The New New Thing by Michael Lewis

a book review by Richard Seltzer, seltzer@samizdat.com,


If you pick up The New New Thing, don't expect it to help you understand how the Internet business environment works, or how to create a successful Internet startup. For that kind of insight read books like The Cluetrain Manifesto by Christopher Locke, Rick Levine, David Weinberger, and Doc Searls, The Cathedral and the Bazaar by Eric Raymond, and even High Stakes, No Prisoners by Charles Ferguson.

The New New Thing is really an old old kind of book, with more in common with biographies of 19th century adventurers and soldiers of fortune than with books about Internet startups and the new economy.

It relates the wild and unlikely tale of Jim Clark, with lots of gossipy detail and no useful information. His ability to guess what the "new new thing" will be and to make billions from it, is presented as an unaccountable, almost magical power. Wow! he sets a record by starting three multi-billion-dollar companies -- Silicon Graphics, Netscape, and Healtheon. And our sense of wonder is heightened by the lack of any connection to practical reality, any lessons of experience that someone could learn from this.

This is a good read, a quick read, a book that lovers of celebrity biographies will enjoy. But the same could be said for The Devil Drives: a Life of Sir Richard Burton (the 19th century explorer/adventurer) by Fawn Brodie. "In a world where there seemed to be very little left to be discovered, he sought out the few remaining mysteries. He penetrated the sacred cities of Mecca and Medina at great risk and wrote detailed descriptions. He was the first European to explore the forbidden Moslem city of Harar in Somaliland, which promised death to any infidel. Then he turned to the mystery that had fired the curiosity of Alexander, Caesar, and Napoleon, 'the greatest geographical secret after the discovery of America,' the source of the white Nile. Enduring great hardship, he succeeded with John Hanning Speke in discovering Lake Tanganyika, but just missed Lake Victoria, a failure that embroiled him in controversy and tragedy."

Jim Clark, like Sir Richard Burton, had incredible luck or instinct or both, succeeding against all odds, time and again. But unlike Burton, Clark's life was never at stake and Clark doesn't seem to have shown any interest in the meaning of what he was doing. "Richard Burton published forty-three volumes on his explorations and travels... In addition, he translated sixteen volumes of the Arabian Nights, six volumes of Portuguese literature, two volumes of Latin poetry, four volumes of folklore -- Neapolitan, African, and Hindu -- all of which have extensive annotations that help to illuminate Burton's character." Clark, instead of ruminating on the reasons for his success and the nature of today's wild business world, used his spare time to supervise the building of high-tech sailboats. And his biographer does nothing to make up for the central character's apparent lack of self-awareness.

The biographer keeps his eye on the player instead of the ball and the game. Imagine you are watching a World Series game, and the camera remains focused on Mickey Mantle, and the announcer talks about nothing but Mickey Mantle throughout the game. Every once in a while, the ball happens to come to center field and Mickey catches it. Three times, Mickey comes to the plate, and three times he hits home runs. But much of the time, Mickey just sits on the bench while his teammates bat, and the camera captures his face in extreme closeup, and we're entertained with flashbacks and anecdotes about his personal life. Yes, that's entertainment, but that isn't baseball. And yes, this book is very entertaining, but it gives you no idea at all of the game that Jim Clark played in, or how others could do well at that game.

Particularly telling is the description of how Clark ended up founding Netscape. He is portrayed as having been the mastermind behind the "interactive TV" boondoggle, having convinced the rest of the high-roller business world that the public yearned for movies on demand and prepackaged info to be pumped into homes through high-tech boxes connected to TV sets. Lewis indicates that that was what Clark had in mind when he hired Marc Andreesen, creator of the first Web browser for PCs -- Mosaic. Lewis says it was almost by chance that they turned their attention to the Internet as an alternative.

But the fundamental premise of "interactive TV" was flawed and was diametrically opposed to the Internet style. It wasn't "interactive" at all. The idea was for a small number of mega-companies to deliver high-priced content to passive consumers. The idea was to let them consumers have a limited number of choices -- such as which product to buy and how to pay for it. The idea was to keep the consumer locked in to a single vendor, so that multi-billion-dollar investments could be recouped and yield enormous profits.

The Internet, on the other hand, was primarily about people connecting with other people, people creating their own content and self-publishing it, people creating their own businesses on a shoestring and reaching global audiences. The Internet was about diversity, about a multitude of choices, about the beautiful kaleidoscopic anarchy of millions of people connected directly to one another.

As it turned out, Clark's Netscape gave the Internet an enormous boost, with a new browser that speeded up access to Web pages by about four-fold, without the user having to spend a penny. That made the Web fun and useful even at the 14.4 modem speeds that were common in the fall of 1994 when that first Netscape browser appeared; and speeded up the acceptance of the Web by the general public and by business.

But, if Lewis is right, Clark was clueless about what he was doing and what its impact might be on the global economy. He was just as clueless and lucky as Columbus stumbling upon America.

The other instances of multi-billion-dollar dumb luck -- Silicon Graphics and Healtheon -- were matters of mere money, probably without much long-term significance. But it's Healtheon that most of the book deals with -- a questionable business model, sold to the investing public largely on the reputation of Clark's previous successes, at a time when the market was incredibly gullible. And that part of the story doesn't seem at all adventurous or worthy of our awe.

Here is a man with over a billion dollars in assets investing a few tens of millions of dollars in another idea, and succeeding in fooling the public into thinking that that idea could work, without any tangible evidence, and hence raising the value of the stock to billions. His risk was minimal, and his gain was enormous. That's more the story of a successful swindler than a Columbus.

And once again, the biographer gives us no sense of how the man did what he did, how this Houdini made Internet funny money appear and disappear; and no sense of the game and league in which Clark was just one player; and, of course, no sense of the consequences of his actions had on anyone but himself and his close associates.


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