Net CEOs: 'Shallow and Greedy' : LUSENET : TB2K spinoff uncensored : One Thread

Net CEOs: 'Shallow and Greedy'

by Joanna Glasner

12:15 p.m. Apr. 18, 2000 PDT

The head of a major Internet consulting firm predicts that many dot-com companies will soon be exposed for what they really are: hollow, half-baked schemes without much hope for long-term success.

George Colony, CEO of Forrester Research, recently concluded a lengthy series of interviews with executives about how they expect the Internet to change their businesses over the next 10 years. About a fifth of the CEO's hailed from Internet companies, and Colony based his conclusions largely on interviews with them.

His findings were not pretty.

"Many of the dot-com CEOs lacked depth, experience, and common business sense," he wrote in a letter on Forrester's discussion site. "There was a fanatical focus on valuation -- getting public and liquid -- while value -- what the customer eventually gets -- was a back-seat discussion."

Colony drew a sharp distinction between CEOs of Net startups and leaders of more established companies. Most Net executives, he said, seemed committed only for the short-term, unfazed by their highly fluid work force, and fixated on cliched and simplistic business models.

He also wasn't too impressed by many of their businesses.

"These companies are not built to withstand competition, they're not built to deliver sustained value, and they're not built to last," he wrote, offering this year's Super Bowl as an example of the lack of foresight.

Internet companies spent record sums on 30-second spots that in most cases proved to be "a phenomenal waste of money."

Colony had kind words for a few high-profile dot com executives, like Priceline founder Jay Walker,'s Jeff Bezos, and eBay CEO Meg Whitman. Those few executives who possess a long-term vision and are willing to marshall the sales forces and put up the investments to back them will end up controlling most of the market. Weaker players, in the meantime, will be forced to drop out.

The future, Colony said, will be one with fewer IPOs, less advertising, massive consolidation, and more stable prices. In the meantime, many of those in-your-face upstarts will find themselves cowed into the shadow by those slow-moving, profitable "old economy" companies they once derided.

So where will all those 20-something Net millionaires end up? Colony issued the following prediction:

"The dot-com generation will get squeezed by more skilled baby-boom managers and aggressive Generation Y newcomers. Former dot-com managers will end up working for their elders and their juniors," he said.

-- Cherri (, July 08, 2000


Isn't this how capitalism works? On the one hand, we have the Ford's, etc., associated with a product that not only makes money for Ford but produces careers that will oftentimes be continued by successive generations. On the other hand, we have those who thought up [and marketed] hoola hoops, pet rocks, and my favorite: Chia Pets. I doubt the folks in the latter category thought their "products" had any socially redeeming value, nor that their "products" would provide them a continuous income.

It seems to me that the author here is imposing HER standards on folks who may simply have wanted to see if their idea could sell at all.

-- Anita (, July 08, 2000.


Gary Dahl, a California advertising man, was having drinks with his buddies one night in April 1975 when the conversation turned to pets. As a lark, Mr. Dahl informed his friends that he considered dogs, cats, birds, and fish all a pain in the neck. They made a mess; they misbehaved; they cost too much money. He, on the other hand, had a pet rock, and it was an ideal pet - easy and cheap, and it had a great personality. His buddies started to riff with the off-the-wall idea and pretty soon they were all tossing around the notion of a pet rock and all the things it was good for.

Dahl spent the next two weeks writing the Pet Rock Training Manual - a step-by-step guide to having a happy relationship with your geological pet, including instructions for how to make it roll over and play dead and how to house train it. "Place it on some old newspapers. The rock will never know what the paper is for and will require no further instruction.' To Accompany the book, Dahl decided to actually create a Pet Rock. He went to a builder's supply store in San Jose and found the most expensive rock in the place - a Rosarita Beach Stone, which was a uniform size, rounded gray pebble that sold for a penny. He packed the stone in excelsior in a gift box shaped like a pet carrying case, accompanied by the instruction book.

The Pet Rock was introduced at the August gift show in San Francisco (the gift market is much easier to break into than the cutthroat toy market), then in New York. Neiman-Marcus ordered five hundred. Gary Dahl sent out homemade news releases of himself accompanied by a picture that showed him surrounded by boxes of his Pet Rocks. Newsweek did a half-page story about the nutty notion, and by the end of October Gary Dahl was shipping ten thousand Pet Rocks every Day. He appeared on "The Tonight Show," twice. By Christmas when, two and a half tons of rocks had been sold, three-fourths of all the daily newspapers in America had run Pet Rock stories, often including Gary Dahl's tongue-in-cheek revelations about how each rock was individually tested for obedience at Rosarita Beach in Baja, Mexico, before being selected and boxed. A million rocks sold for $3.95 apiece in just a few months, and Gary Dahl - who decided from the beginning to make at least one dollar from every rock - had become an instant millionaire.

Copycat rocks flooded the market, including one cleverly marketed as "the Original Pet Rock," and dozens of quick-buck entrepreneurs joined the action selling such ancillary fun as Pet Rock Obedience Lessons and Pet Rock Burial-at-Sea Services. Immediately after Christmas 1975, Gary Dahl himself relabeled leftover Pet Rocks as Valentine's Day gifts for loved ones in need of a low-maintenance pet, but the Pet Rock quickly became last year's fad. Dahl quit his job in advertising and formed Rock Bottom Productions and two years later he was interviewed by Don Kracke, the inventor of Rickie Trickie Sticky bathroom appliques, for Mr. Kracke's book How to Turn You Idea Into a Million Dollars. Dahl confided to Kracke, "I've got four more ideas. Wait 'll you see'em!" We have been unable to determine if any of the four ideas have seen the light of day.

Whatever his fortunes after the Pet Rock, Gary Dahl has become one of the great motivational figures of recent times. To Don Kracke and to other inventors, like Ken Hakuta (author of How to Create Your Own Fad and Make a Million Dollars) and Robert L. Shook (author of "Why Didn't I Think of That!), the story of the Pet Rock is a never-ending source of inspiration to create new crazes that sweep the nation and make millions for the genius who thought of them. To most noninventive people who remember it, the Pet Rock, like Deely Bobber head antennae and the Hula Hoop has become one of the mind-boggling examples of inexplicable market-place mania.

But Ken Hakuta does have an explanation for the periodic success of what he calls "useless dumb jokes" like the Pet Rock: It gave people a few moments of absolutely meaningless pleasure in a troubled world - no small accomplishment. "If there were more fads," Hakuta observed, "there would probably be a lot fewer psychiatrists. ... Instead of paying $100-an-hour therapy sessions, you could just get yourself a couple of Wacky Wallwalkers (a rubber toy that sticks and wiggles on a wall, which earned Hakuta $20 million) and a Slinky and lock yourself up in a room for a couple of hours. When you came out, you'd be fine."

As a footnote to this story you should know that Mr. Dahl opened a trendy little bar in Los Gatos, California with his new found wealth. In or around 1978, on a beautiful sunny day, Gary wrapped his $130K Ferrari GTB around a concrete bridge support on Hwy 17. Neither Gary or the car survived. Just ask DJS.

-- Ra (tion@l.1), July 08, 2000.

It seems to me that the author here is imposing HER standards on folks who may simply have wanted to see if their idea could sell at all.

That's it?

I went to the web-site of the writer of the origional article and have been reading the discussion board.

It reads like the pet rock craze, or like the "riots in Seattle" during the WTO conference. Basically it appears that there is a lot of investing (gambling) on start-up .com's turning out to be instant sucesses like Amazon and E-Bay. Venture Capitalists are targetting companies which will go public in 18-24 months in the hopes that stocks prices will soar and they can grab a big profit and go on to another potential winner. Unfortunatly they are not looking for long term sustainable businesses and this has dried up funding for potential winners who can build a firm foundation and last with profit further in the future.

It just a case ofsomeonecoming up with an idea that sells and others jumping on the band wagon with copy-cat ideas that run the uniqueness of the origional consept into the ground to the point where even the origional looses out due to the public discust with the overindulgence. Like stupid sitcoms on TV. The first one or two are an interesting diversion, but overdosing on the flood of them causes an alergic reaction.

Normally what makes a "good thing" good like cheesecake is the fact that you get it in small quantities ocasionally. When you have it for breakfast, lunch and dinner every day for a week you end up hating it. A lot of the Dot.coms are saturating the market and forcing themselves down our throats to the point where we are starting to become nausiated with them.

Personally I remember 5 years ago when I saw some of the first adds for (at that time ) http:/ on television and was thrilled that the world was finaly catching up with technology. Now my attitude when I see, hear or smell a dotcom I turn droop any pretense of attention to them.

When a baby first learns to walk they get lots of praise and attention but we do not continue to heap it upon them for the next three years evry time they walk. They soon learn that it takes a newer and more difficult accomplishment to win our praise and attention. Thats part of growing up. Thats life, and like children, the dotcom's and every other new technology will learn from experience.

Information technology offers information, there is a lot more that the computing technology has to offer than information and that is the area where the craze will weed out those who have little or nothing to offer besides a ride on the current craze.

The stock market is reflecting the consumer bordom with the saturated market of bandwagon jumpers. The subject is involved and interesting, and if studied by taking into consideration all areas as opposed to smacking a generalization onto to it, one can venture an opinion of what will happen in the future of the industry and be ready for it.

-- Cherri (, July 08, 2000.

Okay, next time I will spellcheck before I post to catch where this sticky keyboard has unduely influenced the opinion that I cannot provide a coherent post.

-- Cherri (, July 08, 2000.

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