Reading about the hubris of all those dot.com startups that didn’t make it can be fun – unless, of course, it was your money that paid for the sushi at a failed dot.com’s lavish launch party.
A new book, Inside the Cult of Kibu and Other Tales of the Millennial Gold Rush by Lori Gottlieb and Jesse Jacobs, provides the latest opportunity to laugh or roll your eyes over the excesses of the New Economy decade. In it, 80 participants in the Internet mania of the late 1990s reminisce about a time when merely having an Internet-related idea was considered a guarantee of success.
“Audio chat was the most ludicrous idea I’d ever heard,” recounts Lew Harris, founding editor of E! Online. “They were calling it ’audio instant messaging.’ I was like, that’s why we have the phone.”
“When I first got out to HSX in Los Angeles,” relates former employee Doug Scott, “the founders had taken out billboards on Sunset Boulevard that said ’Hollywood Stock Exchange … www.HSX.COM.’ But you’d go to that URL and it said ’coming soon.’ So here they are spending hundreds of thousands of dollars pointing people to a web site that was coming soon. These are two former investment bankers riding the wave of the Net craze.”
The “Kibu” of the book’s title was a web site targeted to teenaged girls that, co-author Gottlieb was told, was going to “influence an entire generation.” Not incidentally, she was also told that if she agreed to become vice president and editor-in-chief of Kibu, she was sure to make a huge fortune once the company had its IPO.
Sounded reasonable. After all, the business press was then packed with stories about web-produced millionaires. Gottlieb had even “seen several friends leave stable jobs with benefit packages [to] toil in the endlessly exciting Internet trenches until their startup’s flashy IPO made national headlines a year later, and become instant millionaires.”
Kibu was backed by billionaire Jim Clark of Silicon Graphics and Netscape fame as well as by Kleiner, Perkins, Caulfield and Byers, the hottest venture capital firm in Silicon Valley. Surely they could be counted on to pick a winner, right?
Wrong. Kibu was out of business five months – and $22 million – later. Gottlieb had lasted only three months before becoming “unhired,” possibly for questioning the founders’ business practices or lack of same.
“Nobody checked references at Kibu,” Gottlieb recalls. She allows that this might make sense “if you consider that the hipsters [who were] paid lawyer-like salaries to write content had either worked in completely unrelated jobs or had never had [a job] before. I mean, whom could Kibu call as references … their mothers?”
Gottlieb wrote an article about her experiences at Kibu for Industry Standard magazine. Jesse Jacobs, then senior vice president of IFILM, now pursuing an MBA at Wharton, e-mailed Gottlieb after reading the piece to suggest that they get together to combine her tales of Kibu with comments he had been gathering from other dot.com veterans into a book.
The book’s format – a series of one-to-four-paragraph-long first-person quotes – is similar to that found on many websites that add the word “sucks” to the company name or to the kind of commentary you will find at the inelegantly-named FuckedCompany.com (which, incidentally, earns its owner $1 million a year from subscribers who want advance information about tech companies in trouble.)
Here are some examples of the quotes:
“Everybody at RareMedium was 25 and people were snotty, immature and cliquey. There was an in-crowd and Nerf footballs would hit me in the head. It was like high school.”
“Here’s how I knew Scient was going down. We would always have these really posh, beautifully put on rallies with Veuve Clicquot champagne and a full spread of food … When the industry was going downhill, someone said to me, ’Do you notice that we’re getting Bud Light and Glenn Allen instead of Heineken and Ankerstein?’ That really hit me as pretty significant …”
And, from a dot.commer recalling the launch party scene: “You would have ’seasoned executives,’ guys that left established positions to jump on the bandwagon … All of a sudden they’re surrounded by these amazingly beautiful 20-year-olds … It was really depressing seeing these accomplished executives turn into meatheads. The drool … The groping …”
However, unlike the typical web gripe-site, Gottlieb and Jacobs have sought out the dot-commentators they quote. They include entrepreneurs, venture capitalists, journalists, advertising executives, consultants, programmers, designers, and party organizers to provide a broad view. And the book helpfully divides their contributions into separate chapters about the parties, the lingo, the spin, the mismanagement and such.
Inside the Cult of Kibu illuminates a wild and wacky scene in which companies that hadn’t yet figured out how to “monetize the eyeballs” they hadn’t yet attracted to their web site outfitted their offices with $800 Aeron chairs and provided Palms and Blackberries to one and all.
It captures a culture in which top officers take the title “chief evangelist” or “chief visionary” rather than chief executive officer, where the receptionist might be called “the manager of first impressions,” and where employees who supposedly “worked 24/7” insisted upon having scooters, pool tables, nap rooms and other diversions.
It describes an industry in which, as one of the contributors puts it, “young people cry when they are laid off because they were told they would be worth two or five million. They lived for six or nine months believing, not that they had paper money, but that they were multimillionaires! Then that one day, it all goes up in smoke.”
But what the book makes clear is that the tearful young were hardly alone in believing that their fortunes were assured. The dot.com ventures were backed “by highly successful entrepreneurs, venture capitalists, investment bankers with long, enviable track records,” who, Gottlieb comments “should have known better.”
Still, Gottlieb writes that, despite her experience at Kibu, she may well do it again. Scary headlines aside, “there have been some phenomenal successes. And like playing the slot machines in Vegas, hearing about a jackpot winner makes us forget about the losers; one tale of a windfall for a quarter’s investment, and there we are, obsessively pulling the lever again.”