Dot.Bomb (J. David Kuo)
(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?”).
Disclaimer: The book links to Amazon.com are affiliate links (paid advertising).
I just finished reading David Kuo’s second book, Tempting Faith, which was published in 2006. When I wrote my review of Dot.Bomb in 2001, I had no idea that Kuo was then working in the Bush White House. I only learned of Kuo’s second book last year, when I saw it in the remainder section at a bookstore — and I actually chose not to buy it for $5. Last Friday, though, I found the paperback edition at the 99-cent store, and I bought it. I spent the last three days reading it.
It’s definitely not as enjoyable as Dot.Bomb, and it shared some of the flaws of the earlier book; it includes only sketchy portions of many events (this time, including events where Kuo was present).
This book is about (and isn’t about) the Bush White House, faith-based charities, and (I think) Kuo’s own conclusion that his noble efforts were not just unsuccessful, but were co-opted for pure political benefits. Arguably, the book is about the frustration of politics, or about “the gridlock in Washington” (a timely topic, with today’s announcement of yet another Senator choosing not to seek re-election because of the animosity and gridlock). In the end, I just have to say that it’s a book about David Kuo’s journey.
In certain ways, I found this book less similar to Dot.Bomb than to “the other book about Value America” (In the Company of Good and Evil, the hate-filled book written by Craig Winn and Rex Scatena). No, Kuo’s book isn’t hateful or angry — but it contains admissions that reflect quite poorly on the author’s own character (at the time).
Unlike Winn, Kuo is acutely aware of the contradiction, and plainly shows his struggle with the “right thing to do.” I didn’t find his “solution” (a “fast” from political involvement) very satisfying, and in many ways it’s just confusing.
In my Dot.Bomb review, I described the book as “a fascinating tale of [a person] 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.”
Ironically, Kuo’s second book is about exactly the same thing — except that now he is the person “whose greatest strengths are also his greatest weaknesses,” and now he is the person “who can’t tell ugly truths” to a friend (here, the President of the United States).
I don’t particularly recommend Tempting Faith — I didn’t find it very enjoyable, entertaining, educational, or useful. But I did finish reading the entire book because I respected the author’s intent to share his experience — not just the facts and events, but his emotional turmoil — and he admits to behavior that I consider quite sad, even pathetic. (We’ve all been sad and pathetic, at times, but most of us try to hide it.)
As I wrote in my earlier of Dot.Bomb, there are many reasons I “should have expected” to dislike Kuo’s writing: his conservative Christian perspective seems completely at odds with my views as an atheist and a liberal democrat. In the first book, this was just a “sideshow,” but Tempting Faith is all about Kuo’s Christian faith (and the ways he seeks to act on his personal Christian values, through conservative political efforts and later as a White House aide).
If I’d read Kuo’s book before the 2008 election, I’d probably have been much more hostile and angry.
But somehow I finished this book feeling that Kuo and I probably share most of the same core values. (That shouldn’t be a surprise, because nearly everyone on the planet probably shares most of the same core values — though it’s often hard to recognize this because political strategists [including Kuo] seek to emphasize, exaggerate, or misrepresent our differences in order to exploit them.)
I took a few minutes today to search out “what Kuo’s been doing” since 2008, when he wrote the “Afterword for the Paperback edition.” It appears that in 2008 he did choose to “fast from politics” — he ceased posting to his BeliefNet blog, and the business he worked for shut its doors.
I hope David Kuo is still striving to find a satisfying way to act on his values. I hope I am, too.