The dotcom bubble officially popped during 2000's SXSW Interactive, when the Nasdaq peaked at 5,046 and quickly went into a free fall. Registrations dropped off for the 2001 and 2002 conferences, settling at just over 3,000, where it would more or less sit all the way until 2006.
Derek Powazek, production manager, HotWired; creator, Fray.com; creative director; blogger: It just felt like everything was falling apart. There was that feeling of, like, "Maybe this is over. We had a good run and now it's going to be something else."
Paco Nathan, cofounder, Fringeware (now chief scientist, Mesosphere): The bust hit and the following year SXSW was really great because hardly anybody was there, but the people who were there were actually practitioners and they were pretty damn good.
Peggy Ellithorpe, volunteer manager, SXSW, 1994–2004: The tech bust affected not only Interactive, but heavily affected Music because the record labels weren't spending any money on conferences. Those were very tough years for SXSW to continue to operate. The directors took pay cuts, and they turned off our 401(k) matching. We were all given the right to take three months off, unpaid, with the guarantee that our jobs would be there.
Hugh Forrest, director, SXSW Interactive: They were some lean years. That was the first time we laid off any staff at SXSW.
Ellithorpe: The years got really hard after that first tech crash. We spent many late nights in the colder months here in the Austin offices—which was a house—just working, burning the midnight oil. Doing events like that, they really wear you down. When you put in 150%, and you know your whole team is doing that, and the money just isn't rolling in because the economy crashed, it's demoralizing. Those years were so hard on Hugh. He may not want me to say this, but I know he wanted to quit. He wanted to quit so badly.
Forrest: I have said that many times and will probably say it two or three times today to my staff: I'm a quitter! [Laughs] Roland always felt we were on the right course. He was more optimistic than I was. I remember thinking to myself and saying to other people, "I don't see a light at the end of this tunnel." There was a certain degree of frustration. It just seemed like we were yelling into an empty room. What are we going to do to change all that? In the summer of 2004, I had what might be termed a personal crisis; I moved away from Austin and essentially took a leave of absence from SXSW. Shawn [O'Keefe] was leading most of the day-to-day operations in my absence. I read a ton of self-help books and learned to meditate. I know that reading those books and learning to meditate were essential to adopting a more community-centric approach for SXSW. There are strong parallels between new-age values and the open-source movement.
While SXSW was struggling to remain financially viable, it began to find some creative vitality, thanks to the efforts of a small group of bloggers, designers, and budding entrepreneurs.
Lane Becker, blogger and longtime attendee: If you believed that the web was about more than just the transactions, SXSW in the late '90s and early 2000s, especially after the dotcom boom, was the place to go. The only people still paying attention to what was happening online were the people who congregated at SXSW and were asking this question about what is the web as a medium for personal expression. That group sustained SXSW, and SXSW sustained that group over the next four years.
John Halcyon Styn, blogger; cofounder, Hug Nation: I was blogging—not blogging, but putting things into a weekly story as part of a network of independent publishers—in 1996-ish. At the time, there weren't that many independent publishers. People like Jason Kottke, Derek Powazek, and Jeffery Zeldman; we were all on this email list. I was talking at SXSW about how to run a successful web zine. It was a time when I was in San Diego, and there was not a huge awareness of the web there. I remember being at parties and hearing somebody say, "w-w-w," and I'd go approach them. So SXSW was this magnet for all these people who not only knew and were a part of this huge wave, but they were building it and imagining it.
Powazek: I was working at Blogger and we launched right before SXSW. I want to say this was '99. Blogger was the talk of SXSW.
Meg Hourihan, cofounder, Blogger: Ev Williams, the cofounder of Blogger, had been to SXSW with some of his friends from Nebraska in '99. I didn't go. In 2000, Blogger was really taking off. We had a lot of users and had built up a really nice community of people supporting us. Derek Powazek convinced Hugh Forrest that weblogs were becoming important and there needed to be a panel on it. So Derek organized what was called the Weblogs Roundtable and invited me to speak. That's the first public speaking I had ever done.
Evan Williams, cofounder, Blogger; cofounder, Twitter: The whole Blogger team went in 2000. I suspect we wanted to boost Blogger, as well as just mix and mingle with those in our community of early web geeks. Meg had been asked to be on a panel about weblogs, which may have been the first one at any conference ever.
Powazek: I have the distinction of saying I held the first panel about weblogs at SXSW. It was Jason Kottke of Kottke.org, Matt Haughey from Metafilter, Meg Hourihan, and me. Ben Brown stood up and delivered an impassioned plea about how blogs would destroy the Internet. [Laughs] Because he wanted the Internet to be about 3,000-word storytelling, and blogs were, you know, ruining all that.
Hourihan: Jason Kottke, who's now my husband, that was sort of how I met him. He was the other speaker on that panel. I knew who he was—we had emailed a little—and I had been reading his site forever. That was one of the really exciting things about going to SXSW, meeting these famous bloggers, like Jason, John Styn, Anil Dash, and Heather Champ.
Styn: That was a special time. Everyone felt like peers. I remember when Ev Williams brought Blogger T-shirts to one of the after-parties. I was wearing a women's Blogger shirt around the party and people were taking pictures of me. I felt like I was doing him a favor. I had just hosted the Web Awards. Everyone knew who I was. A few years later, there were these crowds of people around Ev. Everybody wanted a favor from him. I don't know if we spoke after that.
Williams: For me, it was a chance to meet people from the web whom I admired—although I didn't get as much of a chance to do that as I'd hoped. When we were already planning to go, I got asked to be on a panel at Esther Dyson's PC Forum conference in Arizona, which overlapped. So I ended up going to Austin for 24 hours, flying to Arizona for PC Forum, and then going back to Austin to hang out with the team for the music part of SXSW. The motivation for going back was just fun.
Becker: You look at the people who were there at SXSW then, it's like a who's who of people that did stuff on the web. Ev would obviously go on to start Twitter. My company, Adaptive Path, I met half the people I started that company with at SXSW—Jeff Veen, Peter Merholz. Folks from HotWired were there, the people who would go on to start Flickr. Anil Dash was there.
Anil Dash, blogger; new-media development, Village Voice Media; VP, Six Apart (now CEO, ThinkUp): The first time I went was 2001. I'd been following it when it was still Multimedia. It was about CD-ROMs and Macromedia in the late '90s, so I felt like, "I like the Internet. This isn't for that." I tuned it out. Then in 2000, the early team at Pyra, the company that made Blogger, all said they were going. That was the declaration of, "We're all sort of adopting this event." In 2000, I was broke and couldn't go. There was a core of 20 to 25 bloggers who were there in 2000. By 2001, there were, maybe, 50 of us.
Stewart Butterfield, cofounder, Flickr (now cofounder and president, Tiny Speck): Up to the early part of 2000, I was working at a consultancy, doing web-development stuff. On the side, I had been writing a blog since '99. It seemed to me, at the time, that SXSW was the center of all the big, innovative risk taking and experimental art online—the writing, the personal site management, the blogging, and also all the cool web design. It was the elite of the web industry but not in the sense of the ones who had raised the most money for their startup, but in the sense of the people who were the voices I liked listening to online.
Dash: One of the most critical people to bring the community together from 2000 on was Brad Graham. Brad passed away [in 2010]. He was probably one of the first dozen bloggers on the Internet and the first prominent gay voice. He's also the guy that coined the term blogosphere. Brad's an incredible, seminal figure who has been overlooked.
Deb Schultz, VP of marketing, new media, and technology, Wall Street Rising; director of marketing, Six Apart (now cofounder, Yes by Yes Yes): Thinking about the character of what South By was back then, it was creative. People might've been doing stuff in business, working with big companies, but they had a creative, indie sort of affect to what they were doing. And it was a smaller community. It was the one time of year, the one conference, that got everyone together.
Dash: In 2001, there was a launch party for Adaptive Path. That was the first time anyone did a launch at SXSW. They rented out part of a bar like Brad had done. It was such a radical idea in 2001. There were no startups launching, period. The consumer web was dead. The idea that somebody—let alone someone in our community—would be buying drinks for people was incredible. They were good friends of Ev Williams. That's why, more than any other reason, it occurred to Twitter to have a launch at SXSW—five years prior, their friends had done the same thing. This was a community where we had always done this. That first party was the first time where it was a place we were all going to go; someone is going to buy us drinks and we can cut loose. Also, the celebratory act of someone launching something was a really big deal. Our friends were risking their careers and savings. It was a different thing from when VCs paid for the party.
Jason Goldman, business manager, Blogger; VP of product, Twitter (now cofounder and COO, Obvious Corp.): I first went in 2003 because that was post-Blogger's acquisition by Google. We were acquired in February 2003. I remember when we got to Google it was sort of a priority to get funding to go throw a party at SXSW. Ev had been going there for a long time, and it was like, "Look, this is what we do. We go to this conference. This is where all of our people are. It's our one thing." Google had never heard of SXSW in 2003. It wasn't on Google's radar. Going with Ev in that post-acquisition time was awesome, because it was like one of the community's own had won. We were able to throw a nice party and give away a lot of swag.
Dash: In the sessions in '02–'03, the architecture of the social web is being created. We were talking about, "Should we have comments on a website? If we do, what would they look like? If we're going to deliver real-time notifications on the site being updated, what would they look like?" There would be an entire session about people having an avatar to show they're online. That seems trivial now that a billion people in the world have one. I feel like this was that passing of the torch from the presocial era of the web to the blogging and social networking era. That sort of thing doesn't happen without some dialogue and some sort of social context where people bounce these ideas off each other.
Heather Gold, blogger, writer, comedian: I credit that SXSW scene with giving birth to what is called web 2.0. People were talking about community when there were zero clear business models. It was an academic conversation. What we were doing felt important to us. All these people had a religious conviction from the beginning.
Butterfield: I knew it was going to be important and that the kinds of things we were doing—i.e., using the Internet as our primary means of social interaction—were something. But I still wasn't able to extrapolate from my mind what it would end up looking like, say, five or seven years later.
Gold: Once Flickr started happening, it was clear everything was going to a completely different place. Because of Flickr, companies had social media departments and had budgets. It spawned its own astronomical growth.
Becker: All of that happened because there was this group that was very invested in the web as an idea, a place of opportunity, exploration, expression, whatever it might be. Those people had gotten to know one another and care about each other through the venue that is SXSW Interactive.
Gold: The thing that I liked and cared about is that none of these people were interested just because they were making a lot of money. I would definitely put Ev Williams in that category. Most of these people I described at SXSW are artists in a way. Lou Reed just died. He was not the richest musician. Brian Eno said everybody who bought an early Lou Reed album made a band. In early times, there were not that many bands. We were like that era of the web. To me, this was our CBGB.
Becker: It was a pretty magic time. Everything from the Algonquin Round Table to the Frankfurt School in Germany to the origin story of Saturday Night Live or Black Mountain College in North Carolina—all of these places are really significant crucible moments, and that was what was going on with SXSW in terms of people caring about something, inventing a technology, thinking that it was going to have an implication for the world. It was a set of people and cultural circumstances, and a particularly intense time that gave birth to a bunch of critically important things.
Hourihan: Huge stuff came out of what appeared to be a dormant period on the web. The dotcom landscape was completely decimated and it actually became this environment for all these new, interesting companies. A lot of that did come out of that time and those connections that people made at the conference.
Becker: If you look at the way that the world works now, you can point to very specific things, like Twitter and blogging and the changes that are happening in the music and publishing industries, and you can actually point to this set of people, this set of thinking, and the stuff that came out of it and say, "Holy shit. That worked." That moment was amazing and that moment will never come back, not in that way. For a different set of people, at a different time, for different reasons, something else will happen, but that was ours. That was the moment that we had, and that was pretty fantastic.
This is an excerpt from our new e-book, SXSWi Uncensored: The Complete Oral History as Told by the Entrepreneurs, Geeks, and Dreamers who Remade the Web. Author David Peisner led a team of Fast Company reporters who interviewed more than 100 people to compile—for the first time—the definitive story of the festival. Now available on iBooks or on Amazon.