Compléments de Multitudes 11

After the Dotcom Crash

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Texte original en anglais de art107, rub22
«Work hard, have fun, make history» (

In this chapter I will focus on a few dotcom histories, as told by true believers who were in the eye of the storm. The accounts and analyses were written in the immediate aftermath of the tech wreck. If 2000 was the year of the NASDAQ crash; inevitably 2001 was followed by pitiful dotcom biographies. As a theoretical entrée I will use concepts of Manuel Castells, the Berkeley geographer and author of the widely acclaimed Network Society trilogy. In 2001 Castells published The Internet Galaxy, an overview of recent Internet research from a social science perspective. After having discussed Castells’ ambivalent take on the New Economy I will browse through David Kuo’s Dot.Bomb (about the e-tailer Value America) and Boo Hoo, the story of’s founder Ernst Malmsten. From there I will look into a few broader analyses, Michael Lewis’ The Future Just Happened and Brenda Laurel’s Utopian Entrepreneur, reflecting upon her vanished girls games Purple Moon venture. What is striking in all these different narratives is the desire to capture the excitement, the drive to «get there first», and the strong belief in a slavery-type (yet playful) hard work. The dedication to network technologies and trust in commercial applications is overwhelming. Remarkably, in all these works the ideological origins of the dotcom model remain unquestioned, no matter how different the background of the authors may be. Only few years after the bubble, the dotcom stories are about to fade away for good. Let’s therefor take back the some of the elements of the dotcom ideology and how they viewed upon during the Internet’s first recession of 2001-2002.
In retrospect the dotcoms are presented as allegories of the ‘greedy nineties.’ Internet start-ups bundled mythologies of entrepreneurial risk taking with a promise of «prosperity for all.» There was a place for anyone under the sun in this ever-expanding technology universe. With the computer geek and online day trader as its heroes, and the venture capitalist in the role of godfather, the dotcom saga tells the story of techno-culture becoming pop. For a short while, around 1998-2000, the New Economy rhetoric became hot and glamorous. The tech stocks got onto the radar of the mainstream media. Business magazines such as Red Herring, Fast Company, The Industry Standard and Business 2.0 gained high visibility. Internet reporting was all over, from the entertainment sections to media pages and IT supplements. The Internet had for good left to be the exclusive domain of technical experts and entered the world of commerce.
The late 90’s bull market convinced analysts, investors, accountants and even regulators that as long as stock prices stayed high, there was no need to question company practices. That changed drastically in 2000. While publicity after March 2000 focused on the ever-rising list of dotcom bankruptcies, 2001 overshadowed these cases by a much bigger overall recession, September 11 and serious collapses such as the energy giant Enron and the telco Global Crossing. Enron’s demise has been called the first morality play of the post-boom era and the enormous media attention it generated indicates a symbolic turn. «After Sept. 11, confidence and optimism waned. And then, as if to confirm that an era had ended, the nation’s seventh-largest company, one that had reinvented itself using the tools of the moment-technology, faith in markets, canny lobbying and an ability to exploit deregulation to create new businesses-went poof.»[[Richard W. Stevenson, Why a Business Scandal Became a National Spectacle, New York Times, February 17, 2002.
According to NYT’s Bill Keller, Enron «embodied the get-obscenely-rich-quick cult that grew up around the intersection of digital technology, deregulation and globalization. It rode the zeitgeist of speed, hype, novelty and swagger.» Enron once was a «thinking-outside-the-box, paradigm-shifting, market-making company. In fact, it ranked as the most innovative company in America four years in a row, as judged by envious corporate peers in the annual Fortune magazine poll.»[[Bill Keller, Enron for Dummies, New York Times, January 26, 2002. The core-and most profitable-part of Enron was its web-based energy trading platform. The Internet turned out to be the ideal vehicle. The blind faith in the New Economy had become paradigmatic for the late nineties anything-goes attitude. Some therefor blamed it on the sixties, liberalism, the born-again materialists, Clinton or even the environmental movement.[[Timothy Noah, Blaming Liberalism for Enron,, January 21, 2002. Keller: «Petroleum was hopelessly uncool; derivatives were hot. Companies were advised to unload the baggage of hard assets, like factories or oilfields, which hold you back in the digital long jump, and concentrate on buzz and brand.» Accountants who tried to impose the traditional discipline of the balance sheet were dismissed as «bean-counters,» stuck in the old metrics. Wall Street looked to new metrics, new ways of measuring the intangible genius of innovation, and the most important metrics were the daily flickers of your stock price. When the stock plummeted, Enron immediately died. Keller sums up the change of mood, so different from a few years earlier: «The louder someone yells «free markets!» the closer you want to look at his files (assuming they have not been shredded).» Eventually, the purpose of business itself was at stake: making money or creating value, providing a service for customers?[[«Perhaps we, as a society, have become so accustomed to associating the act of running a business with the act of making money – or rather, the act of booking revenue in accordance with the arts of accountancy — that corporate analysts appear not to have had an institutional framework capable of distinguishing between an accounting trick and a business process, between a revenue stream and the production of value.» (Jonathan Siegel, posted by Steve Brant on the Triumph of Content list, January 20, 2002).
One of the ways to talk ones self out of the crisis is to disassociate the ‘pure’ and innocent, spiritual and alternative (Californian) Internet from the ‘dirty’ money laundering, gambling Wall Street mafia. Kevin Kelly, Wired editor and author of the 1998 bible New Rules for the New Economy, retrospectively smuggles away his personal responsibility into the whole affair. «Three trillion dollars lost on Nasdaq, 500 failed dotcoms, and half a million hi-tech jobs gone. Even consumers in the street are underwhelmed by look-alike gizmos and bandwidth that never came. This revised view of the Internet, as sensible as it is,» Kelly writes in The Wall Street Journal, «is a misguided as the previous view that the Internet could only go up. The Internet is less a creation dictated by economics than it is a miracle and a gift.» Kelly hastily runs away from the CEOs he hung out with during the roaring nineties. In order to cover up his own involvement he then praises the army of amateur website builders. «While the most popular 50 websites are crassly commercial, most of the 3 billion web pages in the world are not. Only thirty percent of the pages of the web are built by companies and corporations like The rest is built on love, such as or The answer to the mystery of why people would make 3 billion web pages in 2,000 days is simple: sharing.»[[Kevin Kelly, The Web Runs on Love, Not Greed, Wall Street Journal, January 4, 2002. It is a comfort, for both who missed out and those who lost their savings, to get such suave words. Voluntarism will be the penance for all the bullish sins.
John Perry Barlow, co-founder of the Electronic Frontier Foundation, has a more down-to-earth approach. Speaking early 2002 Barlow admits, being an Internet guru isn’t what it used to be. «I lost probably 95 percent of my net worth. But it’s been good for the Internet, and in the long term it’s going to be very good for the dot-communists. Never has there been a time when there are so many young people who have been poor and then rich and then poor again. I think it’s an educational experience that teaches you what’s valuable in life. To have a whole bunch of money at a really young age and see how completely useless it is-it trains a lot of folks in the real value of things.» Like Kelly he interprets dotcommania as a hostile takeover attempt, lead by forces from the past. Barlow refrains to name names, pointing for instance at venture capitalists, investment banks, or other established industries. Instead he uses the familiar biological metaphors. «The whole dot-com thing was an effort to use 19th and 20th century concepts of economy in an environment where they didn’t exist, and the Internet essentially shrugged them off. This was an assault by an alien force that was repelled by the natural forces of the Internet.» However, unlike Kelly, Barlow is admitting his own errors in all of this, «trying to evaluate where to go because we’ve so massively screwed up.» [[Rachel Konrad, Trouble Ahead, Trouble Behind, Interview with John Perry Barlow,, February 22, 2002,
During the Dotcom wave «workers got totally wrapped up in greed,» a Sydney IT-professional told the Australian Financial Review. «They demanded huge salaries, changed jobs every 12 months-and now it’s payback time.» There is talk of retribution on the symbolic analysts, resulting in white-collar blues. «Suddenly, the old economy is outpacing the darlings of the new economy. If you can work a lathe or lay a concrete slab, you are in demand,» the Financial Review reporter explains. Like everyone else, knowledge workers are «slaves to the forces of supply and demand.»[[Stephen Long, White Collar Blues, The Professional Job Crisis, Australian Financial Review, February 23-24, 2002. This old hat, sold as a revelation, can only be understood in the context of the dotcom promises about everlasting hyper growth, the belief that technology would create new markets but itself would supersede economic laws.
It was time for the blame game. As a sign of backlash, the Australian Commonwealth Bank executive David Murray, in a speech at the 2002 World Congress on IT, warned for the «temptation of making IT a strategy in itself.» Proud of not having adopted the dotcom model, Murray signaled that technology was no longer providing his bank with productivity gains. «If every desktop a business puts in place is a royalty payment, if that desktop is used for staff emails, or for downloading pornography and hence creating legal risks (..), if technology isn’t meeting the requirements, then you should question its value.» He even went as far to accuse IT for wrecking the world economy. «Microsoft says information technology is going to lead the growth of the world economy. Well, let me tell you the IT industry in the US has single-handedly wrecked the world economy because the promises were large and by the time they were turned into investor promises at the casino-end of the equity markets, then the investments were entirely unrealistic.» [[Katrina Nicholas, CBA chief attacks IT for wrecking world economy, Australian Financial Review, March 1, 2002.See here, technology firms and capital, accusing each other for the dotcom crash and the following recession.
Underneath the dedicated excitement of the late nineties we can find a deep sense of inevitability. I am hesitant to say fatality because that would be too beautiful of an ending. Unfortunately, dotcoms lacked suspense. As other aspects of the ‘transparent society’ they were driven by essential human blandness. Generation @ were nothing but ordinary people and there is perhaps no secret which needs to be revealed. There are no signs of despair, or hope. At best there is white-collar crime. The dotcoms, filled with excitement over business opportunities, lacked sufficient conspiratorial energy. It is questionable whether the schemes were white-collar crime. There is a sense of cold cynicism about a gamble lost. No depth, only light. There was no thing as wrong doings. «Rules were for sissies. These were invincible innovators, who sneered at rules.» (Keller on Enron) Management guru Tom Peters had called to unleash revolutions, break the rules, smash all system-and so they did.
The key is, it all went so fast. It was over before the antagonists had any idea what they were doing. Approaching the magic year 2000 everything seemed so right. The effects of time compression are part of the ‘organized innocence’ on display here. The dotcommers are still baffled. Claiming that everything would be different they were unaware of the historical reality that every revolution eats it own children. The unjust crisis without cause overwhelmed the heralds of virtual enterprise, with hardly anyone to blame. Lawyers may have advised the dot.bomb authors not dig too deep. Class actions may be taken. That’s only one plausible explanation for the stunning lack of (self-) analysis. More likely is the superficial and packaged experience, sensed as something uniquely exciting, the dotcom generation, worldwide, went through. Dotcom antagonists had history on their side. Opportunities could only multiply. So what went wrong?
Let’s look into theory. Until late 2001 there had been the widespread belief that the IT-sector could not be affected by economic downturns. There would always be strong demand for technology products and services and after many decades of growth the tech industry simply could not imagine that it could be hit by a recession itself. Moore’s law, the doubling of chip capacity every 18 months was presumed to be applicable to the tech-business. Even Manuel Castells in his timely update after his thick Network Society trilogy called The Internet Galaxy, is not free of this dogma. He writes: «For all the hype surrounding the firms, they only represent a small, entrepreneurial vanguard of the new economic world. And, as with all the daring enterprises, the business landscape is littered with the wreckage of unwarranted fantasies.» Castells can only see bright futures ahead and uncritically copy-pasts Maoist-type forecasts e-commerce growth predictions into his text, fabricated by the Gartner consultancy firm.
Castells denies that economic growth in the 90s was «speculative or exuberant, and that the high valuation of technology stocks was not a financial bubble, in spite of the obvious over-valuation of many firms.» Unlike his proclaimed «strict analytical purpose» Castells refrains to analyze the ideological aspects of the New Economy paradigm and its agents such as the ‘business porn’ magazines with its conferences, management celebrities and its God-like IT-consultants. Instead he neutralizes the term New Economy by lifting it to a general level of all economic sectors that introduce network technologies. The «network enterprise», for Castells, is neither a network of enterprises nor an intra-firm, networked organization. «Rather it is a lean agency of economic activity, built around specific business projects, which are enacted by networks of various composition and origin: the network is the enterprise.»
Unlike the New Economy prophets such as Gilder, Peters or Kelly, Castells does not sell a religion. He abstains to electrify his readership with upbeat concepts. The Berkeley professor, a poster boy for moderate academia and role-model amalgam of Silicon Valley and Haight-Ashbury, ‘correctly’ points at the two sides of the coin in an ongoing attempt to reconcile industry and community. One thing Castells does not want is to upset technologists and business people. He switches back and forth, praising the ‘real’ changes of IT while playing down the long-term effects of the speculative bubble. As a techno realist and «natural capitalism» sympathizer, Castells favors regulation and sustainable growth models. Facing the legitimacy crisis of governments Castells still sees the necessity of political representation and effective public policy. «Until we rebuild, from the bottom up and from the top down, our institutions of governance and democracy, we will not be able to challenge we are facing.» These are huge tasks and the Internet gets a huge responsibility projected onto it to solve pretty much all of today’s problems. Castells did not travel to the edges of the Galaxy to explore possible limits of his own discourse. For him, society equals network. We’re drawn deeper and deeper into cyberspace. There is no room to question possible limitations of the network as a metaphor and question its agenda. As for many techno-determinists, Castells declares history a one-way street, leaving no option to quit the network society.
Within Internet theory, Manuel Castells represents the third wave researchers of pragmatic social scientists (after the computer scientists and cyber- visionaries). For Castells the impact of network technology on business, culture and society is everything but empty («betting on the technological revolution was not a foolish idea»). On the other hand, the current economic laws are still in place. Ever since the mid nineties financial markets are dictating the technology sector, not the other way round-and Castells is well aware of this fact. Technology in itself is no longer the driving force. «The new economy is not the fantasy land of unlimited high economic growth, able to supersede business cycles and be immune to crises.» Two pages further Castells, again, switches position. «To consider that the Internet or genetic engineering are the driving forces technological engines of the 21st century economy, and to invest in firms that are producers or early users of these major technological innovations, regardless of their short-term profitability, do not seem irrational.» See the Western mind jojo-ing. In the society of risk, theory can no longer produce a fixed morale from a meta perspective. Neither does Castells wants to degrade himself to «selling» the network society concept in a PR fashion. «In the Internet Age, characterized by systematically volatile, information-driven financial markets, the ability to live dangerously becomes a part of the business way of life,» Castells write. But how dangerous is Castells? His adverse of both speculative thought and ironic negativism puts him in a somewhat difficult position. Like many academics Castells wants to be part of it all while safely covered by an insurance policy. As a result Castells’ careful positioning lacks risk taking, avoiding both speculative futurism and critical analysis. A worthy position, but not very innovative. Providing the reader with an impressive overview of new research, unlike the accelerated Zeitgeist, the outcome of The Internet Galaxy cannot be other then modest. However, these tempered thoughts do not really help us in understanding the wild fluctuations in the State of the Internet.
No matter how much realism prevailed, dotcommania happened, and its history needs to be analyzed. According to Castells «a typical Silicon Valley sequence in the late 1990s started with a daring business plan, and with some knowledge of how Internet technology could contribute to it, yet focusing more on business innovation rather than on technological innovation. After all, most technology these days is open source or ‘off the shelf’: the real issue is what to do with it, and for this the essential item is talent.» I would rather say that the crucial step is to shape, armor and then blow up concepts, ‘memes’, and ideas that then become operational entities. A productive discourse is not mere talk. The creation of a compelling ideology is not just a matter of talent. The killer app is not just people but the collective ability to mobilize and direct the Network Spirit. There could only have been a dotcom doctrine because it had drawn jigsaw ideas from elsewhere and energized these different pieces towards the Future. The dotcom narrative drew from an accelerating feedback loop with the Zeitgeist, riding on much bigger currents such as privatization, deregulation and globalization, embedded in a structurally unstable situation, caused by «information turbulences.» Castells knows the limits of his bureaucratic categorizations and counters his own quasi-neutral instrumental rationalism with ambivalent conclusions.
Throughout his research, which covers the ‘dotbomb’ March 2000-March 2001 period, Castells makes a few critical remarks about the (dominant?) ‘exuberance’ discourse. One could label this viewpoint, as if there had only been a «speculative financial bubble» as old economy liberalism. Castells: «I think the ‘bubble’ metaphor is misleading because it refers to an implicit notion of the natural market equilibrium, which seems to be superseded in the world of interdependent global financial markets operating at high speed, and processing complex information turbulences in real time.» Both the overvaluation of tech stocks in 1996-2000 and the following devaluation happened «regardless of the performance of companies.» Castells is searching for a valuation of the network economy outside of the financial markets-and fails to find it. Castells describes the 2001 downturn as «a new form of business cycle.» What he attempts here is the heroic task to unravel the technology sector and the stock market. He is right in saying that the volatility is systemic. Marxists would perhaps describe it as a ‘permanent crisis.’ It is significant that Castells does not blame fraudulent schemes but the «nay sayers of the old economy of the industrial era.» I disagree here. But Castells’ intent to think together business and society is the right way to go. There is no ‘pure’ Internet any longer that can be situated outside of the market. Despite the utopian work of coders, artists and activists, the Internet cannot easily be disassociated from the capitalist logic. Castells’ message: we live inside the Internet Galaxy (and do not pretend we do otherwise). His closing remarks are the following: «If you do not care about the networks, the networks will care about you. For as long as you want to live in society, and this time and in this place, you will have to deal with the network society.»
After the dotcom crash technological innovation will remain economically driven. The fight has just started over the terms and conditions under which a techno renaissance could unfold itself: free software, open source, copyleft, barter, free money, etc. The role of financial markets and large corporations in this process is a highly disputed-and yet unclear-one. If the trajectory from bubble to burst is not to be repeated, the Internet community at large need to quickly dream up alternative economic models, otherwise the VCs will, again, knock on the door.
It is an ironic detail that the dotcon ur-parable, Michael Wolff’s Burn Rate, already appeared in 1998, way before the phenomenon got its ‘dotcom’ label. Wolff, a «leader of an industry without income» describes the 1994-1997 period which his New York new media publishing company turned out to be an ‘Internet venture’, attracting venture capital. Michael Wolff was the creator of the best-selling NetGuide, one of the first books to introduce the Internet to the general public. Being one of the first movers he quickly turned his company into a ‘leading’ content provider. With a ‘burn rate’ of half a million a month Wolf New Media LLC subsequently got dumped by VCs. Michael Wolff explains the hype logic under which he operated: «The Internet, because it is a new industry making itself up as it goes along, is particularly susceptible to the art of the spin. Those of us in the industry want the world to think the best of us, Optimism is our bank account; fantasy is our product; press releases are our good name.»[[Michael Wolff, Burn Rate, London: Orion Books, 1999, p. xii. The company operated under Rosetto’s law, named after Wired founder Louis Rosetto that says that content, not technology, is king. Early Internet entrepreneurs with a media and publishing background such as Rosetto and Wolf believed that technology would become a transparent and low-priced commodity. Revenue streams would come from marketing partnerships, advertisement, direct sales and most of all, content replication. Views diverted over the issue if consumers were willing to pay for content. So far Internet users would only pay for hardware, access and, to a certain level, for software. «On the West coast, the Wired disciples believed information wanted to be free; here in New York they blissfully believed information wanted to be paid for.»[[Michael Wolff, p. 63. In Burn Rate there is a, in my view, accurate description of Louis Rosetto’s Amsterdam-based magazine Electric Word and the climate in the early nineties which let to their move to San Francisco (not New York) in order to found Wired (described in the chapter ‘How it got to be a wired world’ pp. 26-51). Neither models worked. Users were mistaken for customers. Around the same time Michael Wolff left the scene, the nearly bankrupt Wired, after two failed IPOs, in early 1998 got sold to the publishing giant Condé Nast. Wolff: «My early belief that the Internet was a new kind of manufacturing and distribution economics, was replaced.»(p. 328).
Dotcoms became victim of their own speed religion. The dromo-Darwinist belief in the ‘survival of the fastest’ (you are either one or zero, with nothing in between) dominated over all other considerations. The ‘amazing over-the-horizon radar’ capacity (John Doerr) broke down almost immediately after first signs of a recession set in. The hyper growth dogma and drive towards the dominance of a not yet existing e-commerce sector overshadowed the economic common sense, fuelled by the presumption of some big, very big, out there, an opportunity, as blank and beautiful as virgin, waiting to be snatched.
A dotcom could be defined by its specific way of financing, not by its entrepreneurial approach or technology focus. There was hardly any emphasis on research (‘too slow’). The domination of high-risk finance capital over the dotcom business model remains an uncontested truth. Dot companies were depending on capital markets, not on their customer base. Michael Wolff sums up what was going to be a dotcom mantra: «the hierarchy, the aristocracy, depends on being first. Land, as in most aristocracies, is the measure. Not trade. Who has the resources to claim the most valuable property – occupy space through the promotion of brands, the building of name recognition, the creation of an identity – is the name of the game. Conquer first, reap later.»[[Michael Wolff, p. 8.
David Kuo’s Dot.bomb is perhaps the most accessible dotcom story of its genre. Unlike Michael Wolff with his investigate new journalism style, Kuo lacks the critical ambition and just wrote down what he experienced. The book tells the story from an employee perspective about the rise and rise and sudden fall of the retail portal Value America.[[ (this is the URL of Value America as kept alive inside one of the worlds biggest web archives). Craig Winn, a rightwing Christian with political ambitions who already had gone through an earlier bankruptcy case with Dynasty Lighting, founded the retail portal in 1996. The basic idea behind Value America was to eliminate the middlemen and ship products directly from manufacturers to consumers. Winn got powerful financial backing but the portal didn’t quite work and attracted only few customers, offering poor service to its clients. The company was spending too much and a company coup ensued. The board of directors eventually booted Winn; a short time later, in August 2000, it closed down.[[Value America’s downfall from $74.25 a share on April 8, 1999 to $2 one year later made VA one of the first in a long series of dotcom crashes. John A. Byrne in Business Week Online, May 1, 2000 wrote a stunning reconstruction of Value America’s doings.
Value America is a perfect example of a dotcom scheme which had the coward mentality of messing up, knowing that someone else will clean up later, as an underlying logic. David Kuo: «We were supposed to do the Internet shuffle-get in, change the world, get rich, and get out.»[[David Kuo, Inside an Internet Goliath – from Lunatic Optimism to Panic and Crash, London: Little, Brown and Company, 2001, p. 305. The New Economy could only function under the presumption that in the end the ‘old economy’, in one way or another, was going to pay the bill. Either a next round of VC money, investments of pension funds or institutional investors, banks, employees or day traders, somebody was going to bleed. In dotcom newspeak this scheme was better known as ‘prosper’. Everyone was going to ‘prosper’. Not from the profitability of e-commerce but from large sums of money that would change hands quickly, in a perfectly legal way, covered up by official auditing reports, way before the world would find out about the true nature of the New Economy.
Towards the end of his account, David Kuo wonders why events didn’t turn out the way they should. «We discovered that the prevailing wisdom was flawed. The Internet is a tremendous force for change, but the industry chews up more folks then it blesses.» As a true Darwinist of his age, Kuo admits that chances of getting rich that quick and easy weren’t really that high. While in Las Vegas, looking at an IMAX movie about the Alaska gold rush of the 1890s. «More than hundred thousand people ventured near the Arctic Circle in search of their chunk of gold. Of those only a handful ever found anything of any worth. A few thousand covered the cost of their trip. Most came back cold and penniless. Thousand froze to dead.» It is in this IMAX-cinema that David Kuo gets his revelation, days before Value America is about to collapse. «The truth hit me over the head like a gold miner’s shovel. Despite the hype, headlines, and hysteria, this was just a gold rush we were in, not a gold mine we found. We might look like hip, chic, cutting-edge, new economy workers, but in fact, a lot of us were kin to those poor, freezing fools, who had staked everything on turning up a glittering of gold.»[[Kuo, p. 306.
The comparison with the 1890’s gold rush might be attractive explanation for those involved. The gold rush narrative reinterprets business as lottery. There were no concepts or decisions, just chance statistics. The right historical parallels would perhaps be tulipomania (Amsterdam, 1636), the South Sea bubble (UK, 1720) or the Roaring Twenties before the 1929 stock market crash. Compared to the Gold rush there was no hardship during Dotcommania. Long hours were voluntary and compensated by parties and stock options. Besides some social pressure to comply there was no physical endurance to speak of. All participants are still in an ecstatic mood and would go for it again, if they could. None of the dotcommers froze to dead. It was good fun. As the now famous quote of a analyst says: «For the first nine months of its existence, the company was run on the economic rule of the three C’s-champagne, caviar and the Concorde. It’s not often you get to spend $130 million. It was the best fun.»[[London Telegraph, May 19, 2000., a fashion, sports and lifestyle venture, is other case of the pursuit of arrogance. Sold as entrepreneurial courage it got into the fortunate position to neglect all existing economic laws and fool around with investors’ money. was destined to be become a global e-tailor empire. Way before a single item was sold it got valued at $390 million. Founded by two Swedes, Ernst Malmsten and Kajsa Leander in early 1998, when the New Economy craze picked up in Europe, boo was supposed to become the first global online retailer of sports and designer cloths, «using only the most cutting-edge technology.» Boo Hoo is Ernst Malmsten’s stunning dotcom hubris account and reports of the excitement and easiness to collect millions for a hyped-up business plan. London-based got backing of the Bennetton family, a small British investment firm called Eden Capital, the luxury-goods magnate Bernard Arnault and a number of Middle Eastern investors. Despite, or thanks to all the money turned out to be a management nightmare. «Ericsson was no good at systems integration. Hill and Knowlton did not know how to sell the story to the media. JP Morgan was not bringing in investors fast enough. The chief technology officer was not up to his job. Even Patrik Hedelin, a fellow founder, was too much of an individual to be a good chief financial officer,» a Swedish report states.[[Incompetence backed by less expert investors, 4 December, 2001. Reviewer: A reader from Stockholm, Sweden (found on the site). Malmsten: «By the first afternoon when the first statistics came in, we knew the figure of a million some people had talked about was a complete fantasy.» The boo dream imploded, only six months after its launch. After having burned $130 million folded less then a month after the NASDAQ crash in April 2000.
Retrospectively, Ernst Malmsten is ready to admit that the core of the problem at was speed, the belief that Rome could build in a day. «Instead of focusing single-mindedly on just getting the website up and running, I had tried to implement an immensely complex and ambitious vision in its entirety. Our online magazine, the rollout of overseas offices, and the development of new product lines to sell on our site-these were all things that could have waited until the site was in operation. But I had wanted to build utopia instantly. It had taken eleven Apollo missions to land on the moon; I had wanted to do it all in one.»[[Ernst Malmsten, together with Erik Portanger and Charles Drazin, Boo Hoo, a dotcom story from concept to catastrophe, London: Random House, 2001, p. 233. Who taught them all these New Economy truisms both Kuo and Malmsten & Co. fail to mention. George Gilder, Kevin Kelly or Tom Peters do not show up in all chronicles. As in a psychedelic rush the dotcom actors got caught in events and moments later as easily dropped in the garbage bin of history, left behind with nothing but question marks. Ernst Malmsten: «In my head I see images of all boo’s employees, who worked day and night with such enthusiasm; and the investors who were so confident of our future that they had put $130 million into the company. Two years’ work, five overseas offices, 350 staff. All these people trusted me and now I have failed. What have I done? How could things have gone so wrong?»[[Malmsten, p. 4.
As the leadership gurus had told them to do so, Ernst and Kajsa wasted a lot of time and resources creating a brand for their not yet existing business. The company image got turned into a Gesamtkunstwerk. The founders showed total devotion. «We determined that every aspect of our business, from the look of our website to the design of our business cards, should send a clear message who we were and what we stood for.»[[Malmsten, p. 106. The launch of the (empty) boo brand throughout 1999, fuelled by press releases, demo designs and parties, created the risk of media over-exposure, with the web portal itself nowhere near finished. On the technology front, Ericsson, responsible for the e-commerce platform, turned out to do a lousy job. «The breaking point had come when its 30-page feasibility study landed on my desk,» Malmsten explains. «The first thing that struck me how flimsy it seemed. Then I got the bill. At $500.000, it was roughly five times more than I’d expected. As we had been having conservable doubts about working with Ericsson, I saw no reason why I should accept it.» This left Boo without a master plan, thereby creating a delay of many months. «There was one thing guaranteed to bring us back down to earth again. Technology. As we began to pull together the different parts of the platform, more and more bugs seemed to pop up. So many in fact that no one had any clear notion when the launch date would actually be.» Still, «technology felt more like a pip in the tooth than something we really had to worry about. It barely dented that summer’s mood of bullish self-confidence.»[[Malmsten, p. 215/216.
In early August 1999, weeks before launching the site Malmsten discovers that pretty much nothing works. «Systems architecture, the user interface, product data, the application development process-there were problems in pretty much all these areas. Our overall project management was a disaster too. We were now working with eighteen different technology companies who were scattered around the world. What they needed was a central architect.»[[Malmsten, p. 231. Boo didn’t have any version control. A central system of management should have been in place to track versions the changes and to create a central code base.
For both boo and Value America it is significant that there was no executive technologist on board in an early stage of the venture. The lesson Malmsten learned from all these disasters is a surprising one. Instead of scaling down at a crucial moment, thereby giving technology more time to develop and give technologists a greater say in the overall project planning, Malmsten retrospectively suggests outsourcing. «We should never have tried to manage the development of the technology platform ourselves.» However, in e-commerce there were-and still are-no out-of-the-box solutions. Unknown to the imperfect nature of technology the dotcom founders showing off a regressive understanding of the Internet. Instead of entering deeper into the complexities and the ever-changing standards, technology is being instrumentalized as a tool, which is supposed to do the job as advertised in the media.
Both Kuo and Malmsten surprisingly admit they hadn’t used Internet before they got involved in their dotcom venture and do not even particularly like the medium. The «Internet entrepreneur» Malmsten confesses he doesn’t particularly like computers and hadn’t used the Internet before September 1996. In both stories technology is portrayed as an ‘obstacle,’ not the core and pride of the business. Kuo and Malmsten have visibly been irritated about the imperfect nature of technology. This may be understandable if expressed by suburban mums and dads, not from executive level management of major Internet startups. The Internet in the late nineties was anything but perfect, especially in cases where a complex variety of operating systems, networks, databases and applications had to talk to each other. The passion amongst dotcom management to fiddle around completely lacked. There was simply no time for bugs in their now-or-never time schedules. The 25/8 work ethics must not have added much.
The fact that these ueberyuppies were utterly unaware of the non-functionality of new technologies illustrates the mere guest appearance role of the dotcom workforce in the larger Internet saga. David Kuo was a political adviser and CIA operative. Boo founders Ernst Malmsten and Kajsa Leander ran literature events and a publishing house. Lawyers, former humanities and arts students and corporate employees went back to their previous professions, disappointed about the millions they failed to make. The dotcom class of 99 did not have the marketing expertise to lift their dreams beyond the level of good ideas, nor had the technological experience to understand the very real limitations of the web. Blinded by financial deals their religious optimism forced them to believe that technology and markets did not have to be developed and therefor their company could become mega successful instantaneously. There was no time scheduled for mistakes. Didn’t the Darwinist doctrine taught that those who hesitate would be slaughtered?
« suffered from delays, technical hitches and a website that made broadband access a prerequisite for purchasing sneakers.» ( investors may have been lured, not to say fooled, with luring offline demo design. The mass of home computers of the potential boo customers on their slow 28-56K dialup connections were unable to access the high bandwidth 3D images of the retail products on sale. Malmsten doesn’t touch this problematic aspect of the boo concept. Possible customers lacking bandwidth did not cross his mind. Like so many dotgone leaders, Malmsten presumed the latest technologies to be flawless and omnipresent. The future had already arrived. The six months that was online were too short to touch bandwidth and usability issues. None of the investors pushed for a low bandwidth version of the website. They had all blindly bought themselves into glamorous beta versions-until reality kicked in. Boo’s scheduled IPO got postponed. Investors produced a list of demands. A signed supplier agreement had to be secured with either Nike or Adidas; there had to be clear evidence pf further revenue momentum, etc. Staff had to be cut by half. The first department to be closed was boo’s ‘lifestyle’ web magazine Boom. It had been Kajsa Leander’s brainchild. «The notion that art and commerce could be mutually supporting-that we could be mutually supporting-that we could create a loyal customer base through a magazine that had its own independent validity-appealed enormously to her.»[[Malmsten, p. 322. But in the end it had failed to work out, as with most online magazines, run by a staff of editors, designers and programmers and a pool of freelance writers, who all needed to be paid, and little or no revenues. In April/May 2000 there had been a sudden mood swing in the press. felt victimized. Investor confindence dropped below zero and on May 18, 2000 became one of Europe’s first dotcoms to close its doors. «In the space of one day our glorious schemes for expansion had vanished in a puff of smoke.» In a matter of weeks followed the downfall pattern, as described by Kuo: «Company after company followed the same death script: ‘restructurings’ that would help ‘focus on profitability’ led to explorations of ‘strategic alternatives,’ which let to ‘further layoffs’ and finally to bankruptcy.»[[Kuo, p. 311.
The dotcom generation is an example of the dominant credit paradigm. Borrow first, let others pay back later. This dotcom pattern is already visible in earlier practices of the founders. Their earlier publishing house, LeanderMalmsten survived on «delaying what payments we could,» leaving their printers with unpaid bills. Their next project, a Swedish Amazon clone,, which sold books online, didn’t even have to make decent revenues. The venture was immediately sold to old economy retail giant who then had to figure out a business plan. The Value America story is even weirder in this respect. It is only towards the end of his engagement that David Kuo discovers the true magnitude of a huge bankruptcy scandal Value America Craig Winn founder had caused earlier. Despite Winn’s bad reputation amongst some Wall Street analysts, he was still able to borrow US $ 200 million, until creditors-again-pulled the plug.
The Future Just Happened is Michael Lewis’ next publication after his model hype story on Jim Clark and the Netscape IPO, The New New Thing. Lewis wisely keeps his mouth about the whereabouts of his New Thing heroes and the tragic marginalization of the web browser company Netscape. For Lewis Dotcommania is not anymore a process, shaped by technologists but a scheme, ran by financial professionals. In an opportunistic manner Lewis states: «In pursuit of banking fees the idea that there was such a thing as the truth had been lost.» The active role that his own, immensely popular dotcom book might have played in talking up stocks remains undisguised. Instead, Lewis sets out to map the social impacts of the Internet. He convinced the BBC to make a television series. For this occasion Lewis develops a wildly uncritical crackpot sociology. Well-known usages of the Net are suddenly sold an «invisible revolution.» In order not to have to talk about the flaws of dotcom business models, the Microsoft monopoly, the corporate and state crackdown on privacy and other urgent issues, the «amateur social theorist» Michael Lewis discovers a new set of pioneers not corrupted by Wall St. money and corporate greed. Unwilling to study the social consequences of the Internet Lewis starts to popularize his thesis of the «Internet consequences of society.»
Like many of his contemporaries Lewis notices that «capitalism encourage even more rapid change» without mentioning which changes are meant. Change for the sake of change, no matter in what direction? Technology seems to have no agenda. It only got heroes who are driving a wild and unspecified process. «The only thing capitalism cannot survive is stability. Stability-true stability-is an absence of progress, and a dearth of new wealth.» Lewis equals change to economic growth. Instead of looking into marketing techniques, the production of new consumer groups and the role of early adopters, Lewis reverses the process. He mistakenly presumes that the first users of technology are actually driving the process. Sadly enough for the early adaptors, this is not the case. If any identifiable agency is driving technology it would arguably be the military, followed by university research centers, in conjunction with big corporations and an occasional start-up.
In The Future Just Happened Lewis’ heroes are not dotcom CEOs but ordinary people, in particular adolescents. Finland is used here an example. The Fins were successful «because they were especially good at guessing what others would want from their mobile phone and then follows the corporate rhetoric of Nokia who presumably spent a lot of time studying children. However, the assumption made here is a wrong one. Finnish schoolboys did not invent instant messaging. What they did was using existing features in a perhaps unexpected way. Interesting detail is that SMS is a relative low-tech feature. The Nokia anthropologists then picked up on this informal mobile phone use in their marketing strategy.[[The complex dynamics between marketers and the cool, young rebels is well documented in the PBS television production The Merchants of Cool. The script of this insightful documentary can be downloaded under . In short, the Finnish youth neither invented nor further developed the SMS standard. It found new social uses, in a close feedback with the corporate (research) sector. The loops between marketers and the ‘cool’ rebels are stunningly subtle and banal at the same time. Such dynamics are perhaps too complex for Lewis. He sets out to portray them, celebrating them, as he had done before with Netscape/Healtheon entrepreneur Jim Clark.
The Future Just Happened tells the story of the fifteen-year-old Jonathan Lebed, «the first child to manipulate the stock market.» In September 2000 the U.S. Securities and Exchange Commission (SEC) settled its case of stock market fraud against this computer wiz kid who had used the Internet to promote stocks from his bedroom in Cedar Grove, New Jersey. «Armed only with accounts at AOL and E-trade, the kid had bought stock, then, using «multiple factious names,» posted hundreds of messages on Yahoo Finance message boards recommending that stock to others.» Lebed agreed to hand over his gains of $285.000. Lewis’ inability to frame events becomes clear here. He bluntly fails to mention that the young day trader heroes only a few months after the Lebed case lots billions and billions of dollars. This obvious fact, known to Lewis, doesn’t fit in his success story about the «democratization of capital.» Instead, the impression of the reader has to be: cleaver kids can make a lot of money on the Net and the establishment doesn’t let them. How unfair.
Lewis’ attack on the established Wall St. experts may seem sympathetic but it’s a safe form of rebellion, backed by long-term developments within the financial system itself. First the trading floors of the global stock markets had been wired, and then the trading moved to trading offices, no longer located in Lower Manhattan. It was only going to be a matter of time until Wall St. would no longer be a physical center but a hub of computer network, located somewhere, preferably not anymore in Manhattan (specially after 911). Day trading is part of this overall process, but certainly doesn’t drive it, its numbers are way too small compared to the vast sums institutional financers are moving around. The professionals are based in New Jersey offices, Atlanta, Tokyo, anywhere. They operate from behind their walled communities in the suburbs, equipped with laptops, broadband, PDAs and cell phones, in case they are on the road.
Within this process, which had started in the mid eighties Lewis rightly classifies the SEC as a conservative force. «Right from the start the SEC had helped to reinforce the sense that ‘high finance’ was not something for ordinary people. It was conducted by elites.» Hobby day traders such as Lebed weren’t going to change that fundamental fact. Over the past decades the rich had become richer and the middle class had become under an increased pressure in terms of the level of lifestyle it could no longer maintain. The New Economy did not turned out to be the big leveler as it once promised. At best, it convinced a whole generation that life was a gamble. Not a sustainable, balanced business plan but the right lottery number was the ticket to prosperity. Dumb luck.[[A response to one of my «from the dotcom observatory» nettime posting could illustrate the gambling attitude: «It was pure dumb luck if a startup was successful or not. Many of the netscapers went to other startups because they thought, “Hey, we have the magic touch” (as everyone else thought as well… hiring magic lucky charms was very popular then) but nearly all of them failed. Most frequently massive misuse of money and no customers caused this (We have to hire 100 people in the next two months!…the ramp-up lie), but it is also being in the right time, right place, with the right connections. Dumb luck. Most people think it was their talents. Because the alternative is horrifyingly unfair. The ones who don’t think it was their talent that made them successful, who made lots of money, have huge issues about deserving the money they made–I know one person who felt so guilty that he *gave* 2 million dollars to the girl he was dating….and she immediately broke up with him, of course. This is not to say that having a group of smart people in your startup wasn’t important–it was, but I can count hundreds of startups that were just “smart” experienced people that failed just the same.» (Anya Sophe Behn, re: nettime, From the Dotcom Observatory, December 26, 2001)
Lewis argues it unfair to punish a kid for pushing shares by confiscating his profits. That may be so. Regulation works to protect those in power. Lewis’ sense of injustice expresses itself in the following oppositions: young versus old, mass versus elite, outsiders versus insiders.
Because reason tells us so, the Internet will prevail over the «old rules» and will eventually claim victory. Basta. This old school historical determinism seems to be attractive. The stubborn naivety of the statement overwhelms me each time I read it. In order to support the cause of the Internet a deeper understanding of the current power structures is inevitable. Reason will not triumph, nor will the newbies, no matter how genius. The ideal Internet world is friction free, without setbacks or responses of the establishment. For instance, Michael Lewis features the Gnutella, peer-to-peer software, launched in March 2000 by the twenty-year-old AOL employee Justin Frankel. The Gnutella case is a real challenge for the capitalist Lewis’ belief system. He interprets the post-Napster free exchange movement in an interesting way. It is the post-1989 ‘capitalism without alternatives’, which ‘allows’ peer-to-peer networks to experiment. «Now that the system is no longer opposed (by communism, GL) it could afford to take risks. Actually these risks were no luxury. Just as people needed other people to tell them who they were, ideas needed other ideas to tell them what they meant.» Read: corporate technology is need of its own internal antagonists such as Linux, Gnutella and PGP. All the virus does is test the system. «That’s perhaps one reason that people so explicitly hostile to capitalism were given a longer leash than usual: they posed no fundamental risk.» Herbert Marcuse couldn’t have expressed it better. In Lewis’ one-way street model the rebel has no option but to integrate. Duped by a fatal cocktail of historical necessity and greedy human nature, the Internet rebel will ultimately change sides. Sooner or later «some big company swoops in and buys them, or they give birth to the big company themselves. Inside every alienated hacker there is a tycoon struggling to get out. It’s not the system he hates. His gripe is with the price the system initially offers him to collaborate.»[[Michael Lewis, The Future Just Happened, London: Hodder & Stoughton, 2001, p. 124. Hear deep throat of the capitalist doctrine talking here, speaking on behalf of the ‘speechless’ hackers.
In order to explain real struggles between inside and outside, Lewis has to make the good-evil distinction. Capitalism from before the Fall of Man is pure and good in its very nature and cares for the Internet. However, it is the lawyers, CEOs and financiers who are the evil elements. They are imperfect, greedy human beings trying to frustrate «change» as practiced by the youngsters. Lewis does not ask himself the obvious question why the Internet has not been able to disassociate itself from the dotcoms.
A pure and innocent capitalism, without evil monopolistic corporations, ruled by the Market, is an old idea that can be traced back to Adam Smith. Lewis then sets out to reinterpret ‘socialist’ intentions of youngsters as «rebel ideas of outsiders» whose only wish, and legitimate right it is, to become incorporated. Here Lewis really shows his cynical nature, overruling legitimate concerns of hackers for his own conservative political agenda. Lewis advises not to take notice of anti-capitalist sentiments. «Socialistic impulses will always linger in the air, because they grow directly out of the human experience of capitalism,» Lewis reassures us. However, «the market had found a way not only to permit the people who are most threatening to it their rebellious notions but to capitalize on them.» Daniel, a fourteen-year-old English Gnutella developer «didn’t see things this way, of course. He was still in the larval state of outsider rebellion.»
In reference to the debate sparked by SUN’s senior technologist Bill Joy on the ethical borders of the technological knowledge,[[Bill Joy, Wired, April 2000. Lewis states that such questioning is dangerous because could stop «change». In his purist techno-libertarian worldview progress is a blind process without direction or values, which cannot and should not be given a direction. What remains is friction between the generations. Lewis calls for the Old to make way for the New. «The middle-aged technologist knows that somewhere out there some kid in his (!) bedroom is dreaming up something that will make him obsolete. And when the dream comes true he’ll be dead wood. One of those people who need to be told to get out of the way. Part of the process.» But power doesn’t exactly follow the logic of knowledge production (as Lewis describes it). Those in power, worldwide, are predominantly male name of «change». Giving up power is not «part of the process.» It is a violent and in their fifties, sixties or even older. These aged elites are in no danger to be overruled because the young ones lack basic understanding how power operates. It’s pathetic to suggest the elderly will voluntarily make way for the next generations in the disruptive affair, often caused by (cultural) revolutions, (civil) wars and recessions.
«By the end of his series of meetingswith horribly focused children, there is a whiff in Lewis’s proseofreal,old-fashionednostalgia- nostalgia for the past, when kids were just kids, and authors could more easily get a handle on the changing world around them.» Steve Poole writes in his Lewis review for The Guardian (July 21,2001). Lewis is not ready for the looming conflicts over intellectual property rights, censorship and ownership over the means of distribution, which may or may not happen. The option of an enemy from outside of the technological realm all together doesn’t cross his mind. The apriori here is one of technocratic hegemony, determining all other aspects of life. This is perhaps the most outdated idea, that technologists are the only ones who think about the future. If we follow the argument of the democratization of knowledge, everyone will shape technology, in one way or another. This makes the premise of Lewis’ book, young hackers shaping history, abundant.
The last dotcom testimony analyzed here has got firm roots in cultural IT-research. Utopian Entrepreneur is a maxi-essay by Brenda Laurel, author of Computer as Theatre and female computer games pioneer. The booklet is an honest and accessible account of what went wrong with her Purple Moon startup, a website and CD-ROM games company targeted at teenage girls.[[ Sadly enough Laurel’s economic analysis does not cut very deep. After having gone through the collapse of computer (games) company Atari, the prestigious Silicon Valley Interval research lab and most recently Purple Moon one gets the sense that Brenda Laurel, and with many similar good hearted «cultural workers», Laurel is again gearing up for the next round of faulty business. Nervous how-to PowerPointism prevails over firm analysis. As long as there is the promise of politically correct («humanist») popular computer culture is there, anything seems allowed.
Brenda Laurel is an expert in human computer interface design, usability and the gender of computer games. She is a great advocate of research. ‘The Utopian Researcher’ could perhaps have been a better, more precise title. Laurel has some pretty insightful things to say about the decline of corporate IT research. The speed religion, pushed by venture capitalists and IPO-obsessed CEOs, has all but destroyed long-term fundamental research. «Market research, as it is usually practiced, is problematic for a couple of reasons. Asking people to choose their favorites amongst all the things that already exist doesn’t necessarily support innovation; it maps the territory but may not help you plot a new trajectory.» Laurel’s method, like many of her usability colleagues, is to sit down and talk to people, «learning about people with your eyes and mind and heart wide open. Such research does not necessarily require massive resources but it does require a good deal of work and a concerted effort to keep one’s assumptions in check.»
Laurel declares herself as a «cultural worker», a designer and new media producer, experienced to communicate to large and diverse audiences. However, this does not make her necessarily a utopian entrepreneur. She only hints at her disgust for the investors who pulled the plug so soon. She hides her anger at those who willingly destroyed her promising venture. It has to be said here that Purple Moon’s business model predated the dotcom schemes. Revenues mainly came from CD-ROM sales. Despite solid figures, high click rates and a large online community of hundred thousands, investors pulled the plug.
The problem of Utopian Entrepreneur is Laurel’s ambivalent attitude towards the dominant business culture. Laurel, and with her countless others, keeps on running into very real borders of real existing capitalism. The difficulty to develop a (self) critical analysis is becoming apparent throughout the «cultural» arm of the new media industry. The moral references to America as a culture obsessed with making more money and spend are not very useful («In today’s business climate, the story is not about producing value but about producing money.») The question the booklet therefor is posing is in what language, from a cultural perspective, economics could be described.
Utopian Entrepreneur describes the chauvinist of ‘new economy’ gurus-and then abruptly stops. Sadly, the economic knowledge Laurel calls for is not practiced in her own writing. Moralism can’t cut that entire deep. One of the fundamental problems could be Brenda Laurel’s equation of critical analysis with «negativism». Her passion to do «positive work» backfires on the poor level of analysis in which is not possible to investigate deeper power structures behind the ever crashing companies Laurel is involved in. Theory can be a passionate conceptual toolkit and is not necessarily ‘friendly fire’. Criticism, in my view, is the highest form of culture, not ‘collateral damage.’ Organized optimism, so wide spread in the New Age-dominated business and technology circles, effective blocked thinking. Critique is not a poison but a vital tool for change. Knowledge, which doesn’t stop questioning, is sharpening ones ability to look through the pep talk press release phrases, so dominant in the IT-industry.
The danger is that the outcome of a critical investigation of the Purple Moon-case as a boom and bust scheme might be ‘negative’ (not so much for Laurel but in particular for investors she now protects). In such instance it might not be enough to say that people should learn from their mistakes. Without a critical analysis they may as run into the same troubles next time. It is out of the fear for her own ‘negativism’ that Laurel’s account has to remain cautious. Her ‘positive’ armor blocks rather then frees up.
Laurel’s style suffers from the curious fear to be criticized by radicals, thereby creating an unnecessary form of defensive writing. Brenda Laurel writes: «A utopian entrepreneur will likely encounter unexpected criticism-even denunciations-from those whom she might have assumed to be on her side.» What Laurel can’t distinguish here is tough assessment from insiders’ perspective and positive public relations blurb talk. How do coolness and usability relate? Purple Moon was tremendously successful amongst young girls-and got killed for no reason. Contrary to the Darwinist dotcom philosophy I think such ‘failures’ should not happen again. There should be other, less volatile business models which are more hype-resistant, providing projects such as Purple Moon with enough resources to grow in its own pace. There is no reason to comply with unreasonable expectations and buy into speculative and unsustainable ‘speed economics’.
Brenda Laurel is on a mission to change the nature of the computer games industry, away from its exclusive focus on the shoot-‘m-up male adolescent market. She outs herself as a Barbie hater and her aim is to get rid of the «great machine of consumerism.» Although Brenda Laurel sums up all the problematic aspects of short-term profit driven technology research, she does not propose alternative forms of research, collaboration and ownership out of a fear to «activate the immune system.» Her fear to be excluded from the higher ranks of the virtual class is a real one, not to be easily dismissed. Laurel carefully avoids mentioning dotcom business gurus such as George Gilder, bionomics types and others, which Europeans, for better or worse, labeled as the ‘Californian ideology.’ The pillars of the techno-libertarian business agenda do not seem to have existed. Laurel may never have been a true believer, but she remains silent about the once so dominant techno-libertarian agenda, as did Kuo and Malmsten.
Compared to other dotcom crash titles, Laurel remains a secretive one. In Dot.Bomb David Kuo is remarkably honest about his own excitement-and blindness-for the roller coaster ride of America’s once most promising e-commerce portal. Laurel’s report remains distanced, general and, at times, moralistic («live healthy, work healthy»). It is as if the reader is only allowed to get a glimpse inside. Laurel is on the defensive, reluctant to name her protagonists. Unlike Kuo, who keeps on rapping about all the ups and downs inside Value America, we never quite understand Laurel’s underlying business strategies. Her motivations are crystal clear. Her implicit approach towards the powerful (male) IT moguls and VC Uebermenschen has to be read like a Soviet novel. There is no reason to describe those who destroyed a corporation as (anonymous) «aliens» (as Laurel does). The ‘suits’ have name cards and bring with them a particular business culture.
Utopian Entrepreneur brings into debate definitions of ‘inside’ and ‘outside’. Laurel is desperate to position herself as an insider. «It took me many years to discover that I couldn’t effectively influence the construction of pop culture until I stopped describing myself as a. an artist, and b. a political activist. Both of these self-definitions resulted in what I now see as my own self-marginalization. I couldn’t label myself as a subversive or a member of the elite. I had to mentally place my values and myself at the center, not at the margin. I had to understand that what I was about was not critiquing but manifesting.»
Laurel is afraid of theory, which she associates with academism, cultural studies, art and activism, thereby replicating the high-low divide. For Laurel theory is elitist while out of touch with the reality of the every life of ordinary people. That might be the case. But what can be done to end the isolationist campus-ghetto life of theory? Instead of calling for massive education programs (in line with her humanist enlightenment approach) to lift the general participation in contemporary critical discourse Laurel blames the theorists. This attitude, widespread inside the IT-industry, puts those with a background in the humanities in a difficult, defensive position. It also put a critical analysis of the dotcom chapter of the Internet history in an ‘outsiders’ position. As soon as you start to reflect on the inner dynamics of the Silicon Valley, you seem to be out. Instead of calling for the development of a rich set of conceptual tools for those working ‘inside’ Laurel reproduces the classic dichotomy: either you’re in (and play the capitalist game), or you’re out (become an academic/artist/activist, complain and criticize as much as you can). The mutual resentment between those involved in technology and business and the ivory tower humanities on the other hand seems higher then ever.
On the other hand, postmodern theory and cultural criticism haven’t been very helpful either for Laurel, Castells and the study of the Internet in general. Doesn’t matter if you take Jameson, Zizek, Butler, Habermas, they all lack basic economic and technological knowledge. As long as such ‘celebrity’ thinkers continue to confuse Internet with some offline cybersex art installation there is not much reason to consult these thinkers. The same can be said of Michael Hardt and Toni Negri’s Empire, the presumed bible of the ‘anti globalization’ movement. Despite the worthy category of ‘immaterial labor’ critical knowledge of both the Internet and the New Economy is virtually absent in this fashionable millennial work. The dotcom saga has virtually no connections to the identity politics and body representations, two favorite research angles with the humanities with links to virtual reality. Today’s leading theorists add little to Laurel’s conceptual challenges in the field of user interface design or the criticism of the male adolescent geek culture. Cultural studies armies will occupy the new media field only if the IT-products have become part of what traditional broadcasting media define as mass culture. This means a ‘delay’ of at least another five to ten years. In the meanwhile there is hardly any critical theory, equipped to intervene, in real life, in the debates over the architecture of the Network Society and its economic foundations (of which the dotcom bubble was a brief chapter).
The fact is, theory is running well behind the facts and has great difficulty to adapt to the real-time media events and the networked condition of today’s discourses. The Gutenbergsche baby boom generation, now in charge of publishing houses, mainstream media, in leading university positions, share a secret dream that all these new media may disappear in the same pace as they arrived. Lacking substance, neither real nor a commodity, new media failed to produce their own Rembrandts, Shakespeares and Hitchcocks. The economic recession which followed the NASDAQ tech wreck only further deepened the gap between the forced ‘freshness’ of the techno pop workers and the dark skepticism of the high art establishment.
Dotcommania is likely to become a forgotten chapter, not just by the punters and baby suits, but also by new media theorists, Internet artists and community activists. Both young geeks and senior technologists have already started to denial their involvement in dotcom startups, hiding behind their ‘neutral’ role as technicians («Don’t shoot me, I am only the programmer.»), forgetting their libertarian passions of days gone by. What remains is the still open question of sustainable models for the Internet economy.