What a difference a year makes.

Last year the stock market was just cresting, energy was affordable and casual wear was in. Bill Gross at Idealab in Pasadena could do no wrong, and Toby Lenk was confident that his eToys would burst through the Christmas season.

Today, once-cocky investors are licking their wounds, ever hopeful for a sustained rebound; energy prices have skyrocketed; and dark suits are coming out of the closet. Bill Gross has faded into Bill Who?, and Toby Lenk could use a new job after shutting down eToys in February.

Welcome to the new L.A., where back to basics is making a comeback and the bottom line rules.

"We defied gravity for a long time," said Andy Knox, a managing director for Korn/Ferry International, an executive search firm in Los Angeles that has seen an increased demand for seasoned executives who have successfully navigated through several economic cycles.

"There is a sobering sense of reality," said Jeffrey Starr, a general partner in Mission Ventures, a venture capital company with offices in Los Angeles, Orange County and San Diego.

"The good old-fashioned way of investing is back with a vengeance. We definitely have the New Economy, but we have an Old-Economy matrix."

We also have frugality, pink slips, and a Nasdaq struggling to climb out of the gutter.

Historians are going to have a field day documenting the sharp rise and fall that the economy had at the beginning of this century. And Los Angeles will have its own chapter, as writers and actors threaten to strike, more dot-coms fizzle and high natural gas prices push companies to the edge of bankruptcy.

"The whole tenor of the situation has changed dramatically," said Jack Kyser, chief economist for the Los Angeles Economic Development Corp.

The changes are seen throughout the area. Ostentatious business luncheons have been replaced with fast-food, sack lunches and eating at your desk, as hard work prevails among those who are still working.

Humble meals

"We are seeing a lot more of the delivery-to-go thing," said Dick Carter, a retail restaurant expert at Centers Business Management in Studio City. "The lunch hour is no longer an hour."

When there is an hour, lunch isn't held at five-star restaurants. "Being frugal and cost conscious is definitely in style again," said venture capitalist Starr. "When we meet with our portfolio companies for lunch, we want to set a clear example by meeting in diners and fast-food restaurants. There's an overall atmosphere of, 'Let's put our money in the business.'"

Frugality is spilling over into consumer spending. As workers fret about joining the ranks of the unemployed, they are thinking twice about splurging on frivolous trinkets and trips and concentrating on the practical.

Gas-guzzling sports utility vehicles are a thing of the past, while smart compact sedans are in.

The hot zip code is no longer pricey Santa Monica but affordable Echo Park. And wardrobes are being recycled, with basic colors like beige and black now back in style. "People are not spending as much as they were before on their clothes," noted Annie Spong, a stylist with the Cloutier Agency in Santa Monica. "People are trying to rework what they have in their closets instead of putting together brand new clothes. There is more vintage clothing and more of an eclectic look."

Extremely casual wear is out. And business suits, believe it or not, are inching back into the sartorial line-up for some workers who are reconsidering the "Dress for Success" theory.

"I think the dot-com casual wear will remain on Fridays, but frankly I think casual wear is starting to step back," said Larry Kosmont, president and chief executive of Kosmont Partners, a real estate consulting firm. "I'm seeing more suits downtown."

Looking spiffy

Even in the tech world, executives are tidying up. "I think the idea of people looking sloppy and unprofessional is going away," said Starr. "People are going to focus on looking professional and acting professional. During the euphoric period of 1999 and 2000, there was an emphasis to make your company office look like a recreation center or a playground. No more."

Seriousness will rule the day at all companies. "The strongest firms are getting back to basics and creating value for their customers and society," said Joel Balbien, a managing member at Smart Technology Ventures III, a venture capital company.

VC firms are interested in investing in companies with sound business plans, experienced management teams and can provide a return on investment soon.

"Venture capitalists have learned a valuable lesson now that the bubble has burst and the euphoric period is over," said Starr of Mission Ventures. "It is a mistake to jump on every buzz word, fashion or trend, or invest in every flavor of the month."

There is still an emphasis on investing in technology, but today's dollars are going into technology that is practical. Los Angeles venture capitalists are especially interested in investing in companies that develop energy devices, such as on-site power generators for shopping centers, industrial parks and large factories.

Or companies that develop energy-efficient lighting that are powered with semiconductor chips.

Investors are interested in "nanotechnology," which makes everything smaller, more efficient, and less expensive. They are also looking at companies that will be able to deliver wireless Internet service to small handheld devices.

"The cost of capital has obviously gone up and the level of VC activity overall has slowed down," said venture capitalist Balbien. "But it doesn't stop venture capital firms from cutting deals and moving forward."

They're just more cautious about catching the next technology wave that could come crashing down unless sound business models are followed, just like in the good old days.

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