AUSTIN, TEXAS — With tech-savvy entrepreneurs planning their next ventures and pulsating parties packed with digital hipsters, this year's South by Southwest Interactive Festival didn't feel like an event on the verge of Great Depression 2.0.
But underneath it all lingered the reality: Tech company valuations have tanked, venture capital has grown scarce and Americans are obsessed with conserving cash.
Nevertheless, many techies here this week felt, if not quite insulated from the economic shock wave battering the country, then at least hopeful that they could help the recovery.
"There's a feeling of optimism, and out of that comes great new ideas and business models," said Hugh Forrest, who runs the interactive festival.
Attendance at the music and film festivals of SXSW, as it's known, is down this year. But when he's finished reviewing the numbers for the interactive portion, which ended Tuesday, Forrest expects an increase of 10% to 15% over last year's record 9,000 attendees.
Many of the attendee-crafted panels ignored the economy to focus on emerging trends in mobile technology or how to use Facebook, Twitter and other social media.
That didn't stop attendees from trying to learn from previous busts. One session, "What do I do with myself, now that the economy has collapsed?" featured veterans of the dot-com crash of 2000 now running leaner businesses.
Surviving that to see Web 2.0 companies emerge has infused some entrepreneurs with the discipline to make money from their businesses sooner and the confidence that things won't stay bad forever.
"Broke is the new chic," said Bryan Mason of San Francisco, who led a panel that urged people to quit their jobs and start new ventures.
Mason left Web firm Adaptive Path Inc., Jeff Veen left Google Inc., and together they started Small Batch Inc., whose first venture created a new way of looking at Wikipedia information.
"We did a little consulting to put some cash in the bank, and now we pay ourselves a sustenance wage of 25% of our old salaries," Mason said. "We opened an office in the Mission [neighborhood of San Francisco] where we can walk to work, there are cheap burritos all around and you can get $2 beers, and everyone around us is boot-strapped."
Christy Canida, the community and marketing director for Instructables.com, a San Francisco company that gives ideas to do-it-yourselfers, said she and her chief executive agreed to come to SXSW only if they could keep expenses below $1,000.
