Under the Mattress

In this tough economy, what are you going to do with 'entrepreneurial' tech dollars-- sleep on the money?

• By Katherine Grayson
• 04/01/09

The way things are going in this economy, many of us are no longer so sure we want to put our money in a bank-- any bank. That was a joke at first, but now it's not so funny. Just when you think you've found a stalwart banker to stand by your funds, oops! He's standing in line at the bailout bin with murmurs of nationalization swirling around him. Yes, the FDIC insures your money and the FDIC is not going anywhere. At least we don't think so.

With all this consumer paranoia, is it any wonder the higher ed tech consumer is a bit jittery these days, too? And maybe he has a right to be.

In recent months, two innovative entrants to the campus technology market-- Cdigix and Ruckus Networks, both electronic media services-- closed down with barely a whimper, leaving campus CIOs everywhere wondering which other "young" tech vendors might be next. (Cdigix President and COO Mark Brodsky regretted that his six-yearold company was "a casualty of the economic times," and Ruckus Networks only offered the website message "Unfortunately, the Ruckus service will no longer be provided. Thanks.")

Without a doubt, both of these young vendors occupied a space (music and media downloads for students) that was plagued by ills such as copyright infringement and platform issues. But early on, that didn't seem so daunting: In more stable times, startup companies could find the financing to weather glitches that might persist for a few or even five years.

Not so in this new, nebulous economy. Which raises questions not only for startups in the music- and mediadownload business but, to my mind, for companies in any tech sector that beckons entrepreneurs to go where no man has gone before.

Unhappily, business shutdowns like those of Cdigix and Ruckus may set in motion a real hesitancy for campus tech entrepreneurs to bravely venture forth, just at a time when a) students are clamoring for more sophisticated tools and services than ever before, b) more of them may be turning to remote learning technologies to continue or finish their education, and c) more campuses may be requiring such tools to assist student populations with (in this economy) rapidly changing needs.

Then, too, there are the issues of current campus relationships with entrepreneurial tech solution providers. What happens to the maintenance of and investment in those relationships, when those vendors are swallowed up by market dominators or they simply shut their doors?

Okay, call me Henny Penny and tell me that the sky isn't falling quite so fast. But these are things to ponder as you consider new investments in campus tech tools and either opt for generic (to be safe), or shell out for new ventures-- and worry if they'll be there tomorrow.

I've got no suggestions today, as we're all wandering through virgin economic territory. But I do think we should wander with our eyes open.

--Katherine Grayson, Editor-In-Chief
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