Years later, America would host a similar tribe, venal, suspender-wearing men who came to be called Bond Daddies. Described by the era's journalists as boiler-room sharks, they hoodwinked retirees, municipalities, and federal regulators with fraudulent dealings that would come close to sundering the world financial system.
Later still, America would spawn an equally distasteful flock: open-collared Ponzi-schemers, venture capitalists who would convince millions of consumers to bet their savings on a harebrained Internet stock bubble. The resulting Web-trading frenzy would spawn an economic boil whose rupture threatened to cause a nationwide recession. Yet, distinct from previous such eras, neither journalists nor the public would invent a mocking moniker for this era's venal set. Instead, journalists, their readers, and, it seems, everyone else would continue to laud them, to treat them as moral heroes of a new economic and social age -- even as their failures were exposed by billions of dollars of dot-com collapses.
The view that this era's Titans of the Universe were of a uniquely godly sort was most forcefully conveyed in the book The New New Thing, in which author Michael Lewis suggested that Jim Clark, founder of Silicon Graphics, Netscape, WebMD, and a slew of lesser-known start-ups, suffers such discomfort with this world that he's driven to create new ones.
Each of those worlds has since imploded, of course. Silicon Graphics is worth a seventh of its value five years ago. Netscape was bought by America Online after it became clear Microsoft's browser was trouncing the Netscape browser, and Clark recently resigned as director of WebMD, a company whose most recent quarterly report shows nine-month net losses of $1.75 billion -- spelled with a "b." As the NASDAQ continues to plummet, the prophetic visions of Internet seers -- venture capitalists such as Tom Jermoluk, John Doerr, Jim Barksdale, et al. -- have been proven so much nonsense.
Yet there has been little journalistic or popular recrimination.
In fact, quite the opposite has happened. As George W. Bush assembles his shadow Cabinet, the Wall Street Journal is floating the names of Doerr, a partner at top venture capital firm Kleiner Perkins Caufield & Byers who is considered the godfather of Silicon Valley money men, and Netscape co-founder Barksdale as possibilities for secretary of commerce or the proposed new post of "high tech czar."
Part of our continued reverence for our era's money men might be blamed on continued popular adherence to the official Silicon Valley business story, which holds that visionary companies have been caught up of late, unfairly, in unfortunate financial times. This version of reality has been successfully diffused through press releases, and repeated nearly unadulterated in the mainstream press.
Newsweek, for example, recently said in a story about the failed teen site Kibu.com, which closed in October, a month or so before completely burning through its multimillion-dollar venture capital investment, "It didn't technically fail: those high-profile investors concluded that the start-up wouldn't work in the post-Nasdaq-crash environment."
"If a venture isn't going to work, it's better to stop it soon rather than later," Newsweek quoted Doerr saying, as if he were speaking wisely.
In grammar school, teachers seeking to instruct children on the workings of molecules and atoms often show a film that begins with a camera zooming in from outer space, and then zeroing in on a piece of land, a piece of earth, and finally on the electro-microscopic details of the atom. It might be similarly useful to examine the minute inner workings of one of the enterprises launched by our Ponzi seers. An enterprise backed by the most godly of the Silicon Valley money men -- Doerr's venture capital firm Kleiner Perkins Caufield &: Byers, perchance; the New New genius James H. Clark, say; and, possibly, venture capital legend Excite@Home Chairman Tom Jermoluk. A company managed with such spectacularly poor judgment that it might invoke the sort of public backlash these false prophets of Ponzi deserve.
Our camera might zoom in on Kibu.com.
Every great vanishing act is outlived by one great artifact. The Aztecs erected Teotihuacan; the Druids (we recall from This Is Spinal Tap!) created Stonehenge. Our five-year venture capital orgy yielded www.kibupeople.com. Within its ruins, archeologists can find all the major archetypes of a failed society: spendthrift entrepreneurs, tech-girls and -boys, content mavens, ad-sales types, sundry support staff. But if Kibu resembled hundreds of other flights of dot-com vanity, it was special, too. Its founders, Judy MacDonald, marketing manager for Hewlett-Packard's Deskjet Printer Division, and Molly Lynch, an employee of Excite@Home, enlisted the Valley's most famous venture capitalists to invest in their idea for a teen girls' Web site last fall. They then proceeded to take the sins of iffy Internet gambits to a superlative extreme.
Kibu.com's blueprint was based on the kind of optimistic "research" typical of Web start-ups: 12 million teen girls are on the Internet, the founders surmised, and it won't be long before they're buying their hair products there. Kibu ("foundation," in Japanese) was aimed at "the teen girl ... at that critical age where she is building the foundation for the rest of her life," the site's page of frequently asked questions proclaimed. And Kibu's strategy, like those of many online start-ups, was one of sheer profligacy: spare no expense to build brand awareness and an online customer base in a flash; pray that the results will be impressive enough to attract another round of financing; wash; rinse; repeat.
MacDonald and Lynch brought a new level of verve to their mismanagement, documented painstakingly in an extensive postmortem memo provided by an ex-employee. Web ventures tend to spend money like convicts just out of the joint, but Kibu put ordinary dot-coms to shame, scorching through $15 million in venture capital by Oct. 3, 46 days after it charged onto an online teen field crammed with sites selling makeup and dolls. Kibu.com boomed from zero employees to 70 -- and then crashed back to zero -- in less time than some kids spend at summer camp.