Tech start-up scene poised for revival

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techniques of Really Simple Syndication (RSS), blogs and podcasting also are interesting, he said. "The things programmers do in their spare time often relate to the very opportunities we're starting companies around," he said.

Also in demand at start-ups these days are the network administration or database chops that come from working at a company like eBay, Roden said. "There's a shortage of information technology people who have experience managing high volumes of electronic transactions," she said.

All this start-up activity, however, doesn't seem likely to trigger a torrent of new tech jobs for Americans. Newbie companies tend to have limited job openings, Heesen said. "You don't need too many folks when you're working out of your garage or in an incubator," he said.

What's more, many of today's start-ups send some of their development work to lower-wage nations, according to Shawn Carolan, managing director at venture capital firm Menlo Ventures. Carolan said probably more than half of software start-ups ship work offshore. "It's often a small percentage" of the work, Carolan said, "15 to 20 percent perhaps."

The fact that many nascent companies distribute their work across different locations--including to various parts of the United States--marks "a seismic shift from a few years ago," Jadallah said.

The change has come as telecommunications costs have dropped, collaborative technologies such as instant messaging have emerged, and companies have found that they can develop software in India for roughly half of what it costs in the United States.

India-based Persistent Systems is benefiting from this trend. The company, which assists both start-up and established software companies in developing their products, added nearly 950 employees in the past year, for a total of 1,700. A typical software start-up may begin with 20 to 30 of its own in-house engineers in the United States and five or six Persistent engineers working out of India, said Ravi Krishnamurthy, president of Persistent's U.S. subsidiary. As the customer and Persistent grow more comfortable with each other over the course of a year or so, the Indian head count may jump to 30 or 40 engineers.

This approach suggests that tech jobs that may have remained in the United States in the past are migrating offshore--a major concern of some technology professionals. But working with Persistent doesn't mean U.S. software developers at start-ups lose their jobs. The company says the same U.S. workers typically move to higher-level jobs, such as product management and design.

By tapping the skills of offshore developers in India for tasks such as research and design, quality assurance and documentation, new U.S. companies can reap benefits, such as getting their products to market faster, according to Persistent.

But there's some skepticism in the VC community about sending a start-up's work halfway around the world. It's not simple to manage far-flung projects well, and start-ups can miss out on the benefits of watercooler conversations, Jadallah argues. "If you do it purely as a cost-driven thing, without the background or expertise, you never (get) the cost-savings you anticipate," he said.

Bonomi said that beginning in 2006 his company may hire some software developers offshore. But even then the "core" work on the product would be done in the United States, where his client base of largely rural telecommunications companies is located. "We are really developing brand-new technology," he said. "It requires a very close interaction with customers."

On the other hand, his U.S. hiring strategy is a far cry from the days of snapping up engineering talent as fast as he could. Borrowing a concept from Michael Dell and his lean manufacturing method, Bonomi says he's doing "just-in-time" software development. For instance, he knows he'll need more programmers to ensure that his code can handle 1 million video subscribers, up from the 100,000 he knows it can handle today. But, he said, "That problem is a problem we're going to face in six months."

Even if this generation of tech start-ups is hiring in a more guarded fashion than the last one did, today's new companies could well generate plenty of U.S. jobs over time, argues Heesen of the National Venture Capital Association. After all, he said, one in 10 Americans works for a company that was once venture-backed. "These are the next FedExes, Genentechs, Intels, Googles and eBays," he said.