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| Mouth-Off Main PageAfter pocketing 78 million, Jim Manzi left Lotus Notes with an ego that could crush an elephant. He joined a company called Industry.net, changed the name to Nets Inc. and did nothing but diminish the company’s value. He came to the company with a bunch of old buddies who he made vice presidents of everything. Then he created a board of directors (board of directors is usually a bunch of overweight people wearing suits who get paid nicely to do nothing). The board included Michael Porter (Porter is a famous consultant/bullshitter who teaches at the capital of communist ideology, Harvard). Nets Inc also received much fanfare when they hooked up with ATT despite ATT’s track record of bumbling virtually every attempt to do anything productive with computers. In less the a year, the company declared bankruptcy.
Up until last week, however Manzi was bragging that Nets Inc was going to transform commerce, yet their web site still is unable to accept electronic payments of any kind. He just had an article in the May issue of Internet World where he describes how his company is going to revolutionize business even though he knew at that time that it was going down the tubes.
Nets Inc is not the first internet darling to get socked into reality. Open Market started out with its strategy " to be everything to everyone" even though everyone knows focus is the key to success in cyberspace. Fortunately Open Market quickly headed for trouble and the CEO was axed. Now they are doing less bragging, and just struggling to survive.
Cybercash is another cash sink hole that had a favorable article written about them virtually every week in 1996. Their plan was that everyone was going to install their fancy software before purchasing on the web. Unfortunately for them, people are purchasing on the web, but they aren’t downloading special software to do it. Now with revenues under 1 million and losses of 9 million per year, it won’t be too long before Cybercash is gobbled up or run out of business too.
Despite these recent corrections, there are still big money losing start-ups that people think are just fantastic. Amazon.com is a book store on the web currently earning 15 million in revenues with about 6 million in loses per year. Despite its inability to make money, the company is valued by the stock market at 550 million dollars. To reach that sky high valuation, not only does Amazon.com have to increase revenues dramatically, but they will have to come up with a way to turn some profits on their sales. Amazon’s current business strategy is that once they become real big, they will automatically get profitable. Unfortunately, they will realize that it is much easier to turn a profit when you are a little unknown nimble guy than a big fat one with Barnes-Nobel’s and Border’s big guns pointed directly at you.
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