LA Unconfidential #13

L.A. Unconfidential #13 October 17, 2000 It’s been very interesting to watch the meltdown of Internet euphoria from within. Of course, many predicted that, like all gold rushes, the great Internet land-grab could only end with the popping of overinflated dreams by under-delivered promises. But many others made a good living, for a couple of years, prophesizing all flavors of never-ending prosperity for anything that came close to Al Gore’s invention. I think most of them were smart enough to caveat their polyanna prophesies with clauses like, “Of course, there will be some bad business models that fail in time, but…” They would often go on, however, to make it seem that almost any net-related idea could work with enough venture funding. Bad business models routinely survived what minimal public scrutiny they were given, prior to March 2000, with a fun trick of the light that seemed to quiet even the cautious. When asked where the revenue would come from, visionaries would point to the hordes moving on-line faster than Cathy Freeman could get from Town Hall to the QVB. If pushed, they, fingers still indicating the hordes, would look exasperated at the remedial nature of the question and point out that, “We’ll just monetize the traffic and capture the value of the emergent on-line communities.” It didn’t matter that the words were indecipherable and didn’t really mean anything to anybody but the MBAs. They embodied exciting ideas. Really. But, that trick of the light turned out, largely, to be shadow-play. The smart owners of big on-line communities monetized them before last March. In other words, they sold their sites—and the users that went with them—for duffel bags of cash to businesses playing Internet catch-up: businesses that had more money than sense, and perceived an urgent need to build their on-line user base quick-smart. How much did Hotmail go for, again? Sheesh. Make that sheesh squared. In the US, there may have been greater hype in e-healthcare than in any other e-realm. Behind the sails of Jim Clark’s behemoth flagship (both literal and figurative), many startup dinghies raced for their share of that huge chunk of US GDP that is devoted to healthcare. It was a market made for visionaries: fat, inefficient, influential, omnipresent in everyone’s lives, and the anti-inspiration of the least satisfied customer body (pun intended) in the US. In the hype heyday, there seemed no healthcare industry ill that a collection of smart, aggressive e-businesses couldn’t cure. In histories of the Internet boom, the healthcare industry will make a wonderful example. Arguably, in no other industry were hopes as high for true transformation. Today, e-healthcare is mostly rubble. Alongside most other e-industries, the on-line healthcare players have watched their stock prices tumble, and worse. Most have simply run out of cash prior to IPO-ing. And no more is on the way, boys. But what’s most interesting to me is that the transformation of healthcare is happening, anyway. Just not the way anyone thought. The meltdown of e-healthcare businesses simply means that all those e-trepreneurs got it wrong. It doesn’t mean the Internet won’t revolutionize—isn’t revolutionizing—healthcare. It will. It is. My reason for cheering—and I mean this personally, not in the abstract—is that my company is one of the boats still afloat. Not only that, but two of the companies I would have said, five months ago, were our best competitors…have tanked. They’re gone. The vultures are picking over them. The scavengers are buying their servers for the scrap value of the hardware. I’m too paranoid to be anything like complacent, and I’m feeling too grateful to be proud. But, damn, I’m happy. Or, is that “relieved”? Oh, who gives a damn. There are scores of observers and analysts who are much smarter about this than me. I, however, have punted this entire adventure on the possibility of a happy ending—one way or another—whether its built on bedrock, or on fairy floss and sticky tape. Time for the next chapter. *** A deeply philosophical question has been troubling me lately: Why don’t people make and exchange mix tapes anymore? I used to like nothing more than putting the coolest stuff I was listening to on a cassette, and then passing it around to anyone with a tape deck. Actually, I did like something better than that: getting the tapes others made. I haven’t made or received a mix tape in way, way too long. I can’t figure out exactly why. Has it just become uncool, or is it that the technology has moved on into the world of free downloads, or is it just that I’ve gotten older and the practice no longer amuses my friends? I choose to see it as a symbol of the breakdown of the underlying moral code in society. (I’ve been listening to the US Presidential campaign debates.) And, if elected, I promise to fight for you to do something about it. In fact, I think we should bind together as a global community and do something about it right now. Ask not what you can do to get more MP3s; ask what you should be putting on a mix tape for Houston. Anybody sends me a tape of what’s moving them aurally, gets an immediate response, in cassette form, by air mail. Let me hear your music, and I’ll try to move you with mine. Cheers, all. Houston