Sarah Lacy is a well-known American business reporter and most recently she has covered technology for BusinessWeek. Her book, ‘Once You’re Lucky, Twice You’re Good: The Rebirth of Silicon Valley and the Rise of Web 2.0‘, has received richly mixed reviews. The New York Times called it ‘a disjointed grab bag of gossip’ but others say that the importance of her book is that she was in the Valley throughout the boom, the bust, and the recent recovery.

In 2008 she famously became the story when the capacity crowd turned on her at the South by Southwest technology festival in Austin, Texas accusing her of conducting the key-note interview with Mark Zuckerberg, the founder and CEO of Facebook in an overtly flirty and self-promotional style.

Sarah is also Silicon Valley host of Yahoo Finance’s Tech Ticker and blogs for the tech blog TechCrunch. She lives in San Francisco.

RM:

“Sarah, allow me to touch first on your South-by-Southwest Interactive (SXSWi) interview with Mark Zuckderberg (Facebook creator). Looking through the broadcast for the first time I thought your interview was fine and you asked a lot of questions that put him on the spot, just what a journalist should do. Of course it would have worked if it had been a newspaper or magazine interview. Did you think the crowd were overly partisan to him because of who Mark Zuckderberg is? ”

SL:

“I wouldn’t phrase it as the crowd being partisan towards him, because neither Mark nor I saw it as a “me versus him” thing. He’d asked me to do the interview as a favor to him because we’re very comfortable around each other. All the talk that somehow it was an adversarial exchange between us was as made up by Twitter-ers as reports that I was wearing a mini-skirt. (I wasn’t as everyone can clearly see from the video.) No one was more upset about how the crowd turned on me, and no one was more supportive in the immediate aftermath than Mark was. I can’t really say why it was a controversy. I was stunned then, and I am stunned now. And I’ve gotten thousands of emails from people who watched the video and said they didn’t get why it was a controversy either-about 10,000 by the time I stopped counting. That’s against several hundred negative Twitters, 60% of which were written by three people. So by any math it was a very loud minority. I’m not going to try to climb in those three peoples’ heads — it seems like a disturbing place to be for one thing!

To be fair to them, they’re not alone. There are a lot of people who hate me for whatever reason, so there is undoubtedly something polarizing about what I do or who I am. But 99.99% of them are people who have never met me. So there’s not a lot I can do about it other than just continuing to do what others think I do well and what major news outlets and publishers like BusinessWeek, Yahoo, and Gotham Books pay me to do. It wasn’t the first or last controversy around me, and I always get more work, more fans and closer relationships with sources as a result. So on a human level, it’s heartbreaking, but it’s only made my career stronger. ”

RM:

“What’s your explanation of why social networking has been so successful? Is it so far off what Doug Englebart was trying to achieve with his idea of augmentation, that you could use machines to augment the power of the human mind? ”

SL:

“My argument is that social networking pulls on three really important levers that are so hard-wired into what humans need and want that we keep coming back, frequently several times a day. The first is convenience, the second is connection and the third is validation. Convenience was a big part of why the first generation Internet companies took off-remember the wow factor the first time you ordered a book online or booked a plane ticket? No one would give up that convenience now. Similarly sites like Facebook and LinkedIn help us find or stay in touch to people whether they move, change jobs, get divorced, or have any other life change without us having to lift a finger. That too is about convenience. But it’s really connection-the actual bonds formed, rekindled and explored via these sites- and validation-people adding you as a friend, Digging your story, liking your photo on Flickr- that up the addiction factor on these sites. Almost everyone’s social networking “a ha!” moment is something that is seemingly trivial but ties back into one, two or three of these levers and gives us a huge endorphin rush-one far greater than buying a book online, or booking a plane ticket. ”

RM:

“Your Businessweek.com column Valley Girl is a tie-up of technology, business and culture. Do you think that all three are essential to understanding the modern IT industry? ”

SL:

“I think it’s essential to understanding the Web, which is what the column focuses on. Most Web companies-especially consumer Web companies-aren’t solely about technology anymore. They are about media, creativity, connection and pop culture. The very nature of the term the “social” Web shows how integral culture is to these companies. And as for the business leg of the stool, well, at some point they’ve all got to find a way to make money, and that’s a challenge since a lot of these are free products. The most intriguing Web companies and stories are cases where all three of these elements come together. ”

RM:

“One of your recent columns tackled the thorny issue of women in technology, particularly about the lack of women running technology companies. Do you think women that there’s a general lack of advice, finance and support for women entering business and has Web 2.0 has really changed the way a technology business can be started? ”

SL:

“I don’t think there’s any conscious conspiracy to keep women down. I think a lot of it goes back to the Valley’s roots in science and math; fewer women have historically graduated in those areas in the U.S. But I think it also comes down to work-life balance. Running a technology company-especially a venture-funded start-up-is a 24/7 job and a lot of women want to have families. A lot of men have kids, too, but the ones I know who are CEOs of start-ups don’t see them very much. That’s not acceptable to many women.

In fact, I work for myself, and as a result I don’t have kids. It would be impossible for me to travel around the world meeting entrepreneurs, and go to dinners until the wee hours of the morning, then turn around and shoot an interview for yahoo at 7 a.m. the next morning if I were pregnant or had a young child, even if I had a stay-at-home husband. Consider one of the most high-profile women in the Valley right now, Carol Bartz, the new CEO of Yahoo. She quit Autodesk several years ago in part because it was a pivotal time for her daughter and she wanted to be there for her. She also had to rely on an army of drivers, nannies etc. to be a mom and a CEO-a lot of women trying to start a business don’t have that luxury.

The tech industry can also be a hard place if you’re a woman, now that we live in an age of the blogosphere. After my South-by-Southwest interview, I had a young, female business reporter tell me that she was going to change professions after seeing what I’d gone through on stage, because she realized that kind of objectification just never stops no matter how much you achieve. And I’m hardly an important figure in this scene; it’s a million times worse for someone trying to start a company. Indeed, I have to prove myself to people every single day of my life. But I don’t mind it, because I think it only makes me a better reporter and a better writer. I don’t have the luxury to get lazy. This is why a lot of the women who do thrive in tech are so incredibly impressive. The mediocre ones get weeded out in a way the mediocre men don’t always. ”

RM:

“I read a report last year that claimed a drink and drug culture among IT workers in the US is stronger than ever and workers over-indulged to cope with long hours, stress and to find a new way of doing things. Do you recognise the industry from that description? Is it something you’ve ever come across? ”

SL:

“Nope, never in fact. People have a good time and a few drinks, but I never see binge drinking and never see hard-core drug use in Silicon Valley. Most entrepreneurs I know can’t spare the time for a bender, because they usually go back and work after a dinner or a party, and they are too smart to think they can just get through one all-nighter by doing cocaine, because their lives are all-nighter-after-all-nighter. The closest thing I see is people getting Provigil and Ambien prescriptions from their doctors, mostly so they can adjust to time changes for international travel, since they frequently don’t have the luxury to adjust to new time zones naturally. Maybe it’s not healthy, but it’s pretty benign and about as dorky a “drug habit” as you can have! ”

RM:

“Your book The Re-Birth of Silicon Valley and the Rise of Web 2.0 charts the dot.com boom and bust years leading up to IT industry today. It’s a terrific story but what for you are it’s main themes ? ”

SL:

“Part of the reason I wrote the book was to explain how this wave grew out of the carnage of the crash. Because so many reporters stopped covering the Web it was a story that was untold and I was lucky enough to have great access to the main people driving the Web 2.0 movement.

At the time there were a ton of press reports about web 2.0 being “just like 1999” and nothing could be farther from the truth. In fact, the crash weighed heavily on nearly everything about this wave of companies: The fact that they are engineering-centric not sales-centric. The fact that more creative geeks were starting them, not sheer coding geniuses. The role they play in leveraging off of “community.” And on the adoption side, how they leverage all those human needs and emotions I spoke about above.

As I say in the book, I think this wave of companies have transformed society and our lives than the 1999-ish wave, but there will probably be fewer big public companies to emerge from it.

In addition, one thing I didn’t realize when I was writing the book is how much it’s almost a manual for would-be entrepreneurs. Because there is so much board-room level detail of decisions that the founders of Facebook, Slide, Twitter and Digg made and the choices they wrestled with it’s a tremendous source of information on mistakes to avoid in raising money, starting a business and structuring that business. The bulk of emails and letters I get from people are young entrepreneurs who found the book helpful or inspiring in this way. In fact, two colleges in the U.S. have already started teaching it in their entrepreneurship classes. I think that will be the real staying power of the book, and that makes me really happy. ”

RM:

“The 1960s saw the birth of the modern hacker ethic: that information should be free, authority is suspect, and merit trumps credentials. Why do you think these values persisted so long in the computing world? ”

SL:

“I think most computer people are misfits and outcasts and found their own society and equals on the Web or in places like the Valley. Because they didn’t necessarily fit into traditional cliques at school or a buttoned-down company, they rejected those values. Instead, their own societies had values that were based on merit, smarts, hard work and equality. I’ve noticed also that true entrepreneurs love to cheat. It’s not malicious or nefarious; they just see it as a challenge, as a way to prove they are smarter than the next guy. Every time you play a game with an entrepreneur you have to be very careful to spell out the rules! Most entrepreneurs I know base friendships on people who are smarter than them, because they like to be continually challenged. That’s part of what makes them so successful. ”

RM:

“Have you met any of the computer pioneers such as Doug Englebart or Bill Duvall who sent the first ARPAnet message? I wonder how they feel today about that seminal work? ”

SL:

“I haven’t-I got to the Valley in about 1999 so I was a little late to the very early Internet days. But I think it’s so important to remember what those early days where like whether it was ARPAnet or Mosaic or even the early days of directories like Yahoo. We’ve come so far in a very short period of time. There’s a myth that people don’t adopt new technologies but if you look at how quickly the Web has become absolutely crucial in our work lives, and now with Web 2.0, our social lives, I think that myth is really disproven. Of course, turning that into a viable business is another thing. I think consumers tend to adopt things before, say, advertisers do, in many cases. ”

RM:

“The pioneer ethic didn’t really coexist with the entrepreneurial urge to make money, do you find this has changed? And do you think there’s a rush to make money at the expense of quality? That today we have this world where everyone wants to build a platform that lots of third parties are going to build on top of. ”

SL:

“Yes and no. Money is clearly a big part of Silicon Valley. But not in the way it is in New York or LA. People don’t drive flashy cars, wear $10,000 dresses to society galas, or generally live very ostentatiously. There will always be entrepreneurs who get into the start-up game for money, and certainly once a start-up hits you can see people flocking there for the stock options. But most of the very successful entrepreneurs start companies because they can’t not start a company. It’s not a particularly glamorous life after all. It’s a lot of hard work and the odds are you will fail. To most people money is about keeping score on how well you did. One reason that recessions are so beneficial to Silicon Valley is it weeds out the people here only for the money. ”

RM:

“Who to your mind is the better business genius – Steve Jobs or Bill Gates? And why? ”

SL:

“In terms of business genius, I’d have to say Bill Gates. Steve Jobs is more of a creative genius who learned to be a business genius through his experiences getting kicked out of his own company, running and struggling at Next, spotting and investing in Pixar and later, coming back to Apple and taking it on the amazing run of the last ten years or so.

But Bill Gates got how to build a business that people couldn’t live without even if they wanted to. He got how to create a legitimate empire and really, it’s more Bill Gates than Steve Jobs who is responsible for putting a computer in every home in America. Most everyone would say Apple’s products are better. But Microsoft is bigger. It takes a true business genius – some would say evil genius-to win with a worse product.