Wolff's 'Burn Rate': Making it work on the Internet

July 05, 1998|By Michael E. Waller | Michael E. Waller,SUN STAFF

"Burn Rate: How I Survived the Gold Rush Years on the Internet," by Michael Wolff. Simon & Schuster. 288 pages. $24.

We all know truth is stranger than fiction. Michael Wolff proves iagain with his latest book, "Burn Rate," a guided tour of the online world that resembles a zoo gone mad -- except that the creatures aren't caged.

Wolff, a former journalist who worked as a New York Times reporter in the 1970s and author of "Where We Stand," which became a six-part PBS television series, was one of the pioneers of new media. He and his company, Wolff New Media, were present at the creation of commercial activities on the Internet, where only the shrewdest entrepreneurs are able to con their way into the capital necessary to keep their enterprises afloat for another week, another month, another year.

The rules in Wolff's World are foreign to those of us who function in the more boring real world. Wolff's World is one where it is acceptable to lose money; at times, the more you lose the more you win, at least in the short run. It's a world where your vision is more valuable than your business plan. It's a world of constant misrepresentation, fabrication and outright deceit.

Or, as Wolff says, "In the cyber business, it seemed that no one ever told the truth. Sometimes it seemed that there was no truth." And it's a world in which most transactions involve someone taking advantage of someone else in the ultimate con game.

Even Wolff admits to succumbing. He describes a transaction involving his company and CMP Publishing, a successful publisher of computer magazines, in which Wolff was looking for partners to provide the capital to develop a magazine about the online world. In the end, Wolff sold CMP an off-the-shelf database that he was fully aware soon would be completely out of date as well as a brand name that quickly would become functionally generic. Which brings us to another rule of the wired world: it's an industry based on radical obsolescence -- what you are doing now will be meaningless tomorrow.

Wolff peppers his narrative with almost too-bad-to-believe bizarre characters. There are Wired magazine founders Louis Rossetto and Jane Metcalfe, cyber hippies who cashed in on showing how computers were revolutionizing the culture. There is Robert B. Machinist, the cutthroat president of one of the elite investment banking and venture capital firms in Manhattan. There is Wolff's chief investor, Jon Rubin, who Wolff came to distrust and detest. There are Steve Case and Bob Pitman, leaders of American Online, which Wolff calls the most dysfunctional company in America (this chapter alone is worth the price of the book).

And there is Wolff's wife, Alison Anthoine, also his attorney, chief financial officer, human relations director and conscience. Her advice in wonderful asides throughout the book is always witty, wise and sane.

Wolff weaves his tale with the skill of the accomplished writer he is. His prose is sometimes insightful, occasionally elegant and always entertaining. He makes the cyber world understandable by explaining the jargon without interfering with the story. Burn rate, by the way, is the money a start-up company spends each month exceeding its revenues.

But his sins of omission blemish his story, the spine of which is about Wolff's attempts to keep his company afloat. His company eventually went belly up, though Wolff himself has fared reasonably well, writing this book and as a columnist in the FTC Industry Standard, a new weekly magazine about the Internet. But we learn nothing about the fate of his 70 or so employees, who likely bore the greatest burden of failure.

Wolff also berates the traditional media, especially daily newspapers, for failing to see the error of their ways and most likely their ultimate demise. But despite his credentials as a journalist and an expert in the wired world, he offers no suggestions as to how they might adapt to thrive in the new media world.

Still Wolff does offer several truths, including his observation that the Internet might not be new media but simply a new communications system. And that few people read on the Internet, at least not as you are reading this book review, by grasping sentences and paragraphs. Instead, he argues, many Internet users are like bugs, hovering for a second over a piece of data and moving on to a new one. His estimate that America Online customers spend about 80% of their nighttime activity in chat rooms talking mostly about sex supports his conclusion.

And, finally, Wolff offers his ultimate truths: Your chances of making it in the cyber business are increased if you cut the amount and quality of content; and the Internet's greatest problem is that it lacks clear authorship and responsibility.

Michael E. Waller, publisher and CEO of The Baltimore Sun and journalist for 37 years, most of them as an editor, has spent less time on the Internet than most of the people reading this review.

Pub Date: 7/05/98

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