“So? Maybe it isn’t media. Big deal. Anyway, I don’t want to argue about definitions. I don’t think that’s interesting, whether it’s media or not. Maybe it’s not media. It’s not media alone. I’d certainly agree with that. It’s new media. When we’ve brought in writers and they just want to concentrate on their story and are still thinking about the story in the same way they would if they were writing for their newspaper or magazine, I know they don’t get it. This isn’t media. One thing it is, is tools. It’s like Excel or like Word.”
I know that I’m hearing revisionism. Because the one thing Sidewalk is not like is Excel or Word. Sidewalk is media. Sidewalk is like a magazine. Sidewalk has media ambitions. Sidewalk is content. Editorial. Sidewalk is Microsoft’s effort to show that it can do what the media business does, to show that it can not only process information but create it and present it, too. What Goff is saying—let’s go back to applications, to software, to what Microsoft knows how to do—is a substantial retreat from content.
“Like traffic,” he says.
“Getting traffic?” I say, meaning succeeding in attracting a large number of surfers to a Web site.
“No. Real traffic. Cars. It’s a big problem here! It really is. But online we have a solution. You can come online, or call your secretary from the car, and find out which bridge is clogged. That’s invaluable. And that’s a real use of the medium. You can’t get that from a newspaper or magazine.”
I don’t immediately know what to say or how to react to the idea of a traffic report being a breakthrough.
“Who does Bill take on his boat?” Goff asks—or, rather, almost demands.
“Excuse me?”
“If there’s a flood or something.”
“Bill Gates as Noah,” I nod.
“First, he takes the programmers. Because you can’t do anything without programmers. Then he takes the product managers, because they have to be able to market the product. Then he takes the testers, because you have to deliver performance. And then, if there’s room left, he takes the people who write the documentation.”
“It’s not immediately clear,” I say, after a moment’s consideration of this view of the world, “what I’m supposed to take away from that.”
“Just that the writers are not the most important people here,” he says partly, and pointedly, for my benefit. “Microsoft makes software. Applications. It doesn’t create content, it doesn’t send messages. That’s not what Microsoft wants to be doing.”
“Well, I’m talking about advertising messages, too. If you can’t send a message, you can’t sell an ad.”
“There are no hits. What can I tell you?”
“Your model, though, remains an ad revenue model.”
“And transactions. Transactions,” he nods, and says it again, like a mantra. “Transactions.”
I tell him about the newspaper editors, about how I’ve had the feeling they want to throw over their newspapers and become retailers. I say that it seems to me important that we keep in focus what it is that we really do.
He takes this personally: “I’m an entrepreneur. The Internet appeals to my entrepreneurial side.”
“Michael, you work for Microsoft.”
“So? I’m still an entrepreneur. I’ll learn what I can here and take it with me.”
“Sure.”
“Remember my gay casino?”
“Anyway, transactions,” I say, getting us back to the Internet.
I know where Microsoft is. I know the point they’ve reached in understanding the medium. Transactions. Approximately where I left off.
“So transactions are where you’re at?”
We wrapped it up shortly thereafter. I had confirmed, albeit quite unscientifically, what I had come to confirm: that Microsoft could not see the future, either; that they would, more expensively, make the same mistakes as everyone else; and that, in the manner of most large enterprises, they would make them later than everyone else.
Over the next several days, as I plied a little reporter’s trade through the Microsoft organization, it wasn’t hard to find pockets of discontent among Microsoft’s Internet editors—many had left old media organizations, and all had gone through the Microsoft indoctrination process. A new version of Sidewalk, Version 3.0, was coming, and it was likely that many of the content jobs would be going. The editorial conceit was done with in the 3.0 release of Sidewalk—no more restaurant reviews, no more service features—and the transaction model was moved to the forefront. It was about selling cars and travel services and financial products.
Still.
Given Microsoft’s expressed ambition to take over the medium, how could anyone doubt that the industry would soon be trapped in a Microsoft infrastructure and governed by Microsoft assumptions?
Well, I was sanguine.
Because it was déjà vu all over again. Microsoft was making the same mistakes with the billion dollars it was sinking into the Internet as I had made with my $5 million. At the end of the day, their burn rate would be as consuming as mine.
How did I know this? How could I be so unthreatened?
You had to have been there.
Except the real point was, there was no there there.
An ever-transforming technology and audience meant, simply, that all bets were off.
The Internet would defeat everybody—except the very, very quickest to alight and then be gone.
It was a speeded-up version of culture itself, a series of fads and trends mixing with social and historical and economic forces and technological advances and roiled by constant upheaval and sudden reversals.
Maybe.
I had dinner in Seattle with our former EVP. He had left New York to join Starwave, the Paul Allen–funded company that had partnered with ESPN to create the Web’s leading sports site. The EVP had been looking for the security provided by deep pockets and national brands. But, meanwhile, control of Starwave had passed to Disney, ESPN’s parent, and Starwave appeared to be headed for a move to New York. He was as unsettled now as he had ever been since leaving the packaged goods business for the Internet.
I felt somewhat less guilty. I was not the sole cause of his turmoil and discontent. He could blame it on the Internet.
In transit, as I headed down the West Coast, jacking into airport modem ports and in-flight telecommunications panels, the rumors were pouring in:
Disney would buy Excite.
Time Warner would bid for Infoseek.
AOL was scrambling fast because its advertising revenues—the great new engine of its growth into a major media giant—were way below expectations.
Pointcast, the leader in push technology, which, six months before, had spurned a $400 million offer from Rupert Murdoch, was in a tailspin, its management in disarray and its purpose in doubt.
This level of rumor, however, was not different from any other forty-eight hour period in the growth of the Internet.
I went on to San Francisco.
With some trepidation and excitement, too, I picked up on my conversation with my friend from the Net’s early days.
In truth, we’d been having this conversation for a couple of years now, on and off, in the background, shadow ideas, other-path businesses. My interlocutor had an easy familiarity with technology and the assumptions of the digital age. He had pioneered many of them. But he had a proud skepticism, too.
Skepticism, certainly in my experience, is the most useful point of view for imagining the future. The opposite of any expectation will always be true; every contrarian position taken with regard to the Internet has proved to be a smart position.
“The Web,” he said, fondly and nostalgically, “will be a joke. We’re really going to laugh about this. A few years from now, if you say “dotcom” to someone, they’ll break up. The Web is a well-meaning but painfully awkward construct. Remember Automats in New York? Every dish was behind a different window—a piece of pie here, a ham sandwich there—and you put in your money in
a slot by each window and took out the food that you wanted. The Web and the Automat.”
Most conversations like this—conversations about what will happen, about what’s next—encounter their own naïveté or foolishness or lack of imagination sooner rather than later. In fact, so many conversations like this are occurring simultaneously in so many places that the notions you’re struggling with will, quite likely, be old hat by the time they are articulated.
But some go on.
This conversation, and others of its type, are a set of what-ifs. What if we bring this point of view to these particular assumptions? Now what if we change the assumptions just so? What if we could get the capital to develop this, how much difference would that make? Now what if we could make this happen at this speed? How many people would we need? What would our burn rate be on that?
Yes.
You can imagine the world out a bit—six months, a year, maybe two years (no more, though)—and then try to plot the logic of how to get there and how to stake out a bit of that logic for your own.
Or you could take developments from one part of the world and anticipate their effect on another part of the world. Perhaps you might supply the connection, shepherd the relationship, anticipate the transformation.
Or you might focus closely on cause and effect: We know this is happening, so what are the implications? How will people cope with such a development? Will they pay you to help them cope?
Certainly, you could look at the people with money, the Time Warners, the Microsofts, the Murdochs, and anticipate what answers they will need to what questions. That is always a good strategy: dangle the future in front of large corporations. Pose a question and answer it.
Or you can play the VCs. They move in packs, after all, so it shouldn’t be that difficult, if you really sit down and analyze it, to figure out where the lion’s share of investment dollars will be two or three quarters out.
Or you can do a little bit of all of the above.
Just so you’re not too far ahead, but far enough.
Maybe it will be . . .
The split screen. The process by which we merge old, passive broadcast media onto the same monitor with new, digital interactive media. This is Microsoft’s WebTV hope, the reason for its investments in cable. There is, people are starting to say, a big pot of gold for someone who can figure out the right approach for integrating TV with the universe of information, passivity with interactivity, sports with a virtual sports bar. And just think of the sex stuff!
Or the bots. Information robots. Soon–sooner than you think–you’ll never go to a Web site again. My friend is right: we’ll laugh at the idea. Instead, your bot will be out there working for you. That dream of every student, of someone or something to do the reading for you, has come true. Yes. Try this for a content play: Bots as informed and as intelligent as books, roaming the universe of information, accepting, rejecting, editing for you.
Or how ’bout this: the world beyond the Net. After the deluge. Just think about what happens to us when we live in a world—one fast coming—in which no information is more than a few seconds away. All knowledge accessible, instantly, to everyone. Think of that. How will we deal? What will we become?
I once had a teacher—long, long ago, long before PCs, networks, digital memory—who gave this as a due-for-tomorrow assignment: Describe in a one-page essay a completely new medium. Not television. Not radio. Not records. Not movies. Not magazines. Not newspapers. Not books. Something else. Did she know what she was saying? What she was asking? I have wondered since. Did she have any idea?
The thing about technology is that, with a little imagination, you can get ahead of it. And you can be there when it catches up with you. To profit, gloat, or have the chance to spin it—just a tad is all you’ll get the chance to do—in the direction you’d like to see it go.
Ahead, you, as an entrepreneur, will encounter financiers, promoters, and all manner of opportunists wanting to open kimonos with you. And having been there, having done it, having had the experience of being ahead of the pack, of having imagined the future specifically enough and vividly enough to sell it, I would certainly advise you that it’s inevitable—they’re going to screw you.
But I can give it another spin, too:
Nobody knows what’s going on. The technology people don’t know. The content people don’t know. The money people don’t know. Whatever we agree on today will be disputed tomorrow. Whoever is leading today, I can say with absolute certainty, will be adrift or transformed some number of months from now. Whosoever screws with you will get screwed with, too. It’s a kind of anarchy. A strangely level playing field. The Wild West.
And here I am, making plans again.
Acknowledgments
Neither the company described in this book, nor this book itself, would have been possible without the manifold contributions of my esteemed colleagues Peter Rutten, Chip Bayers, Kelly Maloni, Ben Greenman, and Jay Sears. They have carried me.
There are numerous people thoughout the Internet industry whose views have informed this book. I am particularly grateful to Pat Spain, Bruce Judson, Seth Goldstein, Jim Morouse, Rosalind Resnick, Joshua Quittner, and David Hayden for sharing their perspectives and recollections with me.
Simon & Schuster has been a supportive and enthusiastic publisher, and Marion Maneker a deft and artful editor. I also want to thank Eric Rayman for his considerate reading of the manuscript.
I owe a debt to Peter Ginsberg, my agent, for suggesting this book at exactly the right moment.
In addition to standing by me, and mostly keeping me out of trouble, my wife, Alison Anthoine, has been my most faithful reader.
Also by Michael Wolff
White Kids
Where We Stand: Can America Make It in the Global
Race for Wealth, Health, and Happiness?
(with Peter Rutten and Chip Bayers)
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Copyright © 1998 by Michael Wolff
All rights reserved, including the right of reproduction in whole or in part in any form.
Designed by Sam Potts
Library of Congress Cataloging-in-Publication Data
Wolff, Michael, 1953–
Burn rate: how I survived the gold rush years on the Internet/Michael Wolff.
p. cm.
Includes index.
1. Internet consultants. 2. Success in business. 3. Corporate profits. 4. Internet industry. I. Title.
HD69.C6W643 1998
338.7'61004678'092—dc21
[B]
98-13153
CIP
ISBN 0-684-84881-3
ISBN 0-684-85621-2 (Pbk)
ISBN 9-781-4767-3744-7 (eBook)
Burn Rate Page 33
