In late 1996, I got what seemed to be the chance of a lifetime: an offer to work for a small, but clearly hot, online bookseller in Seattle, a place called Amazon.com, writing and editing computer-book reviews. And yes, the offer included stock options.
The only hitch was that I'd just gotten my dream job, a magazine-editing gig that tested and thrilled me, in New York. So I stayed put, thinking I was on the sidelines because I didn't pursue dotcom lucre. Little did I know that by rejecting the specter of late-1990s riches, I actually was being truer to what the New Economy was supposed to be about.
When Jim Collins addressed the mania head-on in his essay "Built to Flip," in our March 2000 issue, what might have been seen as naivete in 1996 had come to look like outright foolishness. What sort of idiot wouldn't go dotcom? With each rocketship IPO, and worse, when Amazon hit $400 a share, I'd register the news and try to justify giving away that lottery ticket for the love of my job.
I was caught up in a bizarre emerging culture of entitlement. Dotcommers, like a pack of postmodern Scrooges, had forgotten the true meaning of the New Economy. "When it emerged in the early 1980s, the new-economy culture rested on three primary tenets: freedom and self-direction in your work; purpose and contribution through your work; and wealth creation by your work," Collins wrote. As Silicon Valley became the land of milk and money, something scary occurred — a "decoupling of wealth from contribution."
The great post-2000 flood washed away most of the dotcom garbage, but the entitlement pathology has proved remarkably resilient. In fact, its perniciousness has spread well beyond startups. "A lot of things happened after the bubble," says Collins today. "We had Enron and WorldCom, real companies flipped into oblivion. CEOs routinely fail — and fail big — and everyone suffers but them."
CEO pay keeps rising, so hired suits are reaping the rewards theoretically reserved for entrepreneurs who've actually taken on risk. The company's jobs may be in another country, its strategy in the shredder, but the CEO is loaded. That decoupling produces bitterness because it operates in both directions: The CEO gets paid beyond his contribution, while your own contribution doesn't make you any wealthier.
As tech startups rebounded around 2003, the flipping did, too. Companies barely out of short pants sold out to Google or Yahoo for eight figures. But here's where the metaphorical "battle for the soul of the new economy," as we called it, gets complicated. The most vibrant startups — things like Oddpost, FlickR, Bloglines — started as projects to satisfy personal desires, graduating to actual businesses only when enough people wanted to pay for the result. "We wanted a creative way to express ourselves," says Mena Trott, cofounder of blogging platform SixApart.
At the same time, many tech entrepreneurs today don't embrace built to last as a worthwhile goal. "There's a blurring between built to last and built to flip," says Shawn Conahan, founder and CEO of Intercasting Corp., a mobile blogging company. "The pace of technological change is too fast for the organizational inertia of companies built to last. The goal is to innovate, and that's more easily achieved at a smaller company."
The idea now is to identify a vision and then pick off small opportunities that serve the bigger goal. Take the best offer for whatever value you've created and then find more pieces of the puzzle, serially building out the big picture. This model offers purpose and contribution, and wealth creation and risk are in balance. It's an antidote to the culture of entitlement — and it makes me feel a bit better about those Amazon options.
"Imagine Hewlett and Packard sitting in their garage, sipping lattes, and saying to each other, 'If we do this right, we can sell this thing off and cash out in 12 months.' Now that's an altogether different version of the HP Way!"
— Jim Collins, "Built to Flip," March 2000