Burn Rate: How I Survived the Gold Rush Years on the Internet

Burn Rate: How I Survived the Gold Rush Years on the Internet

4.3 3
by Michael Wolff
     
 

Written with enthusiasm and candor, this wickedly funny tale recounts one man's journey from rags to riches to rags in the Wild West atmosphere of Internet business. Michael Wolff got in on the ground floor of the new media business—way, way back in 1994 — and has seen the comings and goings of industry stars. Burn Rate takes the reader on the wildSee more details below

Overview

Written with enthusiasm and candor, this wickedly funny tale recounts one man's journey from rags to riches to rags in the Wild West atmosphere of Internet business. Michael Wolff got in on the ground floor of the new media business—way, way back in 1994 — and has seen the comings and goings of industry stars. Burn Rate takes the reader on the wild ride from the birth of this hot new industry, through some of the notable successes and failures along the way, and arriving at the current, maturing state of online businesses.

Editorial Reviews

Katie Hafner
. . .Wolff's own, rather vanilla [business] start-up is only the vehicle for telling a larger, far more interesting story about what makes the Internet industry and those who invest in it tick. . . .Wolff, a nimble writer with a knack for spotting colorful details, moves the story along at movie-of-the-week pace. . . .
-- The New York Times Book Review
Publishers Weekly - Publisher's Weekly
After operating a small media company for a number of years in New York City, the author joined the ranks of Internet entrepreneurs in 1994 when he formed Wolff New Media and found himself operating in an industry with few rules, much venture capital money and lots of companies losing that money at a rapid rate. Wolff's own burn rate (the rate at which his company was losing money) was several hundred thousand dollars per month. In an effort to keep afloat, he and his financial backers met with numerous companies about a variety of business combinations ranging from an outright acquisition of Wolff New Media to a partnership arrangement. Wolff failed to reach agreements with such companies as the Washington Post, Ameritech, Magellan and America Online. He describes his negotiations with these firms in a witty fashion that provides readers a glimpse of the operating style of some of America's best-known companies. Wolff's most entertaining account concerns his dealings with AOL, which he calls the most dysfunctional company in the country. Although Wolff (Where We Stand) was an early believer in the ability of the Internet to deliver powerful content to a mass audience, by the time he resigned from his own company in 1997, he had come to see the Net as more of a transactional medium. Combining humor with his firsthand experiences, Wolff has produced a book that fledgling Internet entrepreneurs would be wise to read.
Library Journal
Wolff (Net Love) became the founder and CEO of Wolff New Media in 1990, a profitable company that developed content ideas for books, magazines, and television. After meeting Louis Rosetto and Jane Metcalfe, the founders of Wired magazine, he turned his attention to developing ideas for making money in the Internet industry as a "content provider."

From 1994 to 1996, he changed the focus of his company and expanded his work force. He had to seek capital but could not get enough to keep things afloat owing to negative effects of the "burn rate," the money a company spends each month exceeding its revenue. Wolff's detailed, witty, and very readable work not only chronicles his unsuccessful attempt via relationships with venture capitalists, investors, America Online, and other players and companies to secure revenue but provides a thought-provoking and critical commentary on entrepreneurship in this business.

Kurt Andersen
An exhilarating insider's chronicle of the new media business — If there's a more honest and entertaining book on the digital revolution, I haven't seen it.
The New Yorker
Peter Martin
Michael Wolff has given us the best account of both the lure and the frustration of the Internet.
Financial Times
Business Week
Fascinating — should be required reading for all would-be Net entrepreneurs.
Ray Duncan
I was impressed at how well Wolff described his ride on a business, financial, ethical, and emotional roller-coaster — from flamboyance and invincibility, to cynicism and moral bankruptcy (at one point, Wolff swindles one of his investors out of $150K to meet payroll), and finally to despair and disillusionment.
Electronic Review of Computer Books
Kirkus Reviews
An insider's account of the digital revolution, from its earliest days in the late 1980s to its sudden prominence in the media business.

Wolff, a journalist and the founder and former CEO of Wolff New Media (Where We Stand), here chronicles both the day-to-day struggles of an entrepreneur and the heady early burgeoning of the Internet. Neither a polemic about the Information Age and the increasingly dominant role the Internet plays in it nor a business manual, his account is a business story, a first-person narrative about the difficulties for anyone of starting one's own business. His instincts as a journalist serve him well in the book's conception and in its writing. Realizing the potential of the Internet, Wolff dove in headfirst, only to find himself playing a role in what is perhaps the business story of the 1990s. Like Hollywood moguls of the past, new-media moguls have a flamboyance and verve that Wolff aptly captures. Of one such character he writes, "He had achieved an air of fabulousness, with a kind of hollandaise richness, even Robert Maxwell ripeness." And while Wolff often veers off into rather purple prose, especially when describing players such as Wired founders Louis Rossetto and Jane Metcalfe, his eye for color and detail keeps this rags-to-riches tale amusing. He is at his best when he provides insights into how the Internet industry began to take shape; his observations about Time Inc. and AOL possess an astuteness that only someone long in the know could possibly have. Moreover, Wolff recreates the sense of excitement—and the attendant chaos—that helped characterize the Internet as the disparate worlds of venture capitalists, college-kid entrepreneurs, and seasoned executives alternately clashed and came together on its behalf.

An intelligent and entertaining account of the business and culture of the Internet that skillfully merges a personal tale with the larger story.

From the Publisher
Deborah Stead The New York Times Burn Rate has a terrific feel for the crazy deals, the characters and the clashing bicoastal cultures of the Internet.

Amy Cortese Business Week Burn Rate is a hilarious and frightening account of the life of an Internet startup.

Kurt Andersen columnist at The New Yorker Burn Rate is the real deal: a smart, thoughtful, funny, knowing, clear-eyed, candid and altogether exhilarating insider's chronicle of the new media business — that is, the new media "business." If there's more honest and entertaining book on the digital revolution, I haven't seen it.

Michael Lewis author of Liar's Poker and Trail Fever Burn Rate is a delight to read. Michael Wolff shows that, in addition to a great deal of junk, the Internet may yet produce literature.

Peter Martin Financial Times Wolff has given us the best account of both the lure and the frustration of the Internet.

Peter McGrath Newsweek ...the alternately hilarious and appalling story of Wolff's efforts to take his small Web publishing company into the big time by courting investors.

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Product Details

ISBN-13:
9780684848815
Publisher:
Simon & Schuster
Publication date:
06/01/1998
Pages:
268
Product dimensions:
6.35(w) x 9.57(h) x 0.96(d)

Read an Excerpt

From Chapter Seven: A Working Relationship

We were on the brink of disaster, just as we stood on the brink of success.

We had rolled out our new and improved state-of-the-art Web "product" just a few weeks before.

It was the culmination of nearly two years' and more than six million dollars' worth of shifts and turns and reversals in the industry.

It was based on a hard-fought analysis, involving many Internet generations and business lives, of how the Internet would organize itself and grow and envelop the mass of consumers.

I was wrong in my analysis only about half of the time.

For a long while I had believed that connectivity -- that is, where your modem dialed to get you onto the Internet -- would be the central organizing principle. If you owned the server, you owned the audience. Therefore, obviously, if you wanted to be somebody in this business, you better start an ISP.

Connectivity, I had presumed through 1994 and early 1995, would be organized at a local level because the consumer would only be willing to make a local call and because the price of entry into the connectivity business was reasonable for small operators at a local level. This would give way, I logically imagined, to a form of regionalization: if you were operating in Manhattan's 212 area code, it was easy enough to put a POP (point of presence) in North Jersey's 201 area code and in Long Island's 516 area code. After a while, of course, we would see a rapid form of consolidation. Major players would begin to emerge -- nationals and regionals.

It would be, I had thought, a service game. Value added. Consumers would choose a provider of Internet service on the basis of the ease and reliability of its connection to the Net, the availability and affability of its service personnel, and on the other ways the ISP could add value -- exclusive arrangements with particular content providers, friendly and compelling guides, contests no doubt, and a range of other helpful features and come-on gimmicks.

I wasn't really wrong about this. My screwup came in thinking that this would take ten years to unfold, whereas in actuality it took just about twelve months.

My notion had been that we would offer connectivity in the New York area -- a flagship locale if there ever was one -- and develop programming ("content") that, in what seemed like a perfectly tried-and-true television model, we would syndicate (that is to say, rent) to other ISP systems, most of which would be run by techies without the skills or interests to develop content of their own.

Rich from our CMP deal and with remarkable optimism and innocence, we set about building an ISP in the fall of 1994. If I had once questioned why Time Warner would so blithely plunge into a technology it knew nothing about, I never once paused to ask myself, as technically disinclined as the next fellow, what I had in mind. The motivation, I now think, was that seeing the future with what appeared to be greater and greater clarity, I just had to go there; anything else seemed like rank cowardice. To be told that you don't have the wherewithal or talent or temperament to deal with the mechanical world is not something that an ambitious American, accustomed to a lifetime of transparent technologies (after all, I can work a computer, and my wife and children can certainly program a VCR, even if I can't), would willingly accept.

Weird Stan said he could build me an Internet provider system. He wasn't happy about it. Nor did he believe that the average American belonged on the Internet. But, technically, he could do it. If that's what I wanted.

Determined that our system would be as technically proficient and as physically stable as possible (when West Coast companies go public, they have to disclose that they sit on top of geological fault lines that could destroy their infrastructure at any moment), we established our servers, after long negotiations, in a secure communications facility run by one of the hottest fiber-optic telephone companies in the country, on top of the New York Stock Exchange overlooking Wall Street in downtown Manhattan. It had the perfect ring to me. I could hear the old radio announcers: "Coming to you from our transmitters atop the Empire State Building..." Now it would be "From our servers at the New York Stock Exchange..."

Anyone who has ever conducted a business that is even remotely dependent on a telecommunications company, a long-distance carrier, or one of the RBOCs (Are-boks, like Reeboks -- Regional Bell Operating Companies) has stories of pain and frustration mounting to murderous rage rivaled only by, well, one's own family. There's no way out of the dysfunction.

The slick, humming, clean, climate-controlled, fire-proofed wonder-of-modern-technology "facility" we had rented at ground zero of efficient, triumphant capitalism turned out, in fact, to be a dusty, hot, garbage-strewn, just slightly oversize closet, with a cage surrounding our servers. The "support personnel," were off-the-waterfront guys blowing smoke (literal and otherwise) all over our Sun stations and Cisco routers.

For four months Weird Stan sat in the "cage," tinkering, storming, cursing, belittling, and then finally producing a system that could do, well, a lot -- but not everything. Like bill our customers. It couldn't exactly tell us how much people owed. But that was okay. As long as we had something. It was okay because the opening of the system was six months overdue and for the last four months our six employees had been fielding calls from people who wanted to sign up for the expansive free offers (15 HOURS FREE!) we were advertising in Wired and in a variety of computer magazines.

Robert, our office assistant, whom we had hired out of a Long Island delicatessen (The Deli Button) because his mother had gotten me on the phone ("He just needs a chance"), had developed a whole new sense of corporate inefficiency and remoteness, which he communicated to our prospective customers. "Yes, I understand your frustration. I'll pass that upstairs. The final date hasn't come down to us yet. No, no, I'm not privy to that information." There was no upstairs. Robert sat directly outside my office, staring in at me all day, waiting for word that we would actually begin to offer Internet service.

In my short, unhappy life in the service business, I quickly came to hate customers.

Copyright © 1998 by Michael Wolff. Reprinted by permission of the publisher, Simon & Schuster.

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What People are saying about this

Michael Lewis
Burn Rate is a delight to read. Michael Wolff shows that in addition to a great deal of junk, the Internet may yet produce literature.
Kurt Andersen
Burn Rate is the real deal: a smart, thoughtful, funny, knowing, clear-eyed, candid and altogether exhilarating insider's chronicle of the new media business -- that is, the new media 'business.' If there's a more honest and entertaining book on the digital revolution, I haven't seen it.'

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