loved getting to see so many different parts of Indonesia I had never seen before. And, I will treasure many conversations I had, particularly with women entrepreneurs throughout the country. And, as always, I had some awesome food.

But I'm much happier when I'm traveling through a country my way-- taking time to understand each place, not flying through them; listening, not speaking; wearing jeans and a T-shirt, not business attire; a trip where I'm taking pictures, not posing for them. And while the baby has proven to be a total travel trooper, as my belly grows my little green suitcase is getting harder and harder to lug around airports without modern jetways or esclators. 

I should add a huge thank you to all the local consulate and embassy staff members who accompanied me on various legs of the trip. I'm always impressed with people I meet in the foriegn service. From my experience, they represent our country well. 

Pia Alisjahbana: The Other Hugely Famous Female Indonesian Mogul

Last Import - 40 This was a huge treat. Yesterday, I did a keynote at a place called @America-- a first-of-its-kind American culture and event center in Jakarta in -- where else?-- a mall. All of South East Asia loves its malls-- the more ridiculously grand the better. But Jakarta is the only place where I've attended business and startup events in malls.

@America is sponsored by some of our biggest tech companies like Cisco and Google, and as such it's a pretty slick facility. In nearly 15 keynotes I've given in the last week, it was the first time the slide clicker actually worked

I was thrilled to see an audience full of teenaged girls-- all wearing different colored blazers denoting what school they were from. That's a normal sight here, but to my American eye they looked like an audience of little Indonesian realtors.

But the real honor was that Pia Alisjahbana attended. Quite rightly, she was mobbed by the girls when we walked in, everyone snapping a photo of her with their Blackberries. Alisjahbana, a professor and owner of a magazine publishing empire, is one of the most famous female moguls in Indonesia. The other is Martha Tilaar-- who I write about in the Indonesia section of Brilliant, Crazy, Cocky and with whom I'm doing an event tomorrow.

Alisjahbana was gracious when I called her out during my keynote. I was talking about the importace of finding mentors, and arguing that would-be entrepreneurs need to be aggressive about finding them. I asked Alisjahbana if she would take time to sit down with one of these kids if they called her and asked her for an hour of her time and free advice. She stood up, warmly smiled and looked around telling everyone yes to great applause, and I can only hope she gets flooded with requests from the ambitious young girls I met seeking to build their own fortunes. 

Alisjahbana also graciously shared a bit of her story with us. It started with her parents who were publishers until Indonesia's former president, Sukarno, took away their printing press and told them to go to hell. They fled to Kuala Lumpur with the family. But they missed Indonesia and came back once Alisjahbana was grown and gave birth to her first child. The family was hoping the famously mercurial Sukarno might give the printing press back, but they needed a way to get an audience with him. They fought through a crowd at one of his appearances, and Alisjahbana's mother shoved her daughter in front of Sukarno telling him the family had recieved a new baby and wanted him to honor them by naming her. He told them to come by the palace the next day. It took a few tries but they finally got an audience with him, and he bestowed a name on the child. He then asked what the parents did for a living and the mother said, "Nothing! You took our printing press away from us years ago!" As expected he had no memory of it or why he did it, laughed and gave it back. The family was back in business. 

Years later, at her husband's suggestion, Alisjahbana started the first "non-trashy" women's magazine called Femina, and the girls at the event had grown up reading it. The octogenarian recently passed the empire on to her daughter and retired, but I have no doubt she fills her free time with plenty of projects. 

Like a lot of Indonesian women, when I asked how she juggled family and work she said she just brought her kids with her everywhere. They fit into her life, rather than her shaping her identity around them. I'm starting to warm to that philosophy. Don't be surprised if the next time I write to you from Indonesia, I've got the baby in a sling with me. 

What Indonesian Women Taught Me in a Week

(Crossposted from TechCrunch)

Last Import - 21 JAKARTA– I’m mid-way through a trip to Indonesia at the request of the State Department, and I’m finding a hard time putting the experience into words. You’d think after two years of writing about other countries it’d be easy. I can’t remember if it was always this hard, or there’s just something different about this trip.

Maybe it’s the added surreal layer that this time, I’m flying around between seven far-flung cities in the world’s largest Muslim country talking about the importance of more Indonesian women starting companies.

Most people know the topic of “WHY AREN’T THERE MORE WOMEN IN SILICON VALLEY?” isn’t my favorite. Far too often the debate degenerates into grandstanding, whining and pointing fingers at all those evil male gatekeepers like, you know, TechCrunch. Never mind our company is run by a woman, our editorial group reports to another woman and more than half our senior staff are women.

But even worse, the debate has degenerated into pure linkbait. I rarely read anything new or thought-provoking on it. People glorify the need to RAISE AWARENESS, but who isn’t aware? Do you have eyes, and have you ever been to a tech conference? Then you’re plenty aware. We all are. Still hasn’t fixed the problem.

So while a lot of the women I’m talking to are expecting the fancy US expert to come in and tell them all how we’ve figured it out and what they should learn from us– I’m doing the opposite. I’m telling them how messed up it is in the world’s great meritocracy of Silicon Valley. I’m telling them that only about 20% of tech workers are women, despite more women graduating with math and science degrees than ever before. I’m telling them that only 15 Fortune500 companies have woman CEOs despite there being gender parity in terms of management jobs in the US, according to the World Economic Forum. I’m telling them that even though 40% of small businesses are women owned, only 8% of the venture funded startups are.

And then I’m telling them that for all the talk and handwringing about it, the smartest people I know can’t for the life of them figure out why that is. We have no idea why immigrants in Silicon Valley can do so much better in our country than American women can, and we have less of an idea how to fix it.

I tell them all the reasons people come up with and ask them if they face those things here in Indonesia. I tell them why I think some of those reasons are cop-outs and why some– like work-life balance– are legitimate issues that do keep women from starting businesses. I tell them how many professional women– me included–get trapped in feeling like pregnancy is a disability, rather than proof of how strong we are. And we talk  about some solutions to make things better.

Most of all, I’m telling them the easiest way to break a glass ceiling is to never create one, and urging groups to work hard to include women in Indonesia’s burgeoning private sector and entrepreneurial ecosystem now, while it’s just getting started.

It’s surreal for me, an American woman, to be telling audience after audience of women dressed in traditional Muslim headscarves that we don’t have gender equality figured out. But it’s more surreal for them to hear it. More than a few women have told me they were shocked. That they’d assumed women could do whatever they wanted in the US. A few have said that after my talk, they think starting a company sounds easier in Indonesia.

Sure, a few times a male in the audience has gone there. One fervently disagreed with my entire keynote saying that it was morally wrong for women to be out of the home and that if the government did anything to advocate this, it would be a nightmare for Indonesian society, birth rates would go into free-fall and all hell would break loose. It was a long diatribe, and my translator clearly gave me the nice version of his comments. Whether it was stated or not, the implication was there: What the hell are you doing out of the house half way around the world, crazy American lady? What’s wrong with your husband?

Another time, a man suggested that the US statistics proved that women shouldn’t start businesses. Turning my argument on its head, he suggested that the US economy doesn’t seem to be missing the participation of more women, and that it’d clearly been a positive for us. I pointed out that studies have shown that women-owned businesses become profitable faster and generate more revenue, and that the US economy isn’t exactly a global role model these days. There’s also the obvious retort– we have no idea what the opportunity cost from more women not participating in Silicon Valley’s economy has been. “Sorry, pal, but the facts just aren’t on your side,” I said, and the predominantly female audience laughed.

These are obviously viewpoints too un-PC to voice in the US, even if many people still believe them. But when each guy made these arguments, the women in the audience didn’t seem cowed or even too concerned. There was definitely some knowing-looks and eye rolling exchanged. “Oh there he goes again talking about how we need to stay in the house…” The attitude wasn’t preventing women from attending these events or the entrepreneurship colleges I’ve spoken at, where more than half of the audience have typically been women.

I’ve known from my previous trips to this country that Muslim Indonesians are very moderate and not at all like the stereotype many Americans would expect, particularly in more cosmopolitan urban areas. But during this trip, I’ve frequently been speaking at Muslim schools in more remote cities. My first talk was in a school so known for demonstrations that last week several classrooms were set on fire. And yet, even there the women don’t fit the meek-and-submissive stereotype as much as a few of the men would clearly like them to.

The brutality of Indonesian life– whether it’s 350 years of colonial domination, dictators, poverty or a never-ending assault of natural disasters– have forged these women into pure steel. Friends in the US have remarked at how intense it is that I’m here traveling city-to-city, lugging suitcases up and down jetway stairs in the tropical heat, delivering keynotes for more than three hours per day. Indeed, for an American pregnant woman, it is a pretty intense schedule. My ankles have morphed into thick, bloated stumps. Last week a clerk at a maternity store refused to let me carry a small bag of clothes to my car, I haven’t washed a dirty dish or stitch of laundry since my husband found out the news, and Paul Carr regularly takes my backpack from me when I try to leave the TechCrunch offices every night.

And yet, I met a woman the other day who runs a company delivering goods and services to remote villages. She has seven kids. When she was nine-months pregnant with number seven she was loading up her motorbike with supplies and winding around Indonesia’s crazy highways and dirt roads to continue her work. That, ladies and gentlemen, is intense. Is that woman going to be stopped by a man telling her she’s not strong enough to run a company? The idea made her laugh. She was sitting in the front row of one of my keynotes, and I don’t think I’ve ever seen a woman so confident and self-possessed. She was not only badass, she was well aware of just how badass she was.

Unlike shrill women advocates in the US, these women don’t care whether male gatekeepers try to keep them down; it doesn’t seem to affect them. They shrug and go after what they want anyway. That’s stunning because generally Indonesia is a culture that looks to the government to solve most of their problems for them.

I spent the afternoon in Jakarta the other day with a group called IWAPI– which translated stands for the Indonesian Businesswoman’s Association. The woman who runs it commanded the room with intense features, a bright red headscarf and an elaborate green silk dress. (She’s center in the picture to the left.) Throughout the meeting she snapped at her assistant– a man– to bring the water, fetch her bag, bring more chairs. My male state department guide looked a little scared. Before I could say anything she started to grill me on my qualifications. I knew one thing immediately: I never want this woman on my bad side.

But she uses that intensity to create opportunities for the 40,000 members of this organization that was started the year I was born. For instance, while some entrepreneurs in the country are complaining that new Asian trade agreements will flood the domestic market with cheaper Chinese goods, IWAPI is organizing its own collective trade missions to surrounding South East Asian countries, looking for new markets to offset the risk. The woman in green told me what she tells young women in Indonesia: The literal translation for the Bahasa word for entrepreneur is “a person who makes things happen.” “If you want things to be done for you, you’re not an entrepreneur,” she said. “You work for the entrepreneur.”

Many of the women I’ve met– including those at IWAPI– appear to do a much better job at the thing we fail at most: Women helping lift one another up. Last week, I visited a co-op in Surabaya, where women jointly run a hotel, a grocery store (below) and a sort of local Indonesian street vendor food court. They pool that money– and money from outside investors– to grant more than $1 billion rupiahs (or more than $100,000) in monthly microloans to their 12,000 women members. Operating well before microloans were trendy, this co-op has been in business 30 years.

It was a hub of activity– women working at the various businesses, women helping watch one another’s kids, women in the computer lab learning how the Internet could help fuel their businesses, women in line to make payments on their loans. No one is worrying too much about work-life balance, because it’s a given many of them will have half-a-softball-team of kids. If they want to work, those issues are just reality. One of the many challenges of Indonesian life. One woman (pictured at the top of the post, waiting to make her monthly loan payment) had been a member for 20 years. She owns her own businesses and has seven kids and was welling up in tears telling me about the impact the co-op had made. That without it, she simply wouldn’t have been able to start a company. With it, her business had thrived and she’d never missed a payment.

The co-op’s board member opened my talk with a cross between a cheer and call-and-response prayer. Roughly it translated to:

How are your businesses doing?

“AWESOME!” The women yelled back raising fists in the air.

Are you paying your loans back?

“YOU BETTER BELIEVE IT!” they yelled.

Are you going to default?

“NO WAY!” they yelled, together dismissing the thought physically with an emphatic wave of their hands. As each of them told me their stories, the women clapped at every success milestone– nevermind they’d heard these stories all before.

Back at IWAPI, four of the women told me that not only were their husbands supportive of their companies– they’d done so well that their husbands had quit their jobs and were now working on the wives’ entrepreneurial dreams. Even my Indonesian state department translator was stunned to hear it. “There are two types of IWAPI husbands,” the uber-intense woman in green told me. “Those who are silent partners and support their wives, and those who become actual partners in the business.” Another woman in the group was living the harsh flipside of this statement. Her husband left her a single mother, because she refused to give up her fashion design company and sit at home while he worked. Her life isn’t easy, but she has no doubt she made the right choice.

I don’t mean to paint the picture of some gender utopia. In each case, these were women that opted to attend a talk about entrepreneurship, so it may not be a relative sample of the population.  And to be sure, questions come up about pressure from society to raise kids and men not taking them seriously; the same issues women talk about in the US. When I’ve brought up some of the issues we face, there’s a lot of head nodding in the audience and commiserating laughter. Some of this is just international, it seems.

But the difference among the women I’ve met so far in Indonesia is they just don’t seem to dwell on it. They’ve got more important things to do.

 

An Homage to Digg--a Company and a Story that Changed My Career

Business_week_kevin_rose (Crossposted from TechCrunch.)

Startups in Silicon Valley are like old generals. They don’t die anymore, buoyed on life-rafts of lingering venture capital and modest revenues. They just fade away, eventually purchased for assets that are a shadow of their former promise. It’s pretty clear that Digg is on that path. The company isn’t dead, but it’s been fading away for a while, and its soul is all but gone. The company can spin it however it wants– the final nail in the coffin is news that founder Kevin Rose– long Digg’s greatest asset– is leaving.

I’m traveling in Indonesia, so the news will be old by the time you read this, but you’ll have to forgive another sentimental post. Digg has always represented the spirit of the early Web 2.0 movement to me. Facebook has never been the emblematic company of the Web’s mid-2000 resurgence, because it has always been such an outlier from the pack. But Digg– like Delicious, Six Apart, Flickr, YouTube and others– was one of those messy, risky companies founded at a time when no one was ready to believe in the Web again. The scars from the 2000 bust were too deep. These companies weren’t celebrated like Web startups today– they were mocked. People thought the founders were delusional.

The entrepreneurs were the exact opposite of the kids today seduced by the promises of Y Combinator, easy cash of super angels and lure of TechCrunch headlines. They were doing something that still stank of broken dreams and evaporated billions. And they were doing it for one simple reason: they couldn’t stop themselves.

And Digg was one of the first to prove you could take advantage of a decade of open source development to start a company for dirt cheap, one of the first to prove you didn’t have to be a technical genius to build a great product, and one of the first to prove a rabid community could make a site explode very, very quickly. Digg was never the biggest company of the movement, but it was bigger than many, and it stood for something. It was the everyman. This is why I put Kevin Rose on the cover of BusinessWeek in 2006. It was his first cover, my first cover, and one of the first national magazine covers about the Web 2.0 movement, period.

That cover– with provocative cover language cooked up by my wily New York editors to move copies– sparked a lot of hatred. It was my first brush with controversy, and one of BusinessWeek’s first big blog scandals as well.

But that cover also sparked inspiration, and the credit for that doesn’t go to BusinessWeek or me, it goes to Digg, Jay Adelson and Rose. It was the first time I saw young people reading BusinessWeek around San Francisco. On magazine racks it wasn’t put back with business publications, it was put back next to copies of FHM and Maxim. And recently BleacherReport founder Bryan Goldberg told me that when he read that cover back in 2006 he felt something he’d never felt reading a business magazine or even watching athletes and rockstars–sheer, consuming envy. If this kid– not a genius like Bill Gates, just a kid with an idea– could build Digg, why couldn’t he build what would later become BleacherReport? It was something that pushed him to quit his job and follow his own dream.

Fair disclosure: That cover probably helped me more than anyone. It landed me a book deal that changed my career. And I first met Michael Arrington right after it ran. He introduced himself to me just outside the Web 2.0 conference, and said he liked the story. That friendship changed my career too, and it was the first of many times he’d defend me against haters.

What Arrington got that others didn’t was that these companies and the Web 2.0 movement were only getting started. Among the article’s “outrageously overstated claims” was that YouTube could sell for $500 million. It sold for three times that a month or so later. The article argued Facebook could be worth more than MySpace. Again, that soon proved understated too. And Digg? Well we got Digg exactly right. We said it could sell for between $150 million and $200 million, and over the next few months and years there were several negotiations and at least one solid offer in that exact range. But Digg — unlike peers like Flickr and Delicious– said no, and its best days seemed ahead of it.

So what happened? In my view, Digg had a lot of things right. More than a million people loved its product– rabidly loved it. They loved it in a way we’d rarely seen until that point. Digg had top investors. And it had the vision part, too. Rose’s mission has played out. Digg helped transform how we consume media. While media properties balked at the idea in 2006, share buttons litter the Web today. We no longer rely on media gatekeepers for news. No one tells us what the front page should be– we create our own with the help of our friends.

Unfortunately Twitter is the one that’s pulled the bulk of his vision off, not Digg. It’s another example of what I’ve argued before– that it’s frequently not the company that comes up with something first that nails the execution. (And it might explain why Rose spends so much timeon Twitter.)

The lesson from Digg is crucial as Silicon Valley’s ecosystem has made it easier and easier to start a company. It’s that a great product is necessary but not nearly enough. Building a real company is harder, and it takes execution and leadership. Things like a New York-based CEO and a sometimes-distracted co-founder took a toll on Digg in its most pivotal days. As I wrote in my book a year after that cover, startups reflect their founders’ personalities. Back then, Slide was characterized by silent intensity, Facebook was like a messy, pizza-stained dorm room, and Digg? Well, Digg’s offices were empty most evenings.

I have no doubt that Rose and Adelson are stronger after Digg than they were before. After all, few people remember that before Zynga, Mark Pincus’ Tribe didn’t live up to high expectations either. Like Pincus, I believe they both Rose and Adelson still have their biggest successes ahead of them. Adelson has already moved on with SimpleGeo, and Rose is moving on with a new mystery project.

There will be haters on this post. And that’s fine. But the people who write checks in the Valley have respect for what Digg built, whether the founders fell short or not. Smart people will always want to back these guys– as Mike Maples said on Ask a VC last week– and people like Arrington and me will root for them again.

That’s what makes the Valley such a unique place.

Fertility Coffee: A New Indonesian Cash Crop?

Having already dragged myself, my husband and TechCrunch readers around the world, I'm now doing it with my unborn kid. We landed in Jakarta last Saturday and will spend two weeks traveling around Indonesia for the State Department, speaking and having conversations about how to encourage more entrepreneurship here -- particularly among women. 

According to the Embassy, a focus on entrepreneurship and ecology were the two big takeaways from President Barack Obama's trip to Indonesia last fall-- coincidentally the last time I was in Jakarta. We were checking out of the Shangri-La hotel just as Obama's people were checking in. 

The focus makes a lot of sense: Indonesia has a bad history of coral bombing, deforestation and other ecological sins. It is the fourth largest emitter of greenhouse gases. And the gorgeous land, jungles and beaches are among the country's biggest assets. As far as entrepreneurship goes, more than 50% of the country is under the age of 25-- these people need something to do and entrepreneurship is best way to create large numbers of jobs and goose the average per capital GDP. And women in Southeast Asia generally need more options than falling into the sex trade. 

It's appropriate that this is the baby's first trip, not only because Indonesia is one of our favorite countries in the world. Indonesia may have played a part in conception. Last time we were here we went to visit an old coffee roasting house in Bandung. This old man had been roasting beans there since before I was born, and his father had been there another thirty years before him. All the signage was still in old colonial Dutch. And they still make coffee the same way-- aging the beans in burlap sacks for up to eight years and then roasting them in woodfire ovens. He was utterly dismissive of Starbucks and its modern procedures, and there was a line around the block to get his freshly roasted coffee. 

It was indicative of what I love about Indonesia. The night before we dined with a table of young entrepreneurs who go to Institut Teknologi, the "MIT of Indonesia" for which Bandung is famous, and we talked about who was their favorite CEO. There were no starry-eyed Mark Zuckerberg cop-outs here-- some of these guys gave articulate cases for admiring Larry Ellison or Elon Musk. But as much as the country is surging towards globalized modernity, there are pockets of stubborn resistance like this coffee house. I love those pockets, and Indonesians are fiercely defensive of them. The last thing we need is a world full of only luxury shops, high-rises, and KFCs. 

But back to baby-making. This coffee guru told us they roasted two varieties: Arabica and Robusto, and that both had medicinal uses. We were informed that a "young man" like my husband should not play around with robusto under any circumstances, because it enhances potency. Mr. Lacy didn't quite understand the man's Bahasa-English combo and said, "Oh it'll keep me awake?" To which the guy stretched out both arms gesturing to his crotch and yelled, "YOUR SPERM! YOUR SPERM!" 

My husband doesn't drink coffee. But we did bring several bags back to the US, and I was drinking it daily. We'd been off birth control for a while with no results, and about a week after we got home-- BAM!-- pregnant. Coincidence or Indonesian coffee? 

 

That Thing That Wasn't True Is Finally True

So, here are the facts: I am 35 years old. I have been with my husband for 11 years. There's a tremendous baby boom in the San Francisco startup world. It's no wonder that for the last year rumors keep springing up that I'm pregnant. Scoble started one a few times while I was traveling for my book. I was actually pretty thin in those days, but I was never in the country so people started to believe it. A month or so in town disputed it pretty easily.

Then, when I came home after the hardest, longest push of the book and had gained some travel weight, the rumors started a new. It didn't help that I teased that there was some totally unrelated news in my life I couldn't talk about. (Something I'd never write by the way if I were actually pregnant.)

I kinda let the rumors persist, because I figured if people thought I was pregnant they wouldn't talk about my weight gain. Then finally in November, I said on this blog I wasn't pregnant and that people had misunderstood both. That seemed to quell things.

And then a few weeks later, I got pregnant.

  Sarah_big-news

I'm only saying this now because it's increasingly hard to hide, even with the new desk at TechCrunchTV. Also, I'm going to see 200 of you at my book party tomorrow and I hate when people are too scared to ask because, well, no one ever got slapped for not asking a woman if she was pregnant.

But rest assured, I am NOT becoming a mommy blogger. And while my hormones are convincing me my baby is definitely the most awesome baby in the world, there is a time and place to browbeat friends with that information. It's not here. Ok, well, since we're talking about it, look at this handsome profile once, and then it's not here:

3-3-11_4

I will also never post a picture of my baby as a profile picture on any social network. I've always found that a weird statement, tantamount to saying your baby is your whole identity.

And -- obviously-- I'm still working. I plan to work up until the baby comes, traveling quite a bit for speaking gigs until I'm grounded June 30. (Check my schedule for details; if you want to book me, time and space is running out! I just booked three more gigs over the weekend. Contact my agents here.) This baby will go to more countries before it's born than I went to much of my adult life. And a few weeks after I give birth, I'll hop on a flight to host Beijing Disrupt.

The Speaking Train Is Leaving the Station

I just got back from an awesome week in New York, mostly doing book press and catching up with some old friends. I haven't been to New York in years, and was amazed at how much  cleaner and hassle-free it was than I remembered it. I guess traveling in even bigger developing mega-cities gives you an appreciation for how well run and convenient New York really is.

I scooted over to Boston for a day to meet with my speaking agents at APB. The last we talked I was all about the Valley, so we wanted to go over some keynote topics for colleges, non-profits, corporate and international groups that would leverage the learnings from "Brilliant, Crazy, Cocky." We all wound up talking for several hours, and I hope some nice speaking gigs will come out of it. Actually, a few already have.

I did basically no speaking gigs the last few years because I was so consumed writing the book, but it's time to get back out there. If you've got something and you are interested in booking me, head to the speaking tab at the top of the page.

I'm also doing some author talks at several companies around Silicon Valley. All you have to do is buy books for attendees and they're still pretty cheap on Amazon. Below is a clip reel of a talk I did at Say Media a few weeks ago-- actually the first one I did on the book. (I shrunk the player to fit on here and the TechCrunchTV watermark is HUGE! But you get the idea.)

Meanwhile, I've gotten a few more reviews of the book, some more press in the works, and a big TechCrunch book party in San Francisco next week. Tickets sold out insanely fast, so apologies if you didn't get one. In hindsight, I should have booked a bigger venue, but I underestimated the enthusiasm!

About 24 hours after that party ends I'll be on a plane to Indonesia. Unfortunately, it's not a reporting trip, I'm going on a two-week speaking grant for the State Department to talk specifically about enabling entrepreneurship opportunties for women. I don't know my whole schedule but I know I'm meeting some kids in an entrepreneurship competition that's being turned into a reality show (#awesomeidea) and doing an event with Martha Tilaar the "Indonesian Oprah" as I call her, who I write about in the book. I'm honored to be able to share the stage with her.

Sarah Lacy’s entertaining and informative tour of the world’s fastest growing economies undeniably proves what we’ve known at Endeavor for more than a decade: that impressive and inspiring Entrepreneurs can truly come from anywhere! In taking us on a whirlwind journey bursting with frenetic energy – matched only by that of the amazing entrepreneurs she meets – Lacy gives us an important glimpse into the future of the global economy – a place where the craziest, high-impact entrepreneurs from anywhere and everywhere set the pace.
Brilliant. Crazy. Cocky.

New Book

An unforgettable portrait of the emerging world's entrepreneurial dynamos Brilliant, Crazy, Cocky is the story about that top 1% of people who do more to change their worlds through greed and ambition than politicians, NGOs and nonprofits ever can. This new breed of self-starter is taking local turmoil and turning it into opportunities, making millions, creating thousands of jobs and changing the face of modern entrepreneurship at the same time. To tell this story, Lacy spent forty weeks traveling through Asia, South America and Africa hunting down the most impressive up-and-comers the developed world has never heard of....yet.

Excerpt »

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Srah Lacy

Sarah Lacy is an award-winning reporter who has covered high-growth entrepreneurship for more than fifteen years. She is the founder, CEO and Editor-in-Chief of PandoDaily.com, the site-of-record for the startup ecosystem. She lives in San Francisco.

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