Dot.Bomb: You Must Read This Book
(October 26, 2001) I read a great book today, cover-to-cover, and I strongly recommend this book to anyone who wonders what really happened in the dot-com explosion and collapse. Indeed, I'd recommend it to anyone who is interested in business; heck, I recommend it to anyone, period.
The book is called "Dot.Bomb " (beware, it's one of two books released this fall with the same title). The full title is "Dot.Bomb: My Days and Nights at an Internet Goliath," by J. David Kuo. (I decided to buy the book after reading a brief comment about it in the fall issue of Brill's Content magazine.)
Dot Bomb chronicles the rise and fall of Value America, an internet retailer that went public in April 1999. The book starts in the middle: Kuo joined the company as an employee a month after its IPO, so his summary of pre-IPO events is quite condensed and incomplete (if my dot-com experiences are any guide, the pre-IPO times may have been more chaotic). Clearly, much of Kuo's reporting about the first and last days of Value America comes from interviews with fellow Value America employees and investors, and I suspect the book lacks some perspective due to the apparent exclusion of input from anyone technical.
The book is extremely readable, perhaps the best-written non-fiction book I've read this year. (It's definitely a better read than eBoys, a chronicle of activity at a venture capital firm that unfortunately went to press before the dot-com crash was complete; eBoys was the "must read" book I passed along to friends last year, and I strill strongly recommend that book also.)
Of course, I am biased: I have worked as a consultant for several dot-com startups over the past few years, and much of what I read sounded extremely familiar. I shook my head with understanding, and felt like a fellow insider, as I read about the absurd pressures that came from the artificial "internet economics" in which the experts claimed that capturing "revenue" or "customers" was more important than even a remote prospect of profitable operations.
In fairness, I was an early forecaster of Value America's failure. My first internet-marketing consulting client (Bill Lederer at Art.com) referred one of Value America's founders to hire me as a consultant, but after a single exchange of phone messages, I left a follow-up message telling the fellow at Value America that their venture sounded like a scam and I wanted nothing to do with it. That was my gut feeling (perhaps induced more from a chemical imbalance than from any genuine intuition), but after reading Kuo's book, I'm glad I didn't follow up, even if I might have made megabucks from the deal. (Of course, they might've rejected me on the next call, too.)
Kuo's book isn't just fascinating because of what it says about the dot-com craze and the irrational market forces that fueled irrational and schizophrenic actions by companies. It's also a fascinating tale of a charismatic company founder whose greatest strengths are also his greatest weaknesses. It's an insightful tale of human relationships in which people can't tell ugly truths to their friends.
As I mentioned, Kuo is an excellent writer (or else has help from excellent editors). I read the entire book in a single afternoon and evening.
Kuo's report is certainly incomplete, due to his late entry into the company and his obvious reliance on reports from "fellow travelers" who apparently all shared his enthusiasm for the company (which seems almost cult-like). I'm sure some Value America insiders (perhaps all of them) feel mistreated by the account. (More than a decade ago, I read another "rise and fall" book that I found inspiring: I can't recall the title of the book by Neil Harris, who wrote then about his own similarly-traumatic experiences with Jack Tramiel at Commodore and Atari -- where Harris' jobs seemed quite analagous to Kuo's roles at Value America.)
Kuo does a fair job of explaining why the insiders all clung to their dream: they all saw a single decision (belive or don't believe in Value America) and two possible outcomes (success or failure). If we believe and fail, we have the adrenaline-pumping experience. If we believe and succeed, we have vast riches. But if we don't believe, we have nothing. I found this to be a very rational explanation for irrational behavior. Oddly, since Kuo devotes a fair part of the book to discussions religious faith and prayer meetings among the company's founders, I was surprised that he did not close the loop and expressly compare these people's irrational faith in the "unknowable, unprovable" Value America to their faith in God and Christ.
While Kuo clearly reports (in relevant context) his conservative political background, as well as the Republican and Christian leanings of some of the people he writes about, I didn't feel that these intruded or shaded his writing (and as a liberal democratic atheist, I'm pretty sensitive to such biases in the books I read).
In the end, Kuo does not insert any doctrine (religious, economic, or political) into his report about the rise and fall of Value America. He also makes clear that his knowledge is incomplete, and does not seem to try to reach to report on matters that are beyond the combined grasp of his own knowledge and his interview sources.
Anyone who has experienced the "dot-com" and "dot-bomb" business world should enjoy this book. Those who mocked the rise and fall of the dot-com culture will find the book quite validating. Even dot-com millionaires will likely still enjoy reading the book. And in the end, anyone who plans to start a business -- on the internet or on Main Street -- should read this book and at the end of each page, ask yourself, "is this me ?" (or "is this my boss?").