I met Philip Kaplan very briefly at SxSW 2005. Philip is the author of F’d Companies: Spectacular Dot-Com Flameouts and the guy behind f’dcompany.com—a site many of you, I’m sure, have come across at least once. Philip was also one of the speakers at the How to Make $$$ With Online Ads panel. Later on I ran into Philip in the hall, and he promised to send me a copy of his book (which he did).
This is a truly hilarious read. I have a feeling that people will either love it because it’s entertaining, or hate it and label it shallow. Jeez, this is no Wainhouse Research Bulletin, this is a walk down the memory lane of insane spending, dumb ideas and unrealistic promises! There’s no in-depth look into the stock history of each company, but a short, scathing review of each company presented therein.
I don’t know Philip’s criteria for picking companies featured in this dot-com cesspool. I feel a lot of the inside look came from f’dcompany.com subscribers. A couple of examples from the book stand out in my memory.
wwwrrr
No, my fingers aren’t stuck in the keyboard. This is was a web site with a very real name of wwwrrr:
wwwrrr (pronounced ’whir’) stands for World Wide Web reading, ’riting, ’rithmetic. wwwrrr is the premiere Internet destination for families and schools.
I was laughing until my sides hurt. Somebody must’ve overdosed on their daily fix when they dreamed up this name. I’m all for any resources that help teach kids, but wwwrrr is sooooooooo wrong.
urban box office (ubo)
This is another example of glamorous stupidity. For their launch party they rented—guess what?—the Liberty Island, the place where the Statue of Liberty stands. The entire island! Can someone think of a better way to blow investor money?
There are plenty of similar examples of companies going bust very fast and very hard. Many of them couldn’t survive even a year! Some of them flopped just days before their IPO!
Excuses, excuses
Dot-com flameouts always had someone else to blame, such as “unfavorable state of economy” or you and me for not being ready to accept their “technological innovations.” You know what? F*** ’em! I’m glad we all didn’t buy into their insanity and made their demise happen.
On the flip side, it’s interesting that Intel develops their chips knowing full well that consumers’ computers won’t be able to handle them for another two years. But computer hardware catches up and Intel has fully developed CPUs at that point. This is how you do it!
Moving on. To quote Philip,
More venture capital was given out during these few years in which these companies were founded than in the entire history of America. Businesses and consumers where spending record amounts and internet usage surpassed almost all predictions.
Unfavorable state of economy, eh? I wish every county’s economy were in such an “unfavorable” state. Maybe we could’ve avoided a couple of wars this way.
The Era of Bad Practices
I attribute the worst web development and web design practices to the dot-com era. Every 14 year old Joe thought he could “do web pages” in FrontPage and get away with it. I believe it was then that the ugliest coding and design practices came to life, and we’ve been undoing the damage ever since. I think we lost many good developers along the way.
“Dot com” was not much more than a Lang Grab Rush, and every browser manufacturer kept piling proprietary extensions making it worse for developers (because they had to live with the discrepancies) and for themselves (because they couldn’t yield in the arms race).
Now that the dust settled down we can lobby for undoing the damage.
What About Investors?
Good question. I still can’t understand how someone in a healthy frame of mind can cough up millions upon millions of dollars on shady gigs with (a) no product, (b) no customers, (c) no business plan, (d) no way to earn a return on investment.
So much for credibility of business schools producing armies of MBAs. It seems that nobody took into account similar periods in American history in the 20th century, as well as that of Japan in the late 1980s.
These days you see just the opposite: all those investors sit on their many boards looking for excuses not to invest! I kid you not. I’m dead serious.
You know what’s really, really funny about all this? Only a small fraction of investors are computer literate (even these days!), so I don’t know how they got suckered into dumping money in dot-coms.
What About People?
All this song and dance about dot-com busts is fun, what we keep forgetting that behind every bust where people. Those who had mortgages, car payments, tuitions for private schools their kids attended, etc. Ridiculous COBRA payments anyone? It’s sad that millions of Americans live with no health insurance these days. How many people were shown the door without their last paycheck? Or without severance?
I don’t care about the stupid concepts that never worked. I don’t care about investors who were smart enough to invest in them either. I don’t care about companies who were actually on to something valuable but their 20 year old blue-shirt-khaki-Dockers “CEOs” couldn’t tame their spendings and ran their dollar feeding tube dry.
I do feel sorry for people who lost their jobs. And here, in America, you don’t need monarchy, tyranny or theocracy to keep people at bay—all it takes is a mortgage or a pile of hospital bills to break your back if you’re unemployed. It is this thought that makes me very sad.
Conclusion
There’s more to this book than lambasting losers, as I have shown you. If you read it between the lines, you’ll get more than hysterical laugh out of it.
A word of caution: akin to ESRB’s parlance this book contains “explicit and/or frequent references to profanity, sex, violence, alcohol, or drug use in music” as well as “consumption of alcoholic beverages.” In other words, if you are sensitive to strong language, there’s plenty of it, so beware. :)
