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The Worst Of Times
I've read one-too-many tech boom-to-bust sob stories lately and now I have the urge to just summarize them all as follows:
I got my ticket on the tech boom gravy train back in 1997 when a stranger I had shared a taxi with pitched me a leading technical position at his new start-up company, Yellow River. The next day I was interviewing for the job in his top-floor mid-town office suite overlooking the Bay. I was asked who invented the dumbwaiter (luckily I knew it was Thomas Jefferson) and how to best move a flock of sheep between two moving icebergs, and before I could answer I was hired.
Rick, our CEO, and his college drinking buddies had a revolutionary idea that was going to change the world. All they needed was more investors, 300 programmers, 200 administrative staffers, a mile of warehousing space, a fleet of private jets, and a few international trade treaties to be rewritten. Our software afterall would forever change the way people adjust the brightness and contrast of their computer screens. I was an area of computing that was wide open and untouched: the monitor, the screen itself. People adjust brightness and contrast on their screens all the time manually pushing big old fashioned buttons and twisting knobs and dials, and they have to be in front of the monitor to do it. This is where Rick saw the opportunity: Why not let people adjust their screen settings from anywhere in the world over the web? At the time we could barely comprehend how profound of a concept that was, and I was excited to be part of it.
In no time we had investors beating down our office door. Because of our tight non-disclosure agreements we couldn't even explain to our investors what exactly we were working on, we could only tell them it was going to be "big and yellow." Thus the project code name "Big Yellow" which we later had to hire lawyers to wrestle that trademark away from the Yellow Pages, but it was worth the battle because we liked the color yellow, it meant something to us, and for our investors it was all they had from us so far.
I was charged with hiring our entire technical staff of programmers, tech support reps, internal support, networking, and field technicians. Although I didn't see the harm in it at the time I immeditaely hired all of my friends from the local role-players' gaming club to fill out the top technical positions in the company. Some of them had actual computer experience and others were just really cool people to hang out with. We worked long hours together, only it didn't feel like work because we turned our management process into a role-playing game, another revolutionary idea that we were very proud of.
The trouble started when we missed our first ship date. Little did we realize it at the time but most computer monitors settings can not be controlled through software, a major setback. It also didn't help that most of my staff had been put on the "Bigger and Bright Yellow" project which Rick's cousin Nell was personally managing. Soon there were a clash of personalities and unexpected failures in our role-playing-modeled management process. Investors were also starting to demand some kind of description of what our product was supposed to do and our lawyers couldn't hold them back much longer. After Rick came back from his new time-share in the Italian Riveria, we had the talk I was dreading all along. I was being replaced. Rick's brother-in-law Jed had just been certified to repair PCs and other electronic devices and now his wife wanted Rick to make Jed as our new CTO. Jed was a smart kid in his own way, but he clearly did not know anything about role-playing games. That made it difficult for us to respect him as our boss.
But we worked hard and the money didn't mean anything to us. As long as my stock options were still worth more than $20 million, and my salary was twice the market rate, the money didn't mean anything. These were the fun times. Our office was a playpen of ideas and creativity, we had really smart people and free soda, as much as you could drink all day and night.
By 1999 it was all over. None of us saw it coming. Our executives were dragged out of the office in handcuffs; apparently the investors decided to play dirty and called the FBI on us. I couldn't believe they would accuse us of fraud -- we had a product, we just hadn't finished thinking about how to make it yet. The saddest part came when I had to fire my friends. They felt betrayed, the week before we were shopping for luxury yachts and now they were wondering how they would make rent next month. All I had left from my years at Porkius was the twelve-sided die we used to cast our most important executive decisions.
Still I am ambivalent about the outcome. After all, I have learned some valuable lessons: never trust guys named Rick -- Rick is an asshole, Rick lied to me; never trust investors; hire only the friends who play the same games you do; and wait until the computer monitor market matures before stepping back out there.
Of course, I'm biased, but I think it's interesting. I wanted to post it to A) give some meaning to 18 months of personal hell, and B) allow for the discussion and study of failure. I spent a little time pursuing an MBA, and nobody ever studied failure.
Those immune to failure, feel free to criticize the story, my business and my struggles with it.
The problem with the tech boom of the late 90's was that people didn't buckly down and release useless products, they took their sweet time about it.
If people would just get off their asses, and get those terrible websites out a bit faster then they can go out of business with much more authority and confidence, versus this current crop of companies who can't even handle their bankruptcies emotionally.
These lessons have been learned by the current crop of startups, and they have become tightly focused on synergies around expenditures. Meaning, they will blow money at a faster rate, and bring products to a market that doesn't want them that much faster.
Get ready for the new, really new, economy!
Yes, people were foolish. But just like everyone was all hyped up about dot-coms and e-commerce and new economy, people are also now all hyped up about the failure of these. It's *all* out of proportion.
Do you have any idea how many car makers have existed? Over 15000! How many exist now? 20? 30? Does that mean that cars aren't one of the most revolutionary inventions ever or that it's a bad business idea? Should we laugh at Ford, Honda and Audi?
What's idiotic is getting into extremes, using terms like "e-revolution", "new economy", "cyberspace" etc. Just because something is revolutionary doesn't mean we have to use it in every single aspect of our lives. After all, we still drive on "roads" - as opposed to "automobile space".
It's easy to make fun of it all now, when we know how it all turned out. But just because boo.com went bankrupt and just because Nasdaq was/is about 10x overvalued doesn't mean that we're not talking about a revolution - it is a revolution for sure. I consider it revolutionary enough that I can read my email on the subway, that I can buy movie tickets with a cell phone from a café using a web / wap browser etc. There's no need to hype it, but there's also no need to ridicule it.
Failing that you can melt the sheep however I have not been able to reconstitute liquid sheep as yet.
Please be aware that in the UK you must add a generouse slosh of disinfectant to either the sheep or the icebergs while liquid to prevent contamination by foot and mouth disease.
Matt Thompson - Actuality - Insert product here.
Truly you were ahead of your time. Every iMac made uses software to control its monitor settings (as do Apple's flat-panel screens). If only you could have held out another year, the installed base might have grown enough to show your investors a potential market.... alas, now we will never know. :-]
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I use Macs for work, Linux for education, and Windows for cardplaying.
Anyone ever seen the movie boiler room? The story was funny and somewhat similar, but whats scary is, it happens in the real world although its rare when tech based, however whats ironic IMHO is that most VC firms who invested in companies that went under for lack of having products never attempted to seek injuctions against those companies. Also noteworthy to me is the mentioning of hiring friends, and lack of management due to age constraints.
I worked at a content provider like Yahoo that catered to Latin America, except 90% of the staff weren't Latin (get worse). Well no one was ever allowed input during weekly meetings (where much money was spent on catering) into what the company should look to for future revenue, or methods to cut costs (e.g. option for cheaper servers, etc.) not because no one had a clue, but because management between the departments were mostly 20 something'ers.
I remember a few people had ordered (no bullshit) Sun E450's for personal mp3 storage servers, the company brought just about everyone top of the line IBM Thinkpads, Motorola i1000 pagers, Nextel phones, you name it they brought it.
Now the management team used to all work together in prior companies, some were college buddies, and when they had disagreements with each other, they would act out like brats who didn't get their way and disrupt the company by not allowing needed change, not because it was or wasn't good, but simply because they didn't like each other. Weird place I ended up leaving after about 6 months.
I barely trust companies where management is some skateboarder looking reject who thinks its hip to interview me with a little dog running around the office. Sure one would like to go to their jobs and enjoy the environment they work in, but management (although most times are hated) is a very important part of any company, and not many 20something'ers have that edge yet in my opinion, mind you I'm in my upper 20's.
Want Root?
Can you hear it? That's the collective ignorant outcry of a hundred thousand geeks who can make a Linux box fly but can't recognize satire when they read it.
This is not a real dot-com people...It's half tongue-in-cheek, half satire. You must chill.
Now if anyone who doesn't believe me wants to invest in my plan to turn the volume up on your computer from the internet, email me the money.
RB
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ah honey, we're all resplendent - Bill Mallonee
This was a very good peice of satire.. and not far off from the actual truth on the market. Most companies did very little research if an idea was marketable.. For example, my previous job was working for a company called InterAct Accessories, (GameShark.com, interact-acc.com).. I worked on many projects that were just not researched.. My boss at the time's outlook was, "If its internet enabled or does something on the internet, it will sell millions." And thus a product called SharkWire was born. SharkWire was a modem for your Nintendo 64 that allowed you to get Gaming information straight from Sharkwire.com for only 9.95$ a month! The best part you ask? You can't browse anywhere else on the Web, and Sharkwire.com was always down! I know, I know first thing I said was where can I sign up to get one of these devices... Well instead of even just testing the water before investing a lot of money, they put approximately 2 million into it, produced 80,000 units, setup a huge sharkwire.com hosting deal with Genuity (approximately 90,000 a month for Solaris machines, Radius servers, mail, etc..), then released the product LATE.. Missing its target date before christmas.. But alas, it was the technology era, it would sell anyway right? Well InterAct sold approximately 500 units over a period of 5 months.. of those only 100 actually called to subscribe to the service.. The rest were eventually returned.. Needless to say after about 8 months the project was shut down... with still 80,000 of these units in a warehouse.. Fortunately I wasn't directly involved with this particular project, but my job was eliminated anyway thanks to the huge loss involved..
..There's a-dooin's a-transpirin'
Twenty-something managers definitely deserve a lot of blame, but to be honest, good managers of any kind are hard to find.
I was involved in a dot-com startup. We raised 4.5 million in the first round. We decided to hire a 40-something CEO, figuring that he very successfully ran a multi-thousand person corporation that went public, so he must have done something right.
What a disappointment. The biggest problem was that he was extremely intimidated by "the New Economy" and bought into every dot-com cliche you could imagine. Spend money as fast possible. It doesn't matter what you do as long as you grow. I was the CTO, and tried to bring some sanity to the process, but was overruled. I eventually left the company.
Later, they raised another $15 million. The guy hired to replace me was, quite frankly, one of the stupidest, most irritating people I have ever met. However, he could butt kiss like you wouldn't believe. He would spew techno-babble that would never fail to impress my "grayhair" CEO. Eventually, only an uprising by the programmers got rid of him (they threatened to walk out, en masse, if they didn't get rid of him). One catty comment: the ugliness of his personality was exceeded only by the ugliness of his appearance. He was truly offensive in every possible way. There aren't many people that I truly hate (even people that have screwed me in the past), but this guy I truly despised.
Anyway, the irony is that it really was a great idea, but it would take careful execution to make it happen.
There were SO many other stupid things they did. Long term office space lease (although, they at least didn't get the most expensive they could get). HUGE Oracle/Exodus contract that was 10 times more power than what they needed. On and on.
This was late 1999. They have pissed away 17 million of the 19.5 million they raised in about 2 years. They finally fired the CEO. However, the VCs hired another guy for, I believe, $350K/year. My partner (who was still there at the time) absolutely hated the guy, and thought he was completely useless. My partner was fired.
My lessons? NEVER use other people's money. You very, very rarely need it. Trust your instincts. Be frugal, and slow steady growth wins the race.
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Sometimes it's best to just let stupid people be stupid.
You assumed a position suggested by some stranger in a cab, and wonder how you got screwed? Sheesh....
+5:offtopic,but anti-American