An avalanche of books bearing Michael Wolff's name landed on my desk in 1995. Wolff had created a bestseller titled "Net Guide" -- TV Guide for cyberspace! -- and was now trying to transform it into a hot franchise with titles like "Net Tech," "Net Money," "Net Sports" and so on. These volumes, cranked out at the rate of one every 20 days, breezily described places to go and things to do in the online world; much of their contents was dated before the ink had dried.
Wolff, in other words, had found a way to publish books that were even more ephemeral and disposable than Web pages. And people were buying them -- for a little while, anyway. Surveying the pile of "Net Junk" books in my mail bin, I wrote a newspaper column pointing out the futility of publishing paper guides to the Web -- a medium that excels in providing conveniently clickable catalogs of itself. And I figured that, just as soon as the Web audience got familiar enough with the new medium to understand this, Wolff's business would tank.
It did -- but not before Wolff took a bumpy and colorful two-year ride across the cratered landscape of the Internet industry, a journey full of desperate fund-raising deals, unlikely partnerships, outrageous schemes and comical scams. Ironically, the book he has now written chronicling this saga -- "Burn Rate: How I Survived the Gold Rush Years on the Internet" -- has a lasting value that Wolff's "Net Guide" products could never attain. Just as Jerry Kaplan's chronicle of the Go Corporation, "Startup," outlived the pen-computing boom of the early '90s that it described, "Burn Rate" will offer a lively window on the frantic lunacies of the mid-'90s Web market long after the industry has evolved into forms unimaginable today.
For one thing, it is a genuine Net-business page-turner -- and anyone who has dipped into the current torrent of books in this genre knows just how rare that is. "Burn Rate" -- the title is industry-speak for the amount of money a start-up company "burns" each month, quarter or year -- follows Wolff's ceaseless hunt for more dollars to throw on the corporate pyre he has built. The stakes are simple and stark: Can the Internet entrepreneur persuade someone -- anyone with spare bucks -- to believe in the value of his business before the cash runs out?
Wolff takes us along on this boardroom quest, and it's a journey that any reader even remotely interested in the Internet business will want to follow. The author is an entertainingly cynical guide through the labyrinth of a new industry growing under the pressure of overhyped expectations and underperforming results. At Time Warner, he discovers media execs looking down their noses at technologists ("they were like printers") yet stomping boldly and blindly into the quagmire of its money-hole megasite, Pathfinder. At CMP, the computer trade publisher, he finds clueless suburban squares desperate to purchase "the secret of cyberspace." At Random House, he tries to introduce chairman Alberto Vitale to the Internet -- and uncorks a geyser of sputtering abuse. Holding frustrating meetings with a "dysfunctional" America Online, he figures out that "Every encounter [there] ... is a process of starting over again, because an organization that is growing as fast as AOL is, from month to month, almost a new organization."
"Burn Rate" is full of the sort of name-dropping dish that helps sell books today but can make them instantly irrelevant tomorrow. What gives it claim to a more lasting place on the shelf is its first-person descriptions of the process of Internet start-up financing. Wolff's transformation from journalist and editor to would-be Web mogul begins under the tutelage of a svengali-like New York venture capitalist with the absurdly metaphorical name of Robert Machinist. An old school acquaintance of the author, Machinist tells Wolff that he could "get out" with $5 to $10 million easily, but that the real prize was "a capital base for generations to come."
Wolff likes the sound of that. The deals begin.
At one point, Machinist and Wolff enter into merger negotiations with the Web search site Magellan (now owned by Excite). Then, as Magellan's financial vulnerability comes into view -- it's even worse than Wolff's -- the deal mutates into a takeover scheme before collapsing into disarray. The chesslike ploys climax in a tense moment at the bargaining table when the Magellan CEO makes a fatal blunder by announcing something that everyone pretty much knows already: He says, "Let's get real about this, OK? I can't fool around anymore with this. I have a payroll to meet next week."
In that instant, Wolff explains, Magellan shrank from a worthy merger candidate or valuable takeover target into a contemptible also-ran. "For Machinist," Wolff writes, "the Magellan business became 'a house of cards,' a 'shell game,' a 'fantasy land,' a 'reality problem.'" But didn't that describe the whole industry, including Wolff's company? "The problem, I understood, was not the reality but Magellan's inability to sustain the fantasy."
It's difficult to argue with Wolff's conclusion that the Net industry is a con game full of posturing and lies, since he serves himself up as the damning evidence. He learns to play the game well (at one point he eludes an angry investor by pretending that his father-in-law is in the midst of open-heart surgery), but not well enough to retain control of his company or make off with the millions his banker had promised.
The paradoxical psychology of Internet finance, its combination of hysteria and cold calculation, has never before been written about with the descriptive and narrative power Wolff deploys in "Burn Rate." It's the rare "insider" book that shapes its boardroom revelations into potent dramas of business behavior. And yet by the book's conclusion you can't shake the feeling that, in its own devious way, "Burn Rate" is itself an intellectual con.
Throughout, Wolff poses as a savvy journalist turned naive businessperson: In the techno-crazed world of the Net, we're to understand, he's the Man of Words, the writer who grasps the power of language and perspective and ideas. But the stuff Wolff's company was trying to sell during the period the book covers -- from those mountains of Net guidebooks to a Web personalization service called "Your Personal Network" -- hardly represented a revolutionary effort to bring the values of quality journalism to the online world. Wolff was producing hype-driven, highly perishable goods, just like the next Net huckster.
So it's no wonder that whenever it comes to talking about Wolff's own products, "Burn Rate" turns remarkably sketchy. At the book's start, he tells us, "My lovely, wonderful company ... publishes some of the coolest guides to the Net and maintains one of the most lavish sites on the Web." Later, he writes immodestly of the ill-fated "Your Personal Network," "There was nothing on the Web that began to resemble the kind of coherent editorial vision that we had created."
But aside from these elliptical self-compliments, Wolff never looks deeply into the trenches to try to figure out why, say, his Net guide never took off while Yahoo is now the leading site on the Web. Instead, he steers "Burn Rate" toward an apocalyptic renunciation scene, in which he abandons his company (just on the verge of an 11th-hour rescue deal, if he's to be believed) after a crisis of faith in the new medium: "What if the Web, the Internet, this whole thing, wasn't, well, media?" Suddenly the industry fashion, once focused on "personalization" or "community" or "push technology," has turned to electronic commerce. But instead of realizing that this is simply the latest fickle trend, Wolff is crestfallen and decides that he "just couldn't get excited about selling stuff, online or otherwise." People apparently were not reading what Wolff published on the Internet; ergo, his final epiphany: "No one reads on the Internet ... and no one would read."
Now, if you, dear reader, are still with me here (and after well over 1,000 words!), you are helping prove Wolff wrong about that. Sure, delivering writing on the Web is still fraught with problems -- just as delivering banking services or pizza is. But people who are passionate about writing take that as a challenge, not a sign of hopelessness. Here's the heart of Wolff's hypocrisy: First, he tries to persuade us (and perhaps himself) that his mediocre Web-guide business is somehow a beacon of fine writing and editing; then, when the Internet industry fails to value that business at hundreds of millions of dollars, he complains that the medium itself is hostile to fine writing and editing.
By the end of "Burn Rate" you begin to suspect that the real problem with Wolff's company wasn't in the nature of its product (Web ventures with far worse goods have made out like bandits) or the nature of the industry but in the nature of Wolff himself. Throughout the book he displays a kind of systemic tendency toward ambivalence. While he's incinerating his investors' cash, there doesn't seem to be much fire in his own belly. It seems no coincidence that the book's fourth word is "reluctant" -- as in, "I am a reluctant participant in a conference of CEOs." Surely someone who "just can't get excited about selling stuff" is poor CEO material in an industry that has to sell itself at every turn.
Now, there's nothing wrong with a man deciding that he's not fit for a role he once fancied. Wolff seems to have concluded that he's really a writer, after all; if so, my hat's off to him -- he's a good one. But an author shouldn't turn a personal choice into an indictment of a whole industry. The failure of Wolff's company is no bellwether indication of the "death of content," as "Burn Rate" would sometimes have it; it's just one more smashup in the Web market's demolition derby -- by a driver who simply couldn't keep up.
It now appears that during all the meetings and conferences and negotiations Wolff chronicles, while everyone else was jockeying for competitive advantage, he was instead taking notes. (If he wasn't, he's got either a photographic memory or an active imagination.) That, no doubt, has made "Burn Rate" a better, more vivid book. But those people who lost their jobs when Wolff's company collapsed might have been happier with a different kind of boss -- one who was thinking less about the future book and more about the balance sheet.