Book Review: ‘dot.bomb’

Reprinted from The Atlantic
By K. Daniel Glover

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 startup 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 [stories].

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.