Business @ the Speed of Stupid: Building Smart Companies After the Technology Shakeout

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Reading the headlines, one could easily conclude that many of today's technology-driven ventures are dying because of a lack of funds or a shortage of business opportunities. But what really lies at the root cause of their demise is a technocentric disregard for strategy and general management principles.Business @ the Speed of Stupid brings to light many of the myths that stymie unwary investors, entrepreneurs, and managers who are seeking to turn a profit in the digital economy. It highlights why smart ...

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Overview

Reading the headlines, one could easily conclude that many of today's technology-driven ventures are dying because of a lack of funds or a shortage of business opportunities. But what really lies at the root cause of their demise is a technocentric disregard for strategy and general management principles.Business @ the Speed of Stupid brings to light many of the myths that stymie unwary investors, entrepreneurs, and managers who are seeking to turn a profit in the digital economy. It highlights why smart entrepreneurs buy into dim-witted business beliefs and exposes the "big lies" that have crippled so many companies. With ultimate know-how, verve, and humor, Dan Burke and Alan Morrison reveal why brilliant engineers don't always make brilliant business leaders, how innovation is far less important than customers and quality, and that, yes, you do need to be profitable to survive on the Web. Bringing realism and experience to the table to counteract the lingering technology industry hype, Business @ the Speed of Stupid explains how to survive and profit in the next phase of our technology-driven economy.

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Editorial Reviews

Library Journal
Burke and Morrison, founding partners of Executive Thought, an executive management consulting firm, have written this book to provide insight into the mistakes that companies make when trying to introduce technology into their business. Profiling anonymous companies with whom the authors have consulted, the first ten chapters outline both the players and the projects (e.g., developing a corporate web site or implementing a technology-based marketing plan) and conclude with an analysis of what went wrong and what should have been done to increase the chance of success. The second half of the book presents the authors' framework for helping executives through the thought process of project development. The framework is a loosely connected set of generalizations drawn from the authors' experience, but it does provide a pragmatic set of guidelines that can help businesses avoid some of the pitfalls associated with new technology. Recommended for corporate and academic libraries. Stacey Marien, American Univ., Washington, DC Copyright 2001 Cahners Business Information.
Booknews
Questioning the traditional wisdom that the Internet and other information technologies are the savior of almost all businesses, Burke (CEO, Influence Direct, a marketing firm) and Morrison (CEO, Executive Thought, a consulting and coaching firm) attempt to dispel some of the myths that they argue have taken over business executive thinking. They document large- and small-scale technology-dependent business initiatives that went awry and then explain the theoretical reasons why their ten semi-fictionalized case studies failed. Annotation c. Book News, Inc., Portland, OR (booknews.com)
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Product Details

  • ISBN-13: 9780738205427
  • Publisher: Basic Books
  • Publication date: 10/14/2001
  • Pages: 256
  • Lexile: 1180L (what's this?)
  • Product dimensions: 6.23 (w) x 9.26 (h) x 0.90 (d)

Meet the Author

Alan Morrison is co-founder and CEO of Executive Thought, a consulting and coaching firm for executive leaders. He has held several technical support and management positions at NCR Corporation, Lockheed Martin, and ABF Freight Systems and has consulted with such companies as Citibank, Entergy, JDEdwards, KBkids.com and USA.net. Previously, he served as a military officer and fighter pilot, first with the United States Marine Corps and then the Air National Guard, retiring with the rank of Lieutenant Colonel. He lives in Castle Rock, Colorado.

Dan Burke is CEO of Influence Direct, a marketing firm that specializes in helping companies reach consumers on the Internet. He held various executive roles for the Denver-based software company IQdestination, was Director of Consulting Services and Director of E-Commerce Solutions for Raymond James Consulting, a national technology and management-consulting firm. Burke has consulted for such corporations as Microsoft, JDEdwards, and IBM, and currently serves on the board of eSubjects and Projectricity. He lives in Parker, Colorado.

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Read an Excerpt

At the Speed of Stupid and Accelerating

Business @ the Speed of Stupid It's About the Customer, Stupid

Most companies of any size have a Web site. Most suck! They suck because they simply fail to communicate with the intended audience. If you have or plan to build a corporate Web site, heed this: It's easy to waste a lot of time, money, and energy building a site that looks great but that fails to converse with your customer. Listen up: A good Web site isn't about you, it's about your customers. Imagine two scenarios, the first a customer receiving a brochure in the mail, the second a customer sitting across from your best salesperson. What's the difference? Lots! The first is a monologue that tells the customer how wonderful you are, whereas the second is a dialogue, during which your salesperson listens to the customer's needs, pains, and vision, and only then offers suggestions about how your company can help solve the customer's problems. The first ends up in the trash, the second ends in a sale.

A recent book, The Cluetrain Manifesto, drives home a very important point about the World Wide Web: It's a dialogue, not a monologue. Most corporate Web sites are monologues. They are about the company, not about the customer, but it doesn't have to be that way. It's easy to build a Web site that first listens to the customer and then responds in terms that are meaningful and valuable. You just have to think from your customer's viewpoint, putting yourself in your customer's shoes. If you want your Web site to be successful, stop talking and listen.

Sam Zaputa, CEO of DSTination, Inc., stared intently at his vice president of marketing, Bob Sundin. He hadn't hired Sundin and didn't have a lot of confidence in him but was stuck with him. Sundin was a friend of the founder and chairman of the board, and Sam was the consummate corporate animal. He would have to wait and let Sundin fail, something that was certain to happen eventually. Until then, Sam would make the best of it.

"We believe we can have the site up in three months at a cost of about a quarter-million. We're forecasting that the site will bring in about twenty-five prospects per month resulting in somewhere between $1 and $5 million in additional revenue per month, not bad for a quarter-million investment." Sundin paused, uncomfortable under the CEO's gaze. He knew Zaputa didn't like him and dreaded times like this when he and his work were under the CEO's scrutiny.

Zaputa shifted and leaned forward. "Look, this site has to be first-rate. It's got to be classy; I want sizzle. It has to attract customers, but don't overlook the fact that our investors are going to depend on the site to help position us with Wall Street for the IPO. We've got to build a site that will convince the big institutional investors that we are a major player in the e-solutions professional services market. Does that make sense?"

Bob nodded and said, "Sure. I've got some great copy guys ready to start work, and our graphics people have already started on the creative. We'll storyboard it and get it in front of you within two weeks."

Two weeks later Bob presented his team's work to the CEO and several board members and investors. Zaputa had been involved all along driving the content of the site, but this was the first time the board members and investors had seen it. They had a lot of comments, some of which would require changes to the design, but all in all seemed pleased with what they saw. Bob breathed a sigh of relief as he left the boardroom. He smiled at his team leader and commented, "Looks like we're off and running."

Things went well, with most of the work progressing according to schedule. The required servers and software exceeded the original budget estimate, but the CEO approved the increase under the condition that, "It had better be good." Bob was particularly proud of the work that his copywriters were doing. He almost got Goosebumps when he read:

By combining imaginative strategy, trend-setting creativity, and cutting-edge technology, we have created an unequaled eSolutions company that is ready to be your partner for success.

The site was finished on schedule and previewed at the quarterly board meeting. Bob sat proudly while Zaputa navigated through the site. Projected on the big screen in the boardroom, the site was simply spectacular. The board members smiled and nodded, and Zaputa performed in his usual brilliant manner. When the presentation was finished, the chairman said, "That was awesome, Sam! Great job! Tell your team 'Thanks' for me." Zaputa smiled and nodded.

The official site was launched with an extensive print media and Web advertising campaign, with "www.DSTination.com" boldly splashed across the pages of major industry magazines and Web sites. During the first month of operation, the number of visitors far exceeded Bob's most optimistic forecast. When he reported this to Zaputa, he received a rare smile from the CEO. "Maybe he's not such a bad guy after all," Bob thought.

A week later Bob's phone rang. "Come to my office. We need to talk about the Web site." Bob hung up and headed for the CEO's office. Zaputa was sitting at his desk, studying a computer screen covered with numbers and graphs. "We're not getting the results from the site that you forecast," Zaputa began. "It's been up for over a month and I'm not seeing any increases in contacts from prospects or new leads for the sales team. You said 'twenty-five per month,' right?" He looked up.

Bob shifted uncomfortably and answered, "Well, are we sure we aren't getting contacts through the site? I mean, how do we know if calls are coming in because of the site or because of something else?" Zaputa looked at him without expression. "We ask, right? You should know that. We'd better start seeing some results soon, or otherwise you're going to have some explaining to do to the board."

The next day Bob rounded the corner into the break room just as one of the company's most senior project managers said, "It doesn't look like the company I work for. Hell, you can't even tell from the site what we do!" Bob pretended not to hear. Back in his cubicle, he brought up the site and studied it. He had to admit that the home page didn't expressly state what the company did, but it was a well-designed page: great graphics, great copy, and lots of eye-catching animation. Yet the words, "It doesn't look like the company I work for," haunted him.

Bob could tell that Zaputa wasn't happy when he next saw him. "As if Mondays aren't bad enough," Bob thought. Zaputa leaned forward. "You have a problem. The chairman played golf Saturday with Vick Miller, president of FTV. Apparently Vick asked if we still did Oracle work. He said that his CTO had pointed out that our Web site doesn't say anything about Oracle. In fact, he went on to say that he later visited our site personally and wasn't sure if we were still in the technology business! Needless to say, the chairman isn't happy, nor am I. No wonder we aren't getting any prospects from the damn site-they don't know what we do!" Zaputa paused.

Bob tugged at his ear nervously and began, "Well, I …" Zaputa waved his hand and interrupted, "Look, I want a plan on my desk by Wednesday on how we make the site work for us. I don't care what you have to do-I want it by Wednesday! The board meets on Friday and I want to have answers. You said the site would result in new contacts and increased revenue, and they're going to ask why nothing is happening."

Bob and his team put everything aside and went into crisis mode. Working almost around the clock, they came up with a plan to revise about half of the copy on the site, putting in specifics about what the company did. They did some drawings showing a cleaner graphical approach and worked on improvements to the navigation scheme. The result would be a much simpler and easier-to-use site, one that Bob felt would be more effective. Yet at the same time he was beginning to feel uneasy. Finally, late Tuesday night he looked at the revised storyboard for the site and asked himself, "If I were a potential customer, looking for professional help on a technology project, would I choose DSTination?" He had to answer, "No." There was no getting around it: The site was about DSTination, not about what DSTination could do for the customer. There was no compelling value proposition. "Marketing 101," thought Bob. "Oh well, too late to worry about it now. I'll just have to take my medicine tomorrow morning."

Surprisingly, Zaputa was pleased with the proposed revisions. He directed a few changes, but none was significant. Bob and his team put some finishing touches on the package for the board meeting and gave it to Zaputa's secretary for distribution. Bob knew he was prepared, but he was still nervous. Deep down he knew that the changes wouldn't have the desired effect. He could now see the site from the customer's viewpoint, and he didn't like what he saw.

Entering the boardroom, Bob noticed two unfamiliar faces. It didn't take long to find out who they were. The chairman opened the meeting. "It has come to my attention that our site isn't drawing prospects as we had projected, and is apparently confusing our existing customers as well. I decided that we should have someone from outside our organization take a look and give us an independent opinion. We have two guests from One-Web Marketing here today with their assessment. They've looked not only at the existing site but at the proposed changes as well. Gentlemen, the floor is yours."

The next thirty minutes were humiliating for Bob. The consultants started on the revised home page, pointing out a variety of ills but focusing on the fact that the site talked to the visitor but didn't listen. They went on to explain that a successful Web site has to be a dialogue, allowing the customer to control the interaction. There has to be something on every page that speaks in the visitors' language, offering something of value in return for their time and attention. "You pay for mouse clicks and view time by giving the viewers something they need," one said. They labeled the copy that Bob and his team had worked so long on as "frankly, marketing fluff." Angry at first, Bob slowly became depressed. The chairman, his friend, avoided looking at him. Zaputa sat on the edge of his chair, nodding in agreement with every conclusion, occasionally casting a serious glance toward Bob. Bob knew that this wasn't going to go away; his future with the company was fading by the second.

The next Tuesday morning, Bob sat across the desk from Zaputa. He was trying to explain how he and his team would redesign the site, but Zaputa interrupted. "Look, look … . That's all in the past. We've got to move forward. I've decided to turn the site over to One-Web. Furthermore, I'm going to make a few organizational changes, as a part of which I'm going to move you into the advertising department and have you focus on traditional media advertising. You've got a lot of experience there and should do a great job. Does that make sense?" Bob opened his mouth to say "No," but didn't.

Analysis and Conclusions

Hundreds of thousands of companies have built and are building Web sites just like the one DSTination launched. Most of them are vanity sites, nothing more than exercises in pompous bravado and self-worship. Your customers need to know how great you are, but only after they ask. First, you need to listen to them, hearing who they are and understanding why they're there. Later, after they come to believe you have what they need, they will ask for your credentials, at which time, with a single click, you can give them your best marketing spiel. Consider this analogy. Suppose you went to a new attorney with a legal problem. Suppose that the attorney spent the first half-hour of your time telling you about his degrees, his famous clients, cases he has won, and so forth, all without ever asking who you are or what you're there for or anything else about you. Would you want him to represent you? Of course not! It would be obvious that you're not important to him, nor is anyone else, for that matter. All of the things he's telling you might be important later, after you've told him your problems and you're convinced that he understands and can help you. At that time, it would be nice to know his qualifications and experience, but only then; up front, you aren't interested. You just want to know that he cares about and understands your problem and can help you solve it.

The same is true of corporate Web sites. DSTination's was a quality site that spoke eloquently of the company's qualifications, experience, and mastery of industry buzzwords. But the site never gave viewers the opportunity to say anything, to identify themselves and express their needs. The site spoke well to potential investors but not to potential clients. Had the worth of the site been measured by increased market valuation of the company rather than increased revenue through sales, it might have been judged a success, but as a sales-driver it was a failure-and sales was the primary motivator behind the site investment.

Let's examine the three key issues surrounding this "failed" project and how DSTination could have enhanced its conversation with prospects and improved its return on investment.

Does the Customer Care?

Bob fell into a common trap. When Zaputa told him that the site should both attract customers and impress investors, alarms should have gone off. What marketing executive would accept the assignment to create a single marketing piece designed to sell customers and communicate information to investors and analysts? The problem here is audience confusion. DSTination created a site that reveled in its own press, but potential customers didn't care. This concept is extremely simple to grasp: Build your product and your message for your intended audience. For some reason, whenever it's time to build a corporate presence on the Web, the collective IQs of brilliant executives drop and a self-worship service begins.

DSTination was not alone in this foolishness. It is safe to say that most corporate sites are exercises in self-adulation and ego gratification. If you have any doubt about this, just take a brief survey of corporate sites you are aware of. If you really want a laugh and you know who they are, drop in on the world's leading Internet "solutions" companies. When you survey these sites, pretend to be a potential customer and ask yourself the following basic questions:

Does the site succinctly state, without me having to search for it, what the company does?

Can I quickly determine if this company offers what I'm looking for?

Does the site attempt to find out about me, my company, the market segment I'm in, my needs, or my interests?

Am I, the "customer," the center of the site, or is the site simply a long and useless verbal barrage about the company and its accomplishments?

Do I receive value in return for every mouse click and for the time I spend on every page?

Am I confronted by a copious cornucopia of boisterous buzzwords and a cacophony of multi-syllabic circumlocution-or does the site speak clearly and concisely in terms that are meaningful and of interest me?

DSTination's problem was that potential customers answered "No" to all of these questions. They were met with a lot of business jargon and marketing fluff about the intellectual capital of the company, its approach to solving problems, and other assets the company had at its disposal-and they left. These are points that should be covered and that the potential customer eventually may want to know about, but they were presented without the viewer having asked. Investors, market analysts, and potential partners might be interested, but not a potential customer looking for a solution to a problem. If your purpose is to attract real customers, you must focus on the customer and listen to and understand its questions. Table 1.1 is a list of very basic but powerful questions every corporate site should answer.

To be successful in the competitive domain, you have to establish your presence, your total image in the marketplace. Your Web site can be a key part of this, assuming you do it right. Do it wrong and it will damage your image and detract from your ability to compete. Given this fact, what should DSTination have done differently? Well, Web site design is a topic large enough to fill several books of this size, so we won't try to outline a complete site design methodology. We will, however, offer two observations about DSTination's mistakes that will help you ensure that your Web site enhances your market presence.

Who Are You?

A simple approach that DSTination should have taken is to focus on the questions: "Who are you?" and "What are your needs?" Probably the best way to frame the first question is in terms of the likely audience segments into which viewers will fit. Simply offer the viewer the opportunity to indicate which segment he or she is in by clicking an appropriate link. Likely audience segments for DSTination are customers, investors, and potential employees. The home page should have offered links that, with a single click, would have sent these audience segments to a personalized domain within the Web site intended for them alone.

What Are Your Needs and Interests?

Once the "Who are you?" question had been answered, DSTination should have moved to the next step, initiating a conversation to answer the question "What are your needs?" For example, the top-level page of the "customer" domain could have "asked" the customer (by offering appropriate links) whether he or she wanted to learn about industries that DSTination has experience with, solutions that DSTination can deliver, or technologies in which DSTination is competent. Figure 1.1 illustrates how these categories might be organized from an information architecture perspective. An important point to note is that, whether the viewer selects industries, solutions, or technologies, he or she arrives at the same information, but the presentation is personalized to fit the viewer's perspective and natural thought processes. This design is customer- rather than product-centric.

Information Archi-What?

Figure 1.1 illustrates something very fundamental to but unfortunately rare in the Web world: logical, conversational, customer-centric information flow. In contrast to this approach, the design of most corporate sites is driven by what the competition is doing. The executive sponsors assume that because their competitors are doing it, it must be right. In a recent discussion with a dot-com executive, we pointed out that his company's site had four different navigational schemes, only one of which was built around a natural customer-centric flow. The visual experience is like that of walking into a room and having four salespeople begin talking to you, all at once and all at full force, each without concern for the chaos he or she is creating. The executive responded that he was happy with it because it incorporated the look and feel of sites from several other successful companies and that it just felt good to him. The problem here is the assumption that an arbitrary approach to site design is valid. It is not, unless you are aiming for chaos and confusion. Just as the choice of sentence structure shapes the effectiveness of written or oral communications, the structure of site information flow is critical to the ability to communicate with the intended audience.

Unfortunately, this problem is worsening by the moment with the advent of creative agency influence on the Internet and the misuse of excellent tools such as Macromedia Flash®. To be clear, Flash is a powerful tool for manipulating graphics and text delivered over the Web. However, most uses of this tool reveal an obsession with being "cool" and entertaining, demonstrating a total lack of understanding of the impact on the user. Bob Sundin, the vice president of marketing in our story, was excited when he reviewed his new site because he was rightly proud that through this medium he could say great things about his company in unique ways. What he failed to grasp was that half of his intended audience, the potential customers, were not interested in what he was saying, and that he was speaking to them in a manner that was unnatural and meaningless both to customers who knew his company and to prospects who had no idea what DSTination had to offer.

Who's Minding the Store?

Bob's initial exuberance over the many visitors to the site was simply the euphoria of ignorance. Did Bob know who any of these visitors were? Did he capture any of their names or other information about them? Did he know where they came from? Did he know how much time each person spent on the site and where he or she spent that time? Did he know when or why visitors left the site? The answer to every question was "No."

This problem is not unique to DSTination; in fact, it is more often than not the case. For some reason, when it comes to the Web and technology, companies seem to abandon commonsense activities that would rarely be overlooked in a brick and mortar scenario. Would any legitimate brick and mortar proprietor make a significant investment in marketing programs without measuring the response? Would that same proprietor ignore customers when they enter its stores? This is exactly what most companies do with their Web sites. It is exactly what DSTination did.

No corporation seeking to recoup and benefit from its Web investment should be without tools like WebTrends (www.webtrends.com) or similar software to gather and analyze Web statistics. This type of software will provide you with critical information such as

How many people have visited your site,

Who is in your site, Who has been in your site, Where they came from, What they looked at, How long they looked at whatever they were looking at, and Which page they left from.

Without this kind of critical information, it is impossible to determine the effectiveness of your attempts to communicate with your prospects. Your customers behavior is talking to you, but you're not listening.

Dreaming Versus Forecasting

Bob was dreaming when he spoke the fatal words, "We're forecasting that the site will bring in about twenty-five prospects per month resulting in somewhere between $1 and $5 million in additional revenue per month, not bad for a quarter-million investment." Where did Bob find these numbers? Was it from experience? Was it from standard industry ratios? Well, it was neither, because these numbers don't exist. Bob got the numbers from the same place that most people in his shoes get them; need we say more?

There are many dangerous myths lying in wait for unwary followers of the Web-land prophets. A common and widely held misconception is the idea of magic conversion ratios that convert the number of hits on a site to projected customer leads, e-commerce sales, or whatever. Let's be clear: This type of thinking is 100 percent certified crap. It has led to millions of dollars of lost venture capital, thousands of dot-com layoffs, and hundreds of devastated entrepreneurs. Even with the recent debunking of these fables by the press, people like Bob continue to believe in them and use them.

Here's the issue. Bob didn't have any idea what the return on investment would be. He did not consider how or why people would come to the site. He did not know what they would do when they got there. Bob didn't have a clue. Should Bob then have just given up and gone home?

No! What he should have done is requested funding for a proof of concept pilot effort. He should have commissioned a high-quality, lower-cost effort that would have allowed him to learn from the behavior of customers and prospects and then determine a larger strategy for the future based on real data. Companies regularly use test marketing for their physical products; why not do the same with their "intellectual" products, their Web sites?

The DSTination case by no means covers all the issues surrounding why Web efforts typically fail to yield expected benefits, but the failure points are extremely common and at the core of many corporate site problems. Table 1.2 recaps the simple do's and don'ts for corporate Web sites.

There is no disputing that the Web can be an extraordinary medium for enhancing conversations with customers and prospects. The problem is that humans have a natural tendency to talk rather than listen, and this medium, for whatever reason, seems to intensify and draw out this stupidity. Shut up and listen!

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Table of Contents

Acknowledgements vii
Introduction 1
I At the Speed of Stupid and Accelerating
1 It's About the Customer, Stupid 11
2 The Simplicity Trap 25
3 Technology Myopia 41
4 Ready, Aim, Aim, Aim... 55
5 Mars and Venus 67
6 Ready, Fire, Aim! 83
7 Over-Gross and Under-Powered 95
8 Out of Sync, Down the Drain 111
9 Shark Fishing in a Rowboat 125
10 Intra-What? 141
II Decelerating the Stupidity
11 The Roots of Stupidity 159
12 The Executive Thought Framework 177
13 Preparing for Battle 209
Conclusion 227
Notes 231
Glossary 235
Index 239
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