The Internet boom spawned a spoiled generation of money-loving upstarts who gave stock options a bad name. Now, the Internet bust may plague the planet with its own mutant strain of capitalistic progeny: bitter dot-com dreamers who pursue wealth by publishing tell-all books about the industry that crushed their hopes of retiring in splendor at age 35.
Consider J. David Kuo, one of the firstborn of that new generation. Now a domestic policy aide in the Bush Administration, Kuo left the relative comfort of the nonprofit sector in May 1999 to take a communications job at Value America Inc., an Internet start-up in Charlottesville, Va. He saw the job as his ticket to membership in the New Economy Millionaires' Club, but he soon learned that the dot-com life span can be quite short.
So instead, Kuo adopted wealth-generating Plan B: Write the book on the infamous dot-com downturn. That book, dot.bomb: My Days and Nights at an Internet Goliath, proves that even those who fail at business, or who work for failures, can find a gullible publisher, no matter how insignificant their story.
Few stories could be less significant than Value America's. Craig Winn, whom Kuo dubs the son of "the consummate salesman," launched the company in mid-1996. He wrote a 250-page business plan within a week of deciding that the retail market was ripe for an online store that had no inventory but had access to every product imaginable—and all for the lowest possible prices.
The list of business titans who backed Winn's idea, both in spirit and in cash, included FedEx Corp.'s Fred Smith and Microsoft co-founder Paul Allen. Yet in hindsight, Kuo portrays the idea, or at least the implementation of it, as half-baked; Winn's success in selling it was due in small part to his master salesmanship and in larger part to deception.
The author provides plenty of ammunition on both counts. The company, for example, was designed to revolutionize retail by moving it online. But Kuo notes that Value America spent far more advertising and marketing money offline—on cheesy infomercials and trendy corporate sponsorships, among other things—and accepted many orders by telephone.Customer service was lousy, too. Kuo himself waited five months for a grill he ordered through Value America, and his Good Humor ice cream cost $15 to ship and was liquid glop when it arrived.
The company's goals were also fluid, never strictly adhering to the business plan Winn had crafted. "Value America aimed at custom stores one day, government the next, and business the day after that, all while spending as much money as possible on anything possible," Kuo writes. The company "had a new mission and a new description every third press release."
As for Winn, Kuo leaves the impression that Winn was incapable of telling the truth—even though he professed to be religious and his "evolving faith rippled through the company." If Kuo's version of events is accurate, Winn was the kind of man who could hold a Bible study in his office in the morning and lie with abandon in the afternoon. He deceived investors about the number of brands Value America offered; he disclosed details of business deals that did not exist; he even bragged falsely that Henry Kissinger had agreed to be Winn's political adviser. Winn's trouble with the truth ultimately cost him any say in the future of his company. And by the end of 2000, Value America was dead.
While the book provides an informative and sometimes entertaining insider's view of the e-commerce world that was, readers are likely to have a nagging question after slogging through its more than 300 pages: Why does a company that wasted millions of dollars, never turned a profit, and died within five years deserve a book-length memorial—even an unflattering one?
Amazon.com might be worthy of a book if it folds. But Value America? Most people never knew it existed—and won't miss it now that it's gone. Dot.bomb is a bomb of its own for another reason: Kuo's arrogance. The book is billed as a business narrative, but readers could not be blamed for concluding that it is as much about the self-absorbed author as about the company he maligns.
Kuo covers nearly three-fourths of Value America's history in less than a third of the book, and the explanation for that superficial treatment becomes clear on page 84, when Kuo thrusts himself into the narrative. From that point forward, he is not content just to tell the story of Value America. He works hard to portray himself as an e-commerce guru and as the hero who stood up to Winn. It is also annoying to read Kuo's self-righteous condemnations of Value America's stockholders. They "were addicted to the stock price," but Kuo acknowledges that it was "somehow erotic" to imagine how he would put his own stock options to use. Someone who "promised my dad a Porsche by the time I was 30" has no room to question others' single-minded pursuit of wealth.
Perhaps fittingly, the book is at its most compelling in the final 50 pages or so, when Value America is collapsing. The emotion-filled interactions involving Winn, company CEO Tom Morgan, Kuo, and others add a dose of excitement that is lacking throughout much of the book. Readers know that, finally, the bomb is about to explode.
