Cynthia Dyer-Bennet (cdb) Wed 4 Sep 02 10:30
Jesse Jacobs and Lori Gottlieb are co-authors of "Inside the Cult of Kibu: And Other Tales of the Millennial Gold Rush." The book is a collective memoir of the New Economy based, in part, on Lori's Industry Standard expose chronicling her experience working at high-profile, Jim Clark- and Kleiner, Perkins-backed Silicon Valley startup. Though Kibu's stated mission was to empower teen girls, the culture devolved into the behind-the-scenes equivalent of "Heathers" meets "Lord of the Flies." This is Lori's second visit to Inkwell. She first appeared here to talk about her best-selling memoir "Stick Figure: A Diary of My Former Self," which was an American Library Association "Best Books 2001" selection and is currently being adapted for television by ABC. As a journalist, Lori has written for The New York Times, Time, People, Elle, Glamour, Salon, Slate, The San Jose Mercury News, and The San Francisco Chronicle, among many others. She also contributes humor commentaries to public radio's "Marketplace." She lives in Los Angeles with her chronic self-doubt. Jesse Jacobs left his position as senior vice-president of content at the Los Angeles-based IFILM.com in 2002 to pursue an MBA at The Wharton School, University of Pennsylvania. He previously served as founder and director of the Yahoo! Internet Life Online Film Festival and as a marketing executive at Yahoo! Internet Life magazine. Prior to entering the new media industry, Jacobs worked in television production for Fox Sports and CBS Sports. A native of New York City, he lives in Philadelphia. Leading the conversation is David Greene. David has been intimately involved with the dotcom universe since 1996, and is still smiling. He works as a software trainer, specializing in large organization implementations. You know, those huge programs that run the whole back-office of a company. David's been a member of the Well for nearly four years, and hosts the East Coast conference. He lives outside of Boston with his wife. They're owned by two of the world's most adorable long-haired dachshunds. Please join me in welcoming Jesse, Lori, and David.
David S. Greene (dsg) Wed 4 Sep 02 18:05
Thanks, Cynthia. Jesse and Lori, I first want to thank you for writing this book. As a veteran of a couple dotbombs with friends at a dozen others, I can attest to a remarkable resonance with entirely too many of the anecdotes. Many made me laugh out loud, and others created an involuntary shiver of recognition. Is there a lesson or moral that you would take away from all of this for people who may not have experienced it first-hand?
Jesse Jacobs (jessejacobs) Thu 5 Sep 02 10:20
Thanks for the intro, Cynthia and David. It's great to be here. I think that there are many lessons and morals that one can take away from the New Economy explosion, but, in my opinion, the one thing I hope that people who may not have experienced it first-hand take away is a positive effect, and not the negative ramifications that we've read about in the press. The dot-com, New-Economy, New-Media, whatever-you-want-to-term-it industry gave people confidence in their own ideas. People - yound and old, experienced and unexperienced - felt empowered to turn their ideas into something more than just ideas. Into companies. Into communities. Into lifestyles. Too many people don't consider themselves the type of person who can go off, pursue their idea, take a risk and start their own venture (and I don't mean this necessarily in the for-profit sense of the word). The dotcom boom gave people the confidence to take these risks. Yes, many failed. But, some succeeded, and few dotcom refugees actually regret their decision to take the risk of joining a startup. Sure, most, if not all, regret some of the decisions they made along the way, but the essential decision of taking a risk and pursuing one's idea remains a valid (and sensible) one for these people. So, for those who did not personally participate in the industry, I would hope that their reaction now is not "hah, I told you it was all smoke and mirrors!" I would hope it's still - and, yes this might seem 1999ish - a more positive response of "I can now pursue those ideas that once seemed unattainable for me."
David S. Greene (dsg) Thu 5 Sep 02 14:19
The specific stepping-off point of reference for the book was Kibu, which was to be a gathering place/portal/destination kinda something for teenage girls. I remember meeting a woman who was passionate about creating a company that would serve the gaming software needs of that same audience. Do you think that that particular group - 10-17 year old girls, have continued to miss out on niche sites and products aimed at them? It seems that at least someone has thought of them, but how does that group get the attention that has already been lavished on their male counterparts with Doom, Quake, Need for Speed and all the sports simulation games?
Jesse Jacobs (jessejacobs) Fri 6 Sep 02 06:21
Since Lori is the ex-Kibuer (Kibite? Kiblander? Kibittzer?) and since she writes frequently on young women issues, I'll defer to Lori on this question, but I would like to make one point. Those sports simulation gaming sites specifically market their product to an "interest group." That interest group is those people who are interested in these games. Of course, a very high % of those people are teenage boys, but I think the key point is that they don't explicitly market their site toward teenage boys. The same thing applies for many other gaming, skating, music, extreme sports sites. The market demo is skewed heavily toward teenage boys, but the marketing is always interest-oriented, not demo-oriented. They've segmented the market into those that are interested in sports games and those that are not. I think that the mistake that the Kibus of the world made is that they segmented the market into those that are teenage girls and those that are not. A more interest-oriented approach might have worked better. Lori?
Plaything for the Chortling Fiend (sd) Fri 6 Sep 02 12:35
Hi folk, welcome to the well. I notice that the reviewers on Amazon seem to be using your book as a punching bag because they are embarassed by their personal dotbom failures. Do you get a lot of that?
Lori Gottlieb (lgottlieb) Fri 6 Sep 02 13:30
Hi all, Lori here. And Jesse, the mortifying term people used at Kibu.com was "Kibuki," which I could never say with a straight face. As to #5's post about reviews of the book, the media has praised the book so lavishly that one might think these reviews were ghost-written by our parents. (For the record, they were not!) Wired even said the book "deseves a place on the bookshelf next to that other classic of digital bubble-popping, Michael Lewis' The New New Thing." (And no, I have no media Mafia connections. Sadly.) The response from readers -- in personal emails -- has been equally gushing: "best book of the era I've read"; "pant-wetting hilarious" (I kid you not). In fact, it's been like Oprah - I can't tell you how many emails have been like the musings of a PTSD (post-traumatic startup disorder) group: "That was MY story!" etc. Oddly -- or perhaps predictably? -- the comments on Amazon seem to be not about the book, but about a value judgment vis-a-vis startups. The positive comments speak to the book itself, but the negative comments aren't about the reading experience or the writing or what the folks in the book have to say (most of the book is a very personal, "inside" oral history in which the big "names" like Kurt Andersen, Peter Guber, Po Bronson, even the rapper Chuck D, as well as neophytes, share never-before-reported anecdotes and insights about their experiences). Instead, these nay-sayers are critiquing the phenomenon itself, or the fact that there's a book out that chronicles it. So you get these schizophrenic reviews talking about how the book is entertaining and witty... BUT... those pesky dot-com folks! Go figure. Our book is a collective memoir of the New Economy. If that's gonna bug people, they shouldn't read it. But don't shoot the messenger, y'know? I haven't looked recently at Amazon because my theory is: "Five minutes to read, four hours to get over." And why waste the hundred bucks at the shrink :) The funny thing is, people who DIDN'T have any experience in this world are utterly fascinated by the book. Seems it gives them a backstage pass into this alternate universe in a way the NYT magazine pieces or gossip columns or business pages never did.
Lori Gottlieb (lgottlieb) Fri 6 Sep 02 13:43
RE: David's question in #3. I went to Kibu precisely because of their mission to reach the teen girl demographic in an "empowering" way (can anyone use that word and not sound annoyingly freaking earnest?). I'd been in medical school at Stanford, but wherever I went -- the local cafe, a party -- I was surrounded by more dot-com folks than doctors. I'd get offers constantly: "A doctor? Why would you want to do THAT? Come work for my startup. You can actually MAKE A DIFFERENCE!" (Like, as a doctor, I wouldn't be "making a difference"?!) Because my first book was a memoir of my L.A. adolescence, and as a journalist I write frequently about issues affecting young women, I was truly excited by their so-called mission. (Looking back, I can explain my excitement with two words: Jim Jones.) Problem was, not all teen girls are alike (duh?). Kibu didn't know what it was or who its demographic was. Not just in terms of girly-girl teen girls vs. quirky intellectual teen girls, but also in terms of age range. (As I say in the book, "Was it targeting 13-year-olds, the period-obsessed; or 17-year-olds, the penis-obsessed?"). When someone described Kibu as "Yahoo! for Gen Y, but with an estrogen slant," I knew we were doomed. Empowering young women? There was no there there.
David S. Greene (dsg) Fri 6 Sep 02 19:43
One of the themes that seemed to pervade many of the stories was something that many tradtional, "old-economy" company executives would have trouble understanding; that is the belief that a company could start up with an expectation of success without any real focus on the product to be offered, a firm business plan explaining and mapping the path to a profit, or even a good sense (in many cases) of an anticipated target audience. Professors of Business everywhere must have been scratching their heads wondering how this was going to last. What would you attribute this phenomenon to?
Lori Gottlieb (lgottlieb) Sat 7 Sep 02 09:52
This is EXACTLY what the folks in our book talk about...how in the world they could have made these fundamental (and idiotic) mistakes. And I think two themes emerge: fear + idealism. I say in the book that, at Kibu, far as I could tell, the only product we produced -- and quite successfully, thanks to our savvy publicist (we were covered in everything from Time to Fortune to The Hollywood Reporter) -- were reams of splashy press releases... promising a product that didn't yet exist. And yet Fortune magazine included Kibu on their list of "Cool Companies"! So what if we had virtually no sponsor, no users, no viable business plan? We were "cool." Thats whats so odd you have highly successful investment bankers, lawyers, Hollywood moguls, company CEOS, and Harvard business school graduates jumping on the bandwagon leaving behind successful practices and companies...to run or work for a hologram of a company. People in the book are surprisingly candid about why. First, there was a fear that the next guy was going to beat them to the punch with the next big thing and the need to be "first to market" in your sector -- get your brand there, and worry about the product later; and second, there was a genuine sense of idealism that they really could change the way people do business. Of course, they DID change the way businesses were run, but in a sadly ironic way. Later, people came for the money, but in the beginning, it was "uncharted territory" -- and that excited people in our book like Kevin Wendle, a successful Hollywood player who cofounded the Fox network with Barry Diller in the 80s. One day, he says, he got a call from the entrepreneur Halsey Minor who said he wanted Kevins help in starting up this thing called CNET. Wendle, who was a TV executive, replied, CNET? Is that in the marine business?" Having the opportunity to build a business in this world about which few people knew much -- that was intriguing. But once everyone and their next-door-neighbor joined a dot-com, fear predominated. It was like the extortion business in the 1990s one contributor said. The young paper millionaires would say things like, "Etoys is going to crush Toys R Us, and if you don't come over here, you'll be a dinosaur." And of course, eToys crashed and burned. You can even see this fear in the investment banking community. Kurt Andersen (the former editor of New York magazine and co-founder of Inside.com -- and now the host of NPR's "Studio 360") talks about moving into new office space that housed a number of startups in New York and watching a banker from one of the big Wall Street firms knock on doors, cold-calling, asking people if they needed funding. It was Shel Silverstein's THE GIVING TREE! In light of today's Enrons and WorldComs, it's interesting how little accountability there was at these product-less, revenue-less companies. The contributors in our book discuss these outrageous scandals for which, for the most part, nobody was held accountable. Had these shenanigans gone on in an "old economy" company, you'd see, well, you'd see what we're seeing now with the crackdown on corporate misbehavior.
David S. Greene (dsg) Sat 7 Sep 02 10:40
Now that the frisson of excitement and sky's the limit optimism are gone, we settle into what's left. So what is left? Where do you see the trends of the new economy going? If it isn't pets and pharmacies, what do you believe will be the next wave? Or can we predict it given the uncertainty that has marked the past couple years on the Web and in the world?
Jesse Jacobs (jessejacobs) Sat 7 Sep 02 11:39
I'm reluctant to predict a specific trend or sector that will be the next BIG thing. The primary reason is that the promise of X being the next BIG thing often contributes to the demise of X as a viable and sensible business / industry. I've been at countless conferences or meetings where the goal is to predict the next BIG thing. That leads to a herd mentality where people and companies end up allocating money and resources to projects whose only basis is an expectation that this is where the next flurry of VC capital and TIME magazine cover stories. Of course, we "can" attempt to predict the next BIG thing. You hear people hype gaming, more sophisticated wireless communication, video-on-demand, PDAs-cum-cell-phones. Researchers and analysts attempt to predict this all the time. In fact, they get paid gobs of money to provide advice as to where R&D money should be spent. But, pre-9/11, who would have predicted that security-analysis consulting firms and security-device manufactures would have ballooned the way they have? So, rather than predict which New Economy trend will take off, I think the more pertinent question is how will the mission of New Economy companies and departments adjust. And, I think the answer there is clear: A trend toward more conservative, more sensible approaches. However, I firmly believe that risk and aggressive innovation are still key and invaluable elements of any New Economy strategy. Look at a company such as AOL. Here was one of the most innovative companies of recent time, and now some are predicting their demise due to their lack of innovation in the broadband market. So I would hope that the next iteration of the New Economy strikes a balance between sensibility and risk, between effective management of one's products and innovation.
David S. Greene (dsg) Sat 7 Sep 02 13:07
<< So I would hope that the next iteration of the New Economy strikes a balance between sensibility and risk, between effective management of one's products and innovation.>> That could also be restated as old-thinking vs. new-thinking. A hallmark of the boom was a preponderance of young kids fresh out of (or still in) school. The founder of Goosehead truly WAS a kid! Most of the survivors have, by necessity, deep pockets. Disney, eBay and Microsoft to name a few. True innovation often comes from those who don't have has much to lose by failures. Can the Microsofts and Disneys truly lead us to innovation? I know I'm straying a little from the actual stories in the book, but I want to circle around back to the psychology of what transpired. Who innovates? Who challenges us to try what hasn't been tried before?
Lori Gottlieb (lgottlieb) Sat 7 Sep 02 23:30
There's a great quote in the book from one of these "kids" who worked at a Web shop in NYC. She said that her company was flown, at great expense, to a conference called "Innovate Now" and her comment on that was something like: People didn't realize that you actually had to innovate something to qualify as "innovative."
Jesse Jacobs (jessejacobs) Sun 8 Sep 02 19:43
"True innovation often comes from those who don't have has much to lose by failures." True, but I don't believe that those that are necessarily big or have deep pockets cannot innovate. Sony, arguably the world's most recognizable brand (according to some studies), is also arguably the company that innovates the best. In Sony's case, the source that challenged them to try what hasn't been tried before was the continued curiousity of the company's two founders. In the case of Marc Cuban (of Broadcast.com fame), the source was his desire to listen to the basketball games of his alma mater Indiana University. Of course, both sources of innovation led to great wealth for Sony and Broadcast.com. And, sometimes the source of innovation can be the pursuit of great wealth, as we saw all too often in the late 90s.
David S. Greene (dsg) Sun 8 Sep 02 19:50
Good point. Lori, I know I shouldn't ask, but I can't help it. Would you join another startup? If so, why? If not, why not? Also, what were the enduring lessons and experiences for you?
Lori Gottlieb (lgottlieb) Sun 8 Sep 02 23:38
Ah...the Question, capital Q! I joke in the book that aside from my mother's perennial "Are you ever gonna get married," "Are you ever gonna join another startup" is the #1 question I'm asked these days. Not to sound like a total sucker, but yeah, I would join a startup...with a few disclaimers. I'd do my due diligence far more rigorously than I did when considering the Kibu editor-in-chief job. (In answer to several of my questions during the interview phase, the co-founder responded that the information was "confidential." Turned out "confidential" meant "we-haven't-a-clue.") I'd evaluate the track records of the folks in charge; I'd evaluate their business model; I'd think about their goals and how attainable, realistically, they seem. The usual. In the New Economy, many of us made the mistake of believing that "breaking the ossified rules" meant having dopey rules or NO rules... tossing out the baby with the bath water. Sometimes, "breaking the old rules" was a good thing, but there were many lessons to be learned from "your grandfather's business." Like, who, in the Old Economy, would join a company where pertinent information about the business was "confidential"? But in the New Economy, we did that all the time. So...why would I join another startup? For the same reasons I joined Kibu: the chance to build a thing you care about from the ground up; to be given tremendous responsibility and influence over how that business grows; to have the freedom to be creative without the bureaucracy of a huge corporate entity that's set in its ways. The enduring lesson: If you're gonna hop on a bus, make sure you know its destination.
David S. Greene (dsg) Mon 9 Sep 02 06:43
A couple of the stories in the book sounded like a throwback to the drug culture days of the 60's, when it was perfectly normal (and expected) to be under the influence of something at any given time. I was struck by the brownie story in the book. Can you talk about that a little?
Lori Gottlieb (lgottlieb) Mon 9 Sep 02 16:03
The "brownie" story, huh? Yeah, that's gotten a lot of attention. It's a story told by one of the book's contributors, Steven Overman, who moved from NYC to San Francisco to become the executive assistant to WIRED magazine co-founder Louis Rossetto. The morning of his first "All Company" lunch, Steven was hungry and went into the kitchen to get a brownie. WIRED had a chef, named Chuck, who was also on their masthead. After Steven gobbled down the brownie, Chuck said, "You didn't just eat that did you?" And Steven said he had, which prompted Chuck to yell out, "Steven ate the brownies!" Turned out there was sign next to them, which Steven hadn't seen, that said, POT BROWNIES. And Steven was horrified. He couldn't believe that this was a BUSINESS, that this was acceptable in an OFFICE. Even Louis Rossetto, the co-founder, found it amusing. A lot of people compare this era to the '60s, but in the book, most people say that they seem similar on the surface (drugs, anything-goes Zeitgeist, idealistic sense of "changing the world," etc.) but that the money made it different. I like Kurt Andersen's quote on this: "The dot-com era was different because it was about being rich in addition to changing the world." On the other hand, Alan Citron, a veteran L.A. Times reporter who ventured into New Media, put it this way: "I think the dot-com era is like the '60s: If you remember it, you weren't there."
Lori Gottlieb (lgottlieb) Mon 9 Sep 02 16:09
As for the drugs, I don't think it was necessarily considered "normal" (and it certainly wasn't expected) that people were on Ecstasy or whatever. It was "acceptable" in some situations, but not "normal." When we think of Wall Street in the '80s, with cocaine everywhere, no one compares that to the '60s. So it's not just the drugs that make people think of the '60s (because in addition to Wall Street, you've got that drug culture in Hollywood, and that's not compared to the '60s either), but the crusade people believed in (or convinced themselves that they believed in): "changing the world" in a radical way.
this tastiness cannot be carried even by by both hands (sd) Tue 10 Sep 02 08:05
POT BROWNIES graphics department only
David S. Greene (dsg) Tue 10 Sep 02 09:04
There are so many positively focused, successful (and even some profitable!) dotcoms to talk about. What are the qualities that these success stories share, as you see it?
Lori Gottlieb (lgottlieb) Tue 10 Sep 02 10:44
Jesse can talk a blue streak about this, so I'll defer to him, other than to say that the people in the book who have successful companies are the ones who realized that it takes TIME to build a business, that it isn't just about "slap up some URL on the Web, and THEN worry about how to run the thing." Everyone remembers Hollywood Stock Exchange (HSX.com), the larger-than-life Hollywood foray into the dot-com space - they threw those garish Oscar bashes two years in a row. All described in the book, as told by their former marketing executive. Well, this person tells us in the book that when he first got to L.A. to meet the company co-founders, there was huge billboard on Sunset Blvd. -- "the" pricey strip for billboards -- that read: "HOLLYWOOD STOCK EXCHANGE: HSX.com." And he was like, These two Wall Street bankers are spending s--tloads of money to advertise a site that when you log on, says nothing more than "Coming Soon"! It was that "first-to-market-get-the-brand-out" backward thinking that the "smart" startups didn't indulge in. One of our contributors, Auren Hoffman, who in his 20s founded a staffing exchange firm (bridgepath.com) that's still alive and kicking and doing well today, talks about the fact that he got funding after the "market correction" (how's that for a euphemism?) because his investor saw how frugal he was -- taking the cheapo red-eye flight, staying not in a hotel but with an employee's parents (!), etc. No $500,000 launch party (this always amused me because often, there was nothing to "launch" yet). No oversized staff with oversized salaries. And this is how the successful ones survived the downturn and are prospering. They're using Old Economy business rules to build New Economy companies. And that, IMHO, is how it should be. Jesse?
Lori Gottlieb (lgottlieb) Tue 10 Sep 02 10:48
SD - hee hee! I read that pot brownie story at my L.A. book signing recently, and it got quite a rise out of the audience. Oddly, in the Wired review, they quoted what I think are even more hilarious and telling anecdotes, but for some reason, the pot brownie one seems to be a fave.
Jesse Jacobs (jessejacobs) Tue 10 Sep 02 13:01
Yes, there have been many successful dotcoms to talk about. The Amazon's, Yahoo!'s and Ebay's of the world. I'm not quite sure what you mean by "positively-focused," though. Are DrudgeReport, FuckedCompany and eUniverse.com successful? Absolutely. Are they positively-focused? I'll leave that for the philosophers in the audience. So, what are the attributes that these companies share? Well, the primary attribute is the mission and skill-set of the founders (Bezos, Yang, etc..). These were people that entered into the market with a mission that was either near and dear to their heart or with exemplary engineering / technology skills. While I would venture to comment that they hoped to make a buck or two off of their company, I do not believe that was their primary goal. That - in and of itself - differentiates them from the majority of dotcoms out there. Many dotcoms (that flopped) were started by highly intelligent business minds who saw an opportunity to enter into what seemed to be an attractive market. The growth potential was huge. The short-term wealth was alluring. So, when it all went up in smoke, it was on to the next venture for these serial entrepeneurs and opportunistic businessmen. But, for those like Drudge and Yang, it wasn't necessarily a business decision that allured them early on. It was a need in the market that they - as experts - could fulfill. Another attribute was good fortune. If University of Indiana basketball games were available through DirectTV in the city where Marc Cuban lived, maybe he would never have created Broadcast.com. And, if he never created Broadcast.com, he never would have sold it to Yahoo! for $6 billion. ( Think Yahoo! wants that one back?). The final attribute is patience. Think back to the early days of AOL when nearly everyone predicted their imminent collapse due to poor service and ineffective pricing. Case et al could have packed it in and sold the company or packed up shop. But, their patience and ability to ignore (to some degree) the drastic sways in public opinion got them through those difficult years.
Lori Gottlieb (lgottlieb) Tue 10 Sep 02 18:36
See, this is why Jesse's the one at Wharton! That's what I was TRYING to say (at least the part about patience), but Jesse did it far more eloquently.
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