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As always, business has clung to old forms. VCs still seem to want to install a legitimate-looking talking head as the CEO. But increasingly the founders of the company are the real powers, and the grey-headed man installed by the VCs more like a music group's manager than a general.

5. Informality

In New York, the Bubble had dramatic consequences: suits went out of fashion. They made one seem old. So in 1998 powerful New York types were suddenly wearing open-necked shirts and khakis and oval wire-rimmed glasses, just like guys in Santa Clara.

The pendulum has swung back a bit, driven in part by a panicked reaction by the clothing industry. But I'm betting on the open-necked shirts. And this is not as frivolous a question as it might seem. Clothes are important, as all nerds can sense, though they may not realize it consciously.

If you're a nerd, you can understand how important clothes are by asking yourself how you'd feel about a company that made you wear a suit and tie to work. The idea sounds horrible, doesn't it? In fact, horrible far out of proportion to the mere discomfort of wearing such clothes. A company that made programmers wear suits would have something deeply wrong with it.

And what would be wrong would be that how one presented oneself counted more than the quality of one's ideas. That's the problem with formality. Dressing up is not so much bad in itself. The problem is the receptor it binds to: dressing up is inevitably a substitute for good ideas. It is no coincidence that technically inept business types are known as "suits."

Nerds don't just happen to dress informally. They do it too consistently. Consciously or not, they dress informally as a prophylactic measure against stupidity.

6. Nerds

Clothing is only the most visible battleground in the war against formality. Nerds tend to eschew formality of any sort. They're not impressed by one's job title, for example, or any of the other appurtenances of authority.

Indeed, that's practically the definition of a nerd. I found myself talking recently to someone from Hollywood who was planning a show about nerds. I thought it would be useful if I explained what a nerd was. What I came up with was: someone who doesn't expend any effort on marketing himself.

A nerd, in other words, is someone who concentrates on substance. So what's the connection between nerds and technology? Roughly that you can't fool mother nature. In technical matters, you have to get the right answers. If your software miscalculates the path of a space probe, you can't finesse your way out of trouble by saying that your code is patriotic, or avant-garde, or any of the other dodges people use in nontechnical fields.

And as technology becomes increasingly important in the economy, nerd culture is rising with it. Nerds are already a lot cooler than they were when I was a kid. When I was in college in the mid-1980s, "nerd" was still an insult. People who majored in computer science generally tried to conceal it. Now women ask me where they can meet nerds. (The answer that springs to mind is "Usenix," but that would be like drinking from a firehose.)

I have no illusions about why nerd culture is becoming more accepted. It's not because people are realizing that substance is more important than marketing. It's because the nerds are getting rich. But that is not going to change.

7. Options

What makes the nerds rich, usually, is stock options. Now there are moves afoot to make it harder for companies to grant options. To the extent there's some genuine accounting abuse going on, by all means correct it. But don't kill the golden goose. Equity is the fuel that drives technical innovation.

Options are a good idea because (a) they're fair, and (b) they work. Someone who goes to work for a company is (one hopes) adding to its value, and it's only fair to give them a share of it. And as a purely practical measure, people work a lot harder when they have options. I've seen that first hand.

The fact that a few crooks during the Bubble robbed their companies by granting themselves options doesn't mean options are a bad idea. During the railroad boom, some executives enriched themselves by selling watered stock-- by issuing more shares than they said were outstanding. But that doesn't make common stock a bad idea. Crooks just use whatever means are available.


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