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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.
If I had to name a book like this, I would have chosen "Business at the Speed of Blight". It is so easy to create a book like this right now. The reviewer was right -- it would have been more delicious if we could point at real companies and real people.
Sometimes I wonder if the only real thing that happened during the last 8 years since Mosaic was exploitation, lies, and hype. Even Netscape itself, when it went public, was largely an exploitation of Mosaic. I refused on principal to buy into their IPO.
There's still only one good way to success. And that's hard work. (Maybe a little luck)
A good review, tho.
Having met both great and terrible programmers, periodic weeding is a necessary part of every industry. Books like these are no different to books that analyze the early years of a new industry. Perhaps a better question to ask or better book to write about is "why don't people learn from history?"
But then again maybe this book is written for a laugh and some humor.
Actually, as the son of one of the authors, I know that this book was actually in the pipeline well before the bubble burst. I think the title may have changed, though.
I've noticed that for a lot of companies, their web presence isn't measured up to the same standard as their bricks and mortar company. One of the best examples of this is publishing companies, mostly because it's these that I would expect to have the best idea of what constitutes a good looking site. An early poor example was apcmag.com which had a complete refit of their web site a few years ago, even involving the server being down for a few days. When it came back up, it had a new look. One of the factors in the new look was that the link for the contact addresses was in blue type on a blue background.
I'm sure that everybody else here has examples of the same problems.
I'd like to pose a challenge:
Give one example of a site which uses java, javascript, or frames, where the same think couldn't have been done better with simple, single frame HTML.
Slashdot must have some sort of contract to sell only books from FatBrain (stupid name, BTW). If you want the absolute best price on a book, check out Add All.
There were a whole lot of really smart business people who seemed to turn their brains off when they started talking about making money on the web. They thought that since they were doing business on the web, then needed the newest technology, to give them the competitive edge, when the reality was their sites sucked because their content sucked, and their business was crappy because they had ignored all of the basic principles they should have learned in Business 101.
Real eye openers, these:
"There's no point in flash intros".
"Website hits don't mean instant cash."
"If you hire experts, listen to them."
"Get the right people into the right places."
Seriously, I don't think any of this is a problem anymore. Perhaps this book would have made sense two years ago, but working in the business today is a totally different experience. VC funding for the stupid dried up a while ago, and this just seems like a dumb attempt to cash in on hindsight.
What an intelligent post. But I must refrain from modding it up in order to reply to it. =)
The question is not "why did they fail" but "why anybody thought they would succeed".
You mention moon rocket vacations, but we've seen insane market speculation before, in the late twenties. It was a time very similar to the late nineties in terms of the delusions of profitibility-for-everyone, and it ended in a very similar way. I found an interesting primary source reflecting on Black Friday (1929), saying that nobody called it that at the time (of course), because it wasn't understood then that that day was the onset of the Depression, only the end of wild speculation.
We had a day like that not long ago ourselves, and our pundits have been proclaiming that it's not the beginning of another contraction/recession/Depression, only a downturn/contraction/recession. The same message prevalent for years after Black Friday. Stocks fall, but slight rebounds at the end of the day, investors encouraging optimism, etc.
The problem was that then, as now, it was a pyramid scheme. The VC was there, even as every start-up was losing money, because the bills were paid with the money of new investors. Send a five dollar bill to everyone whose name is above yours on the list,etc... works great until your name is the last one on the list, and no one is left to send you money.
What's hilarious is that this wasn't enough for a few enterprising folks, who actually set up more recognizable (illegal) pyramid schemes in the middle of the larger one the world economy was caught up in. I remember an article in Wired about Russian gangsters starting some magical online casino where everyone makes money* (* for awhile).
The lesson I take away is not the one learned by looking at failed dot.coms, but by a failed market model. Will those good times ever return? Count on it. It's just waiting for a new generation of suckers to be born. Let's see, at a rate of one a minute...
That's not luck. That's smarts. You had them. It's clear that a great many people did not.
And the brethren went away edified.