Monkee business

Monkee business

It's very difficult to sit down and write one of these columns when you have I'm A Believer stuck in your head. It's not just that it's a very irritating song - but because it runs directly counter to the brief of the column. Please bear with me through my torment.

I am, in general, not much of a believer. My years of observing the technology industry have shaken most of the wide-eyed wonder out of me, and replaced it with a crusty cynicism possibly more suited to a haddock fisherman. Not that I think that's unhealthy, or a precursor to some bizarre career move. I'm not about to purchase waterproof boots and begin cultivating a fake Irish accent (requisite for any good haddock fisherman). But it does tend to leave me shaking my head at some of the goings-on around me.

Take, for instance, Internet startups and the stock market. This is an area in which the ratio of wide-eyed wonder to crusty cynicism is way out of whack, and a bit of the latter is sorely needed before it gets out of hand.

What am I saying? It's out of hand. I don't directly own any shares in any technology companies - partly it's the obvious conflict of interest thing: I sometimes know what companies are going to do, even before most of the employees. I don't know what's insider trading and what's not, so I play it safe. But I also have a bit of insight into how companies work the markets, and that, more than anything else, keeps me well clear.

For instance, I know someone who used to work for Apple in the US. Couple years ago, this friend expressed dissatisfaction with working conditions and the general direction of things, but vowed to remain `until July, when my stock options will be worth something'. That was January 1998. Six months later, the iMac was unveiled and my friend departed a happy shareholder.

Could I have done something with that information, knowing in January that an exciting product, one that could tangibly change the public perception of the company, would be announced in July? Probably, but I didn't (which is why I'm sitting here trying to write a column with Mickey Dolenz in my head rather than sunning myself in Acapulco, but it's water under the bridge).

Another friend of mine works for an Internet startup (again, in the US) whose entire product and business model is Web-based. He was giving me a tour of the company last year, and I was way impressed. Tonnes of money were being poured into this thing, and the result was impressive. One thing bothered me, though. `How do you make your money?' I asked, naively.

`We haven't made any yet,' he said, `we're running on venture capital'. I won't bore you with the minutiae of the ensuing conversation, but suffice it to say that, aside from a relatively piddling stream of income from subscribers to the service, there was no infrastructure at all by which the company expected ever to make any money.

However (this is the good bit, and also the point), the IPO was imminent. Every detail of the company's stockmarket float had been planned from day one: the initial price, how much it would rise to on the first day, how much by the end of the week, when to make acquisition announcements to keep driving it up. Everything was in place to make the startup employees very wealthy indeed - everything except an actual business model.

The IPO has since happened, and my pal is indeed now a millionaire. I thought this kind of stuff was only true in fairy tales. But Internet IPOs are a bit like that. Anyway, it's for someone else, not for me.

There is a down side, and anyone looking for a ground-floor opportunity needs to be wary of it., the archetype of the Internet IPO model, has had to lay off 150 workers recently. That's out of a total workforce of more than 7500. This fact (which I regard as trivial in the extreme) made news for several days. There was panic, dear readers. The stock price fell sharply, leading one astute analyst to question the solidity of its business model.

I ask you: what business model? This is a company that has never made one red cent of profit, nor a blue one, yet its founder is a billionaire and Time's Person of the Year. If anyone couldn't question the validity of such a business model, they clearly weren't looking.

The bubble will burst, and soon, I believe. These ground-floor opportunities will find themselves exactly where they started: on the ground floor. There is not a trace of doubt in my mind.

Matthew JC. Powell has no idea why he can't stop humming 60s pop tunes. Help him out at

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