But... you work in IT... Why aren't we RICH?
Buy my fantasy tech... watch my heels... and... POP!
Something for the Weekend, Sir? “Monetizing is not the goal; growing is.” And with that explanation for his company’s decision to put another £11.5bn of someone else’s money through the shredder, Mark Zuckerberg fired the starting gun for the race to the next dot-com crash.
Facebook’s acquisition of WhatsApp was not ludicrous, however. Nor was it genius, nor an act of desperation. Spending inflated sums of money on unremarkable things that earn very little or nothing is simply what the tech industry does.
No doubt your life partner has, at some point, issued you with the same challenge that my wife posed some years ago: “You work in IT, so how come we’re not rich?” After all, the industry is choc-a-bloc with shit technology built from childish code cobbled together by Jolt-addled students that turned them into accidental millionaires. How hard can it be?
Well, as Zuckerberg – the Big F himself – points out, you don’t get rich with money, oh no. And despite his public blah about “growth”, nor does it matter how big you are. What’s important is how big you appear to be.
The last dot-com crash of 2000 was confidently and accurately predicted by everyone but tech investors on 14 March of that year, the day that LastMinute.com floated on the London Stock Exchange.
Like everyone else, I was intrigued by LastMinute.com’s inexplicable success prior to floatation. It was an online shop that sold things it didn’t have via amateurish-looking web pages probably created using Mr Shite. Hmm, not such a bad idea when you compare it to boo.com which was burdened with actual clothes in actual boxes on actual shelves and a visually rich web interface that required customers to install a T1 line merely to see what a £230 woolly jumper looked like.
It's not that I don't love it, it's just... it really should have arrived before New Year's Eve...
So back in 2000, I thought I’d fire up my dial-up modem and buy some concert tickets at LastMinute.com. It seemed to go OK up until the final purchase screen, which advised me that my goods could take up to 28 days for delivery – potentially due to arrive some 26 days after the concert had already taken place.
Clearly I had been too pedantic in my interpretation of "last minute" as a concept: I wasn’t such a dick that I insisted on delivery within 60 seconds but I had expected rather less than four weeks.
Compare this to the two online systems I trialled last week in order to sell some concert tickets more literally at the last minute in that they were for seats that very evening. Both methods allowed me to complete the transaction on the day. One involved dropping off the tickets at a shop in town in the morning and being told later in the day via email that they’d successfully sold, minus a fee.
The other was Twitter. I have a spare ticket, want to buy it at face value? Yes? OK, I’ll meet you at 1.30 outside so-and-so station and we’ll do the swap.
This second method did feel a bit like a Cold War movie, spies exchanging documents halfway across a bridge between East and West Germany, but it did have the important wow factor: it cost me nothing. The only unfortunate aspect was that one of my readers had to face the crushing disappointment of meeting me in the flesh, no doubt finding me shorter, fatter and more of a twat than he’d expected.
Anyway, back to LastMinute.com, remember this is the company that reached a value of $1bn on floatation Friday before – and let me stress, inevitably – going into freefall the following Monday and boldly brandishing the lance that burst the tech bubble that very same year. It had made itself appear successful to the media and big to the investors but essentially it was just a little web shop, and not a very good one at that.
If it has improved since then, great, I’ll take your word for it. But if you learn nothing else, looking big and successful and sprinkling fairy dust in investors’ eyes is the key here. The product itself doesn’t have to be much cop and it certainly doesn’t need to be profitable.
Talking of looking big, I read that WhatsItCalled has half a billion users. Now I’m not hip wid da guyeezz (double the E, double the Z, double the flava) but you’d think someone who works in the tech industry would know at least one person who uses the app, yet I don’t. No one. I’d never even heard of the bloody thing until Facebook’s announcement.
When WhatsThePoint stopped working for a weekend in the wake of its purchase by Facebook, it was said this was due to the flood of interested people trying to use it. Another half a billion must have rushed in and crashed the servers or something. That’s another half a billion people I don’t know. I don’t even know someone who knows someone who’s heard of anyone who uses the app, and apparently most of them are here in Europe.
I mean, WhatsItFor – what’s it for? It sends text messages for free! Well, so does my phone, it’s part of the package. Using WhatTheFuck won’t save me a penny so I’m intrigued as to how they intend monetising it.
Certainly, internet creep into traditional telecomms is an exciting but frequently disappointing process, as early adopters of VoIP would attest back in the day, or even now if you speak to come customers.
Take Skype as an example of a pretty mature app still making curious in-roads into telephone use. I use it all the time for international calls, long discussions and almost-conference calls. Of course I do, it’s free, isn’t it? It’s only when you want to interface with the public telephone network that you pay any money... and that’s the bit that Skype is rubbish at.
As I’ve mentioned before in this column, one of my clients insists on paying Skype to route all his calls to land lines; I know it’s him because no-one else would ring me in order to gargle mouthwash.
Ring ring. Hello?
Roland, is that you?
“Ffffffffwtzzzzlaaaargh... alugluglug... ah!”
Roland, I’m launching Skype now. Save your money, hang up and I’ll speak to you in a tick.
Moments later, we’re comfortably conversing online in recording-studio clarity. On Skype. For free.
I’ve met more than my fair share of dot-com millionaires and the story is the same every time: their tech product produced no revenues and had little chance of ever going on to do so. These guyeezz only became successful by persuading dopey city investors to flush vast sums of development money down the toilet and then used this as a platform to sell their dud enterprises to big corporations who don’t understand technology.
So if you’re looking to become a dot-com fatcat, this is what you do: create any old startup and sell it quick to a rich fuckwit before you get found out. ®
Alistair Dabbs is a freelance technology tart, juggling IT journalism, editorial training and digital publishing. He is still sore after HSBC tried to throw money at his Tech City business venture only to change their minds when told he was going to spend some of it on paint and floor polish. Real stuff like floors, walls and ceilings count for nothing: the big money’s in fantasy world of debt-ridden app startup bollox.