Expertease I: .com crumble

One of the things that used to piss me off about the internet industry is the way businessmen would hire experts and then ignore them. This was true in every company I worked for. Another thing which was true is that the powers in the company, MD, CEO, whatever, were always salespeople. Always. No exceptions. Every one of the top management people I worked for had come up through the sales force, and this influenced the way they thought.

Now, I’ve worked with sales people who thought that the way business worked was like this:

1. Ask the people who do real work “Can the company deliver $product”.

If answer is “yes”, sell $other_product which looks and sounds similar.

If answer is “no”, sell the thing anyway and then present to the board a fait accompli.

2. ???

A.k.a. “We’ve sold it, now those lazy geeks have to build it or the company loses face and reliablity.”

3. Profit!

Seriously. I had to stop a guy selling a nation-wide contract to provide internet bandwidth to 75 office-hotel sites across Britain, when the company he worked for had a backbone of 155Mb that only went as far north as Leeds at that time. “Well, this is how I was taught to design solutions for NTL, they could have delivered it”, says he. “Yes, but you work for us, now, and we have 45 employees vs. NTLs tens of thousands, and when you asked me if we could, I told you no.”, says I. “Yeah, but I assumed you were lying…”

Direct quote. I eventually stormed into the meeting he was having with the CTO (my boss), the MD and the Money. I laid out the story and swore at them. The Money asked my boss “Can we fire him?” and my boss said “No”. Though they didn’t fire the salesman either. This is a mentality I’ve never understood, and still can’t. If you hire an expert, you should listen to them, or what are they there for?

So, in 1997, you’re a man [1] who has the contacts which can get him some venture capital. That means you’re a salesman/marketing exec, because they’re the only people who go to the kind of parties venture capitalists go to. You’re bright enough to know that this internet thingy is proving popular. There’s going to be money to be made there, and you’ve read enough enthusiastic press that you know VC companies like 3i are handing out millions on any business with an internet flavour. So, since you don’t get the ‘net and never will, you hire a team of awful, uncultured oiks to do the work (ie. the technical department) and then get on with siphoning money out of the company in various ways. It doesn’t really matter, after all, whether the company ever has a product or ever meets its technical expectations. You don’t even need the company to survive beyond the medium term. All you need is for it to look good, for just long enough that you can move some money from VCs to your own bank-account via the business. Then, when the crash comes, you roll it up, everyone you employ is suddenly out of work and you’re walking away with $35million.

That, ladies and gentlemen, is how the .com bust worked. Companies were taking millions from VCs and customers, which never had a product and were never going to. The people working trying to build the product were over-ruled when they said “It just doesn’t work that way”. We got sickening speeches about how technical operatives don’t understand business vision, how no-one ever got anywhere by just doing what already works, how creativity must be driven by commercial needs. Right up to the point that you ask for the budget to actually implement the 5 9’s reliablity your salesmen have sold, then get told ‘Oh hell no, we can’t spend that much on the actual product, we need that money for the marketing drive’. Again, a direct quote.

The .com boom happened because some geeks around the world figured out some new technological stuff, and some of it was really cool. The .com bust happened because a lot of very, very cynical people realised that for the first time since 1929 you could make millions without ever having to deliver a working product (look at Microsoft! these men would say, their products have never worked properly, and yet they make billions…) They realised that you could make your personal pile on pure chutzpah and by never slowing down enough for anyone to catch you, and that you’d have a ready-made scapegoat in the server room. The company failed because the tech staff weren’t good enough. Or because they mis-represented the capacities of the technology. Or whatever other excuse was being trumpeted across /. this week.

The .com crash happened because people didn’t listen to their experts.

To the man on the censored omnibus, this seems insane. The point of experts is that they know their field intimately and that therefore what they tell you will be the best advice available at the present time. With the exception of economics, of course, because the system is just too complex for anyone to be right. Ever. Rather like the weather, really. Only we’re better at predicting that. Anyway, the point of experts is that they know their stuff, surely? That’s why you have them. So in what world does it make sense not to listen to them?

The effect on the experts themselves is even worse. Scott Adams has been making this point for years. It feels a lot like being a stripper. You work your ass off learning to perform unbelievably complicated, challenging and physically demanding feats (seriously; you try fixing routers for 32 hours straight and tell me it’s not physically demanding). You do this because you are talented, young enough to want the money and sharp enough to see opportunities at the end of the tunnel. Then you realise that the light is an on-coming train and your boss is driving it: that the system is designed to ignore you when you’re right and blame you afterwards, and that you have no voice, no power, no representation but all the expectations in the world. Things you care about (for the stripper, their body; for the geek, their mind) are exposed to commentary and criticism by people who don’t understand and could never perform your work, but who are still able to fuck you up with a word. In what world does this make sense?

The capitalist world. In this world, it doesn’t matter whether anyone gets what they pay for, as long as the capitalist gets paid.

This little historical excursion is partly here to make some points that have needed making about the .com crash, but it’s also here as a pre-amble. Disturbingly, it’s not just the business world who are displaying the tendency I analyse here. Governments are starting to do it as well, and that is considerably scarier. Coming soon, Expertease II: governing principles.

[1] Well, you’re probably a man. The number of women who had managed to break enough glass ceilings that they could muster significant venture capital by 1996 was quite small. By five years later, of course, there was lots and lots more of them [2], which is one of the good things which came out of that particular mini-cycle.
[2] The lady who co-founded lastminute.com to name but one. My team of highly-trained Research Otters tell me that there will be more female millionaires in Britain than there are male by 2020. This is apparently due to, among other things, the internet and the buy-to-let boom.

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