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Business @ the Speed of Stupid
Alan Morrison and Dan Burke have written the first meaningful post-mortem on the New Economy in their new book Business @ the Speed of Stupid. At its core the book clearly explains how the disregard for strategy and sound management principles doomed many a company and Internet project. If this sounds like a lot of other books currently hitting the shelves, then I should point out that Business @ the Speed of Stupid is one of the only books not willing to pull punches.
As you can probably tell by the title, Business @ the Speed of Stupid is not one of those cutesy sugar-coated business books. Consider the opening of Chapter 1: "Most companies of any size have a Web site. Most suck! They suck because they simply fail to communicate with the intended audience." And there's a lot more where that came from! The book is divided into two sections: "@ the Speed of Stupidity and Accelerating" and "Decelerating the Stupidity." This format proves to be a good way of presenting their observations and recommendations.
The "@ the Speed of Stupidity and Accelerating" section is filled with stories about companies that remain nameless to protect both the guilty and the innocent. Some readers may be disappointed that Morrison and Burke have chosen not to reveal the true identities of the companies and people they profile, but I think it actually strengthens the usefulness of the stories. You're not distracted by the sensationalism, and you're not fed the rose-colored version that things just didn't work out for these companies or their ventures. The stories are even more useful because they reveal the real situations, conversations, and decisions that led to failure.
Morrison and Burke are able get their ideas across without sounding like dusty old professors or techno-Latin writers trying to sound intelligent. They are quick to point out that there are no silver bullets and that cutting corners is a recipe for disaster. Consider their take on phantom sales predictions: "A common and widely held misconception is the idea of magic conversion ratios that convert the number of hits on a site to projected customer leads, e-commerce sales, or whatever. Let's be clear: This type of thinking is 100 percent crap."
A major theme in the first section of the book is how the apparent simplicity of the Web lulled business leaders into a trap. The brochureware sites that companies first launched appeared to be simple. But when it came to real e-commerce or real e-business companies quickly learned that these projects were much more complicated. The notion that you could throw together an Internet project without any planning, without any processes, and without experienced professionals was foolhardy. As the authors accurately point out, "the frequency of this type of foolishness is increasing dramatically as more and more projects are sponsored and managed by nontechnical professionals and staffed by zealously ignorant technologists."
This comment illustrates another main point of the "@ the Speed of Stupidity and Accelerating" section: "Get the right people in the right roles or you will find yourself facing insurmountable problems." The wrong people are those that consistently contradict their words through their actions. They say they want things done right, but they end up cutting corners to get the job done fast and cheap. They hire the best people or companies to do the work, but want to totally ignore the processes that create good work. The authors quip, "it is amazing how often executives hire experts and then completely ignore their advice" instead of remembering to "hire smart people and listen to them." Balancing people, processes, and systems is critical to being successful.
Business @ the Speed of Stupid also provides readers with a much needed smackdown about the importance of sticking to the "old rules" of business. Morrison and Burke contend that "technology must take a back seat to core business and customer needs, not the other way around" and that "the 'new rules' are simply a recipe for disaster, and those who continue to propagate them are completely irresponsible." The technology shakeout taught many business leaders just how important planning and communication were to developing successful initiatives. Of course Morrison and Burke get that point across in a less subtle way: "There is a generation of lemming managers who actually believe that telling people 'Just do it!' is the right way to manage because that's the way they've read it in a book or magazine."
The "Decelerating the Stupidity" section of the book tries to bring a lot of the key messages and concepts together, and offers a well-presented framework for putting the brakes on stupidity. I think the "Do's and Don'ts" at the end of each chapter of the first section will give readers more immediate solutions to their problems, but the second section takes a much more big picture approach. The framework the authors put forward is based on the concept that thinking strategically means always balancing the "Organizational Domain" and the "Competitive Domain."
The "Organizational Domain" is made up of the people, processes, and systems that allow your company to get the job done. The "Competitive Domain" is made up of your presence in the market, customers, and your competitor's presence in the market. The connection between these two domains is your strategy, and it acts as the ultimate fulcrum to keep things balanced. The authors note that "to emphasize one thing (e.g., technology) while you slight another (e.g., people) guarantees you will look stupid."
Business @ the Speed of Stupid is a well thought-out book by two people who actually know what they're talking about. The 230 pages of content move at a steady pace, and the accompanying charts and illustrations don't require a PhD in fluid mechanics to understand. Footnotes throughout point readers to other outside resources and a handy "Glossary of E-Terms and Phrases" are nice touches as well. I'm sure you could scan through a lot of the book over an over-priced cup of coffee at one of those bookstores, but I think you'll quickly find it's a book you'd be stupid not to buy.
You can purchase this book at Fatbrain.
Unfortunately, the managers who need this the most will never see it. The ones who read this stuff are the ones who already have a tech clue.
1Alpha7
Live to be Moderated
1) Best viewed with IE/NS
2) "This page requires flash" (non skippable intro)
3) Be sure to click one or more of the dozen pop-uder ads!
4) PSST! You must have cookies enabled (a la microsoft.com) with big brother overtures.
A host of others I forgot that said "Warning! WARNING! Danger Will Robinson".
Oh, and didn't www.cluetrain.com do something like this?
Suppose the summation of most business plans/venture capatialists could have come down to one question:
Got Clue?
Cheers.
If it is not on fire, it is a software problem.
I talked with United Airlines a couple years ago about how bad their site was, bulky, difficult to navigate, lacking information and the IT guy I talked with agreed, but it was already their *new* site.
Too many minds don't think three dimensionally and others think a presense on the the web is all that it takes to succeed, although that old paradigm should be breathing its last gasp, after the fall out of the past year.
It's the duty of every websurfer not just to point out difficult to navigate or uninformative sites to webmasters. I take the opportunity whenever I can. Some appreciate input, others seem to ignore it (maybe it's a precious design, close to their heart and criticism hurts too much to ever consider that they may be wrong.) Telling someone their site or design sucks isn't going to improve anything, now it's worth emailing bad site hosts and designers and telling them about a book they might read. Include this link, too.
FWIW, I come from the school of design where it doesn't have to look pretty, but better work. Checkout my own site and feel free to tell me how much I don't live up to that ;-)
A feeling of having made the same mistake before: Deja Foobar
Please, get over it.
I have been in the Internet business now about as long as it has been around, and I can tell you that for every MBA who used to manage a carpet business who decided to get into Internet development (yes, thats a real person), who ended up tanking a company or two, there were 20 engineers sitting there telling him he was being wholy stupid, and maybe an accountant telling him he cant manage a business that way.
This is my best example: I am an engineer. I read in the WSJ that you can make alot of money growing rare orchids, so I get some capital and hire a guy who is an orchid expert. He tells me I need a 50,000 USD greenhouse, but I say no, he can get by with my garage. He tells me it will take 6 months for the first crop to come out, but I give him 4. Then, I wonder why my product looks like crap, and the people whose money I took up front for a product 4 months ago are p***ed off.
These people ARE stupid. Scott Adams: Risk takers by definition often fail, so to morons. In practice it is hard to tell the difference.
I do a lot of product checking online, and I'm amazed by how few businesses there are that follow even the simple step of putting their current junk mail pamphlet on the web. I'm wondering how effective they think the advertising would be if the paper flyer which was widely distributed showed the product, listed features, and then asked the customer to call them for a price.
I think that there is a middle ground between giving name and address and offering online shopping.
I know that they want the feedback, but for a lot of the equipment I'm searching for, mainly scientific apparatus, price variations of 10 times the cheapest price are not unusual, this is really stupid.
Why can't they use the same trick as the paper version and print a disclaimer about the price changing without notice?
Implying that no one who reads Slashdot is an MBA, or even has any intentions to run or control a company is rather narrow-minded of you. I'm sure a large portion of the /. audience may find this sort ofthing interesting, even if the "typical (read: stereotypical) /.-er" may not.
Even smart people can benefit from reading about mistakes that stupid people (or even other smart people) have made.
In other words, the word "fail" sorta implies that there was a snowball's chance you would succeed. I mean, let's say that I'm going to create a business that will build rockets and provide vacations on the moon. When the business fails, you don't do a post-mortem and ask why it failed. It doesn't take a genius to figure that out.
The same was true of the dot-com era. There was a suspension of disbelief -- people actually thought we really could provide moon vacations. BTW, I use "rockets" because I suspect that the next overhyped tech bubble is going to space (that, or biotech).
We geeks are often frusterated by websites that come up blank because we use Netscape on Linux without Flash. This isn't the cause of their failure, but a symptom that businesses were run by people that didn't understand business.
For example, in order to tested out the famous flop "boo.com", I attempted to buy something from their website. It was very pretty and artistic, but no matter which browser combination I tried, I simply could not get the website to work. To the business owners, actually fulfilling customer wishes was a minor details that the techies could work out. Like building rockets, business owners couldn't build what they were promising -- an much of what they were promising would be impossible to build.
BTW, I created an enormously successful new-economy business that was profitable for 3 years. We had to be profitable. We went to the VCs with the business model that we were going to build a better mouse-trap, and leverage word-of-mouth. They laughed at us and told us it wasn't about product, but "branding", and how naive we were. Since we got no VC funding, we didn't have the luxary of building a loss making business.
There are no lessons to be learned from the failed dot-coms, any more than lessons to be learned from a failed moon vacation business. This means that there is no magic formula for building a successful new economy business.
PS: The funny thing is, despite the lack of super bowl commercials and absolutely zero advertising, we built a strong brand. The VCs are right -- you do need branding, it's just that vapid commercials don't build strong brands -- satisfied customers do.
Perhaps Netscape (the company) could have spun-off from NCSA. Bygones. But taking something free and trying to make money on it was the name of the game. Thats my point.
I am also not debating the correctness or timeliness or any other "ess" in this thread. Keep in mind the subject of my posting.
>And how about selling groceries over the internet.
That is a great idea for the infirm/elderly, and others who going to the store is difficult, if not impossible. It's alot cheaper than getting a taxi to the store if you cannot drive, too. Hopefully, the idea will come back as a sustainable business model.
-asb
Can we really point at companies that failed and say "they were stupid"?
Selling dog food over the net was stupid. Selling luxury items, where tactile sensations are important, over the net was stupid. Asking for money while vaguely promising to pass it along is stupid. Oh wait, paypal is still in business.
We all knew at the time a lot of these web sites sucked, and business models sucked. Just because something is new doesn't mean common sense doesn't apply.
I find no motivation to study the failures and misconceptions which were so widely purveyed and deployed.
IANAMBA, but I actually find it to be very important to study failures, and it seems to be an aspect of business that is not so much overlooked as avoided. The key is how you study the failures. It is not enough to say "Here is a failure. What can we learn?" You have to say "Here is a failure. What was the underlying problem that caused it? What was the 'fatal flaw'?" Lack of revenue is not an underlying problem. When studying failure, we must abstract the problems further than that.
In my experience (and yes, I'll admit to finding a few rare exceptions) MBAs are not smart people. They're generally slightly above average intelligence, but no more. That said, they will still be better than the average engineer at running a company. Again, there are exceptions to that
"The invisible and the non-existent look very much alike." -- Delos B. McKown
Stupid people exist in all professions. As a race at least 90+% of people are idiots. I've yet to work for a company that doesn't have an idiot for a boss, nor yet seen a company without at least one primodana engineer.
If your full of sh*t to begin with, you're not going to listen.. REALLY listen to others opinions because you're too judgemental already.
Open minds, good reserach, well thought out plans and executed strategies will give you the best survival ratio out there.
-M-
Ps.. Schooling really doesn't matter.. School gives you a foundation of knowledge. I've had little schooling but I've been a magazine cover artist to Manager to Director of technology .. Its all about how you apply yourself and having the will to get there.
"Life is all about strategy, mathematics and psychological perceptiveness."
Speaking of other media where ideas failed.. Who remembers the goofy Commodore Amiga ad that ran during a Super Bowl? Science fictiony man walks down a hallway of shimmering walls, climbs a stairway and puts his fingers on the keyboard of an Amiga as a voice over says something like "get ready for a whole new experience in home computers" They shot around $1 Million for 30 seconds and left everyone thinking, "Huh?" IIRC, at the same time IBM was using a Charlie Chaplin look-alike to successfully move PC's and sign businesses.
Communication is the key, but often the suits pay too much attention to style over substance, as presented by ad or web design agencies. A good web designer should care about the welfare of a client, because repeat and ongoing business with a client is less costly than trying to bring on new ones, also works great for building good references.
A feeling of having made the same mistake before: Deja Foobar
Can we really point at companies that failed and say "they were stupid"?
I would say no. I started up a small company back in 1997 to 'exploit the power of the web' for businesses. The projects we took on without exception saved or made money for our clients. We turned away projects like 'its a website where people check if the weather suits a stretch of river for fishing - we'll make money on ad revenue' and 'its a way for people to buy and sell crap - and we'll charge 10%' because we knew that either they wouldn't work or eBay got there first. The stuff we did was streamlining business processes, increasing connectivity of staff, basic stuff, not sexy, but it worked and they got back 2 or 3 bucks a year for every buck spent.
But we had to think about it - and it wasn't obvious - and if 'sell crap' had turned into a $20Billion company within 12 months we'd have looked like prize twats!
The number of times I said 'just because the CVs buy the idea doesn't mean anyone will buy the damn thing in the real world - your not allowed to just take the CV money and go home you know!'
We got lucky, a lot of people didn't - but they thought they did at the time. Books like this are necessary, but they need to name the companies so we can look em up and see what really went wrong.
>Use wireless when I could be using a cable
:-)
:-)
I do, and the marketplace has determined this a big hit. The RIM Blackberry being it.
Its a PITA having to log in all the time to check email. That and email being paged to me is better in so many ways than a cellphone (I'll list them if you care to ask...
>surf the web on my phone.
Used to do that on my Blackberry, but the cost is just too high right now. My Blackberry's just a tad smaller than most cellphones so I'd say it counts.
>have my personal documents on somebody else's computer.
Millions of ssh users would disagree.
>do anything in virtual reality.
Yes, most VR stuff on the market is lame. However, at one time 3D shooters were almost considered "VR" and they're pretty popular. I'd probably want to do that in VR if the price were right.
>and I'm never going to bug groceries, clothes or pets over the web, or install linux on my grandmother's computer
I'd buy groceries on the web. Nearest store is almost 20 mins away and I'm lazy. Don't think they ship pets over the web (seems like a logistical nightmare considering how UPS handles non-living packages). I buy christmas presents over the web since with christmas traffic makes getting to the store a 1 to 2 hour escapade of sliding around broken down cars in -15 deg C snowstorm weather at 1.5 mph (ahhh, that quality city planning at work).
I wouldn't install windows on Grandma's computer because she wouldn't pay $300 for windows XP, and doesn't want something out of date. Doesn't leave much. However, since I still consider linux moderately difficult to configure, I'd probably get her one of those webterminal deals.
>If nobody wants to buy what you're selling........
Then you just don't know what they want.
It's all in the implementation. A phone is not a web device. A RIM pager is. idrive is an inconvenient way to access your files across the 'net. ssh isn't (the windows and linux clients easily fit on a disk). VR is badly implemented. I think when someone can finally get it under $200, make it high enough res and refresh you're not sick 5 minutes after using it, and actually get popular games to run on it it would be HOT.
Getting groceries on the net is moronically implemented. It is marketed (and only availiable to) downtown city folk who have a supermarket in walking distance. Uhhh, hello McFly? There's millions of us out in the counrty who are used to paying premiums to get what we want (eg. I pay $150/mo for high speed internet) and would be willing to do that for the groceries.
Shipping pets from a website or a real paper catalog is probably a great way to get sued.
Getting christmas presents on the web is actually good, if you can find a store that doesn't have sucky stock. Maybe again, city folk find it useless. But in the country it's great!
All those web ideas would have failed in the real world too, IMHO.
Time for people to realize selling stuff on the web is identical to selling it from a catalog. And, surprise, surprise, a lot of catalog business comes from people "out of the way".
[Oh, and wireless access is another thing. Idiots who market it seem to think the best way to make money on it is to put their towers in big cities. Why? These people already have cheap ways to get on the net and you can't compete. Go where there's less competition, and where there's people willing to pay more. Go outside of the city. Think outside of the box (literally)].
If you could be told what you can see or read, then it follows that you could be told what to say or think - BoC
And any asshole knows that the paperclip was put in by people in marketing. Actually, I don't care who actually did it. Just go back and read the article until my comment makes sense. Better yet, go buy the book and see how many engineers were running those companies. Then ask yourself which successful tech companies were created by carpet-cleaning magnates. Look at the 10 biggest companies in computing and see how many were created by those with non-technical backgrounds.
Expanding a vast wasteland since 1996.
Many businesses knew they had bad business plans, but that didn't mean they couldn't get money or have the chance to get obscenely rich anyway. We weren't in the business of building solid companies, we were in the business of making money. Given the free flowing VC money tap, I think the only stupid people were the VCs.
I'd love to send a couple dozen copies to my former employer.
She'd surround herself with lots of smart folks and then just ignore what they had to say.
It might also explain the 50% turn-over rate thay have.
However, The one thing about books like these is that the "folks in charge" won't read them. As a front line techie building websites, we often have to explain to the account reps the why and how things work on the internet. No matter how many times you tell them that it's not "business as usual" and that the "if you build it, they will come" mentality is off base, they still want things their way.
In many ways I wish things were like it was two years ago. Far too many stupid people willing to throw money at a project. Now, it seems that they've all gone the way of the dinosaur.
Thank god for the brochureware sites or I'd be out of a job!
Goran
Carpe Scrotum - The only way to deal with your competition.
I've dealt with my share of MBAs at various stages of developement, from the larval student stage when I was a math tutor, up to the aged veteran who made his fortune bringing failing companies back from the brink of death. Every one of them was just barely smart enough to get into college.
All the schooling in the world won't help if you're incapable of learning from your mistakes, listening to the experts you hire, or thinking beyond the next quarterly statement. I read an article about 10 years ago (I think it was in the Wall Street Journal) that said most companies would rather hire someone with an English degree than a Business degree. The reasoning being that someone with an English degree knows how to communicate, and they can learn the business stuff easily enough. The converse didn't seem to be true.
I'm not saying an engineer would do a better job of running a business, but at least an engineer has the training to make logical decisions based on the facts they are presented with.
The CEO of the company I work for now is the best businessman I've ever met. He's been, at various times in his life, a carpenter, a machinist, a welder, and an engineer. He took some time to read a few books on sales and hired a consultant to teach him business management and strategy, and I have no problem puting my future in his hands. His background and experience with the things my company does are extremely helpful, but what really makes a difference is his ability to listen to others and plan for the long term.
MBAs don't seem able to learn either of those.
Under capitalism man exploits man. Under communism it's the other way around.