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Book reviews

What we've been reading this month

Winners & Losers Creators and Casualties of the Age of the Internet 

By Kieran Levis 
Atlantic Books 
€30 ISBN 9781843549642

In his acknowledgements, postponed until the end of the volume, the author thanks his doctors at the Heart Hospital for keeping him together last year, perhaps mirroring the vast indifference of capitalism to mere flesh and blood that is narrated in this exhausting and thrilling account of the internet age to date. 

Taking us through the unpredictable and turbulent recent histories of 12 organisations, Amazon, BskyB, eBay, Google and Nokia emerge as the outright winners because they each created new markets while achieving long-term leadership of an industry. Apple, IBM and Sony emerge as both winners and losers on account of their creation of several new markets despite near-death experiences and defeats along the way. The rank losers are AOL, Encylopaedia Britannica, Netscape and Webvan. 

Despite the emotive language this is a highly intelligent, nuanced account, and Levis’ disclaimers are as salutary as his insights. Dumb luck did play its role — witness Pierre Omidyar’s haphazard creation of eBay, which was initially a fee-free exchange mechanism for techies that grew by itself for several months before there was even a business plan. Equally, Omidyar and his partner Jeff Skoll could not convince the venture capitalists that anyone was going to buy antiques online.  

At the other end of the scale one can equally see how Louis Borders of book store fame thought he could revolutionise grocery shopping with a massive capital investment resulting in enormous, automated food distribution centres at the back end, and personalised home delivery at the consumer facing front. With massive, stock-market momentum behind him and George Shaheen, Accenture’s managing partner on board, Webvan IPO’ed to much fanfare and instant gold, only to be bankrupt by July 2001 having blown $1.2bn. 

In Webvan’s case, the heresy that would prove to be a new truth turned out to be hubris. Yes; there was a future in home delivery but it would take time. Meanwhile, the existing supermarket industry was far more competitive than Borders or his geeky crew realised, and their dream of 12% profit margins actually rested on selling high volumes of luxury  lobster-type foods, a ruinous confusion of a niche and mass markets. 

Elegantly constructed, Levis’s narrative is not just about gleefully raking up the past. In the evenly numbered chapters he retraces his steps to discuss vision, discipline, ‘What it Takes’, ‘New Markets and Networks’ and ‘Creative Destruction’. He pays enormous attention to the balance within organisations between visionary mavericks and professional managers, noting that victory of one over the other is almost always disastrous for a company, such as when Ed McCracken bested Jim Clark at Silicon Graphics, or when John Sculley briefly displaced Steve Jobs at Apple, or when John Morgridge and Don Valentine got rid of the idealistic founders of Cisco, Sandra and Len Bosack.  

One enduring insight (not unfamiliar to many managers) is recognising how to balance one personality by another, and how such a team can be turbulently entreprenurial but not to the point of outright warfare.  

The internet age makes these elements more pronounced and more urgent, and everything moves at Blackberry speed. Yet for all the discontinuities of time and space, one of Levis’ conclusions is that none of the successful brands in question were built as the sort of ‘virtual’ creations that their wilder supporters thought the dotcom age would amount to.  

Levis agrees with Amazon founder Jeff Bezos, who accused bricks-and-mortar businesses of spending 30% of revenues creating good products and 70% marketing them. In the online world, that formula was reversed. “Starbucks famously built its brand one cup  at a time, but this was, in effect, what all the others did too.” Actions spoke louder than words and it was the endorsements of happy customers that drove wildfire growth. 

Behind all this is the firm view that underlying all the pandemonium and destruction of value there is progress, at least for consumers. At the end, as elsewhere in the book, Levis attempts to place the still-young internet age into a world historical context, comparing the massive, late-1990s investment of telecommunications corporations in cable to railway expansion in the mid-19th century. Investors by and large lost their shirts, yet enormous benefits were then reaped by newcomers. 

Levis’ account, which has taken him five years to construct, could well be read alongside Robert Allen’s history of Britain’s industrial revolution (see left); in both cases there was a crucial plunge in the cost of a raw ingredient (coal and information, respectively), plus the immediate lure of profits. Seen like that, the internet age seems less dazzling now than it  did even five years ago.

The British Industrial Revolution in Global Perspective 

By Robert C. Allen 
Cambridge University Press 
€20 ISBN 9780521687850

This is a beautifully written answer to a very important question: What caused the first industrial revolution and why was it British? Allen argues that trade made Britain richer earlier than the rest of Europe, allowing for higher wages and stimulating demand for the sort of products that steam engines allowed — potential profits justifying large-scale investment that would not have otherwise have taken place. The rest was down to very cheap coal when machines were terribly inefficient, an advantage that was eroded between 1800 and 1900. 

Poorly Made in China:An Inside Account of the Tactics Behind China’s Production Game 

By Paul Midler 
Wiley 
€20 ISBN 9780470405581

Chinese speaker and consultant to Western companies, Midler blows the whistle on the dodgy practices of some Chinese manufacturers. The prices Western companies pay for Chinese-made widgets are, claims Midler, literally too good to be true. Once they sign an ‘exclusive’ contract, manufacturers ramp up margins by changing the spec, sell knock-offs to other countries and flout employee regulations by sub-contracting to dirtier factories. By then its too late and, temptingly, the prices stay low. Ultimately, consumers pay the price with toxic toys and contaminated baby milk.

The Secrets of Success in Management  20 Ways to Survive and Thrive 

By Andrew Leigh 
Prentice Hall 
€12 ISBN 9780273720348

This is a superb primer for anyone entering their first or second job as a manager. That sounds bland, but in many occupations the transition from specialist professional to manager is buried with lamentable consequences (whisper: banking). Up to date with all the latest techniques, the author, a veteran manager and consultant, starts with ‘Managing Yourself’. The first and most-ignored lesson of management is to cultivate emotional intelligence. Showing leadership is relegated to No.7 while managing the organisation is placed at the very end.

International Communications Strategy Developments in Cross-Cultural Communications,  PR and Social Media 

By Silvia Cambié and Yang-May Ooi 
Kogan Page 
€35 ISBN 9780749453299

If you already Twitter and know what a vlog is, then some of the ‘what is social media?’ content here might seem pedestrian. Yet this is a must-read for anyone who blogs or vlogs, and PR professionals who are morphing from service providers to business partners. But its greatest strength is showing how fast non-Western markets are catching on — for instance, one-third of Saudi women watch The Oprah Winfrey Show via satellite, arguably of greater political significance than whatever top-down reforms the Kingdom might be getting  round to. 