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dot.bomb: My Days and Nights at an Internet Goliath
By J. David Kuo

reviewed by David Brake

January 28, 2002 | If you've ever wondered what was going on in the heads of the people who started dotcoms that soared and tanked, or you just enjoy tales of bitter boardroom battling and corporate chaos, you will find this book a compelling read. It tells the tale of Value America (VA) - a $2.5bn company at its IPO which died less than two years later.

The author, J. David Kuo, was the company's director of corporate communications for nine of those months and is perhaps the best-placed person to produce this kind of book as he was close enough to get to know some of the key decision makers but he doesn't have to worry too much about defending his own record and, most importantly, he is an experienced writer.

He doesn't make an appearance in person until a quarter of the way through the book. The first seven chapters cover the creation of the company from the point of view of its charismatic founder, Craig Winn. It gives a brief history of Winn's life and explains with admirable clarity how the business was created and grew. Kuo does a very good job of reminding you how exciting the company's vision seemed to be in the late '90s (though he can't resist editorialising about investors in those early days needing "bowls under their chins to catch the drool").

To this point, the account of the rise of Winn and his company is fairly laudatory - unsurprisingly, perhaps, as Kuo seems to have depended heavily on Winn's own account of his rise.

Once the author enters the scene himself, when he joins the company, the portrait of VA darkens quickly. We learn that in 1999 despite VA's Internet stock valuation 70% of its sales were made over the telephone, that its front page took much longer than its competitors' to download, its customer service was terrible (average wait times on the phone were 45 minutes at one point) and that although the company was notionally "inventory-less" it was starting to develop serious amounts of un-accounted for inventory thanks to people returning products to them instead of to the manufacturer. Later on it emerged that a discount scheme gone awry that was giving many customers 50% off their purchases was actually a more cost-effective way of gaining customers than their advertising was.

Most alarming, we learn that behind the scenes the founder's behaviour could be dangerously erratic. Although Winn was not the CEO he couldn't resist micromanaging parts of the business and changing the direction of the company at whim (though it must be said that many Internet companies at the time zigzagged frequently in the frantic search for profitability). He wanted to run for president and while some dotcom billionaires collected yachts or sports cars he built up a large personal collection of tractors and other farm equipment.

When his sky-high predictions were challenged he could turn nasty - alienating important potential partners like Saks, Citibank and FedEx. He also had a penchant - not just embarrassing but downright illegal - for announcing deals before they were signed and exaggerating their scope and importance.

Inevitably as the venture capital funding and investor faith began to run out, Winn's eccentric behaviour sparked a boardroom battle. It is this battle rather than the collapse of the company itself which dominates the last 40 pages of the book. Kuo left Value America in February 2000 when the writing was on the wall but almost a year before its eventual death.

Unfortunately this ending highlights what seems to me one of the biggest weaknesses of the book - its focus on the high level corporate shenanigans and on Winn himself instead of the story from the grass roots. Hundreds of employees worked long hours, convinced that they would become millionaires, only to end up out of a job. He convinced his own wife to give up a good job at AOL and several of their friends to quit their jobs and move to join Value America but this is mentioned almost in passing.

Because of this boardroom-centric outlook, the story, which is a human tragedy as well as a dotcom drama, is not as affecting as it could be. Nonetheless it remains a fascinating memoir of the dotcom glory days.


David Brake is an Internet Consultant and Freelance Journalist and has been closer to this story than he would like.

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