Dot Bomb

The Book of the Week is “Dot Bomb” by J. David Kuo, published in 2001. This ebook details the business dealings and the ensuing suspenseful power struggle at a dot-com company called Value America between 1996 and 2001.

The online retailer’s intended brand image was to boast maximum selection of merchandise shipped directly from sellers. This delivery-on-demand arrangement allowed the company to remain inventory-free, and thus minimize overhead costs. However, in reality, it needed to use resellers for many of the supposedly infinite products it sold.

Value America’s founder and leader, Craig Winn, was a charming megalomaniac who had grand plans to partner with various major corporations in order to attract investors and make the company worthy of an IPO. Unfortunately, Winn had planned to sell stock to the public just after the peak of the dot-com boom, when brokerages’ confidence in internet companies had started to wane.

After Value America went public, Goldman Sachs issued a report that Amazon.com was the internet retailer with the highest potential for success because it had high sales margins on its then-merchandise consisting only of books; a $30 billion valuation was not out of the realm of possiblity. Goldman went on to say Value America had the worst prospects, with sales margins of 1% and runaway costs. It would have to achieve revenues of billions of dollars in order to make any money.

Toward the end of the story, the author realized “Despite the hype, headlines, and hysteria, this was just a gold rush we were in… a lot of us were kin to those poor, freezing fools in Alaska who had staked everything on turning up a glittering chunk of gold.”

Read the book to learn the fate of the author, his family and the other Value America employees with dollar signs in their eyeballs.

Until the Sea Shall Free Them

The Book of the Week is “Until the Sea Shall Free them” by Robert Frump, published in 2001.

This wordy, repetitive, yet suspenseful book tells the detailed story of the February 1983 shipwreck of the Marine Electric, among many other briefly described maritime catastrophes. The scurvy old 605-foot bulk carrier transported coal in the North Atlantic Ocean from Boston, MA to Norfolk, VA.

The investigation of what happened conducted by the Marine Board– a panel of industry officials– was subject to the vagaries of the maritime legal system. Safety inspections of ships were performed by the U.S. Coast Guard and the American Bureau of Shipping. The National Transportation Safety Board was yet another regulatory body of maritime matters.

The Marine Board generated reports on shipping accidents. In rare cases, its recommendations might include Justice Department investigation and prosecution of a shipping company executive, or a review of the license of a ship’s captain; the latter, for criminal law violation, like for negligence in putting men’s lives at risk for failure to follow safety procedures.

A ship’s officers were usually blamed for disasters because ship owners and builders had a friendly relationship with the federal government. Political contributions helped elect candidates who turned a blind eye to regulating safety in marine commerce.

The ship’s top officers were under tremendous pressure to go on a voyage despite safety violations. Whistle-blowing behavior might get them fired. There was always the threat that a rival union would be awarded their current shipping contract. Some men waited more than a year before they could be assigned their next job on a ship.

For years, disasters were waiting to happen, due to the “rationalization, denial, greed and stubbornness” in connection with repairing and mantaining of decades-old ships. In the mid-1970’s, more than one fifth of all deaths from shipping accidents were due to structural failures of the vessels.

Heartbreakingly, during a winter storm at sea, some crew members die when they are so close to surviving. The lifeboats are buffeted about by rough waves and dashed on rocks or into a seawall, or men who lack protective clothing and proper safety equipment, fall into the freezing water while trying to board a rescue boat.

As in many other industries, shipping is one in which the big companies care more about money than seeking to reduce dangerous conditions. Despite poor safety records and the expenses of lawsuits and damage to their reputations, the large players stayed in business through the decades of the twentieth century. On the flip side, in accidents, numerous greedy seamen abused a lenient system that awarded them big bucks in personal injury cases.

Read the book to learn the fates of the parties associated with the Marine Electric after its fall from grace.

The Fall of the House of Forbes

The Book of the Week is “The Fall of the House of Forbes” by Stewart Pinkerton, published in 2011.  This volume describes the changes that occurred at Forbes (a magazine publisher named after its founding family) in the post-Malcolm Forbes era.

Malcolm, a major shareholder of the company, spent extravagantly on a collection of mansions, art, and vehicles that traversed land, sea and air; not to mention business parties. He had managed the company until his mysterious death in 1991. Thereafter, his successors imposed frugality. Nevertheless, Forbes was unprepared for the new realities of the internet.

When the magazine was finally forced to restructure its operations by instituting massive layoffs and integrating print and Web, it had already been plagued for years by arrogant and petty editors, office politics, high turnover and numerous inefficiencies. While the magazine previously had a sterling reputation for meticulous fact-checking, it has jettisoned quality for dumbed-down content and Web traffic at any cost.

It is thought that the way to achieve profitability on the Web is to foster interactivity with readers.  The Huffington Post does so, but has yet to make any money. Furthermore, research has shown that people have much poorer focus and information retention when they are reading news on a backlit screen, than when reading news in print form.

Read the book to learn the history of the Forbes family, and the people and bad choices behind the collapse of this media empire.

Confessions of an Event Planner

The Book of the Week is “Confessions of an Event Planner” by Judy Allen, published in 2009.

This volume contains various realistic scenarios of business, personal and charity events to show the reader the nature of the event planning industry. The acronym for how to prepare for any problems is ABC: Anticipation, Backup plan, Code of conduct.

There is always at least one troublemaker at every business event, who must be watched. The author describes their personality types, a few of whom include those who make unwanted sexual advances; those who feel entitled to a hotel room better than the one they were assigned; men who show off their masculinity, and women who are provocatively dressed.

The author points out that meticulous planning is required with business celebrations to head off possible untoward occurrences. There are companies that try to cheat on their taxes, and business executives who have their hand in the company cookie jar. Irate guests might do damage to hotel property. There may be a male executive officer whose mistress (and secretary) is booked in a separate room, but stays in his room at night. When children are attending an event, the planner has to consider appropriate food menus, food allergies, legal waivers and contingencies for liabilities. Part of the planner’s job is to prevent lawsuits by thinking through safety issues and complying with the law. Sometimes, event employees will recognize a situation in which guests’ behavior is about to spin out of control, and put the kibosh on it. They need to work as a team.

Sometimes event planners must deal with “too many chiefs, not enough Indians” with clients preparing a personal or nonprofit celebration. The goal of the nonprofits is to raise funds, but if the goal of the nonprofits’ events representative is to acquire social power, publicity for herself, or find her next husband, then the charity event may actually suffer a monetary loss. Even when all parties have the best of intentions, the nonprofit event may also be a failure because inexperienced volunteers are running it.

In short, the author provides advice on what to do before, during and after an event to ensure a safe, enjoyable occasion that a planner can be proud of.

McIlhenny’s Gold

The Book of the Week is “McIlhenny’s Gold, How a Louisiana Family Built the Tobasco Empire” by Jeffrey Rothfeder, published in 2007.  This book tells the history of a company that sells hot sauce.

A man named Edmund McIlhenny started the company in southern Louisiana in the 1870’s. He developed a method for making the sauce so that it was very consistent from batch to batch, and its production was not easily imitated. Due to his marketing savvy, the product was soon distributed in California, Nevada, Maine and Florida– “…anyplace with telegraph lines, paved roads and train depots.” His son died in 1949.

One of his son’s sons took over the business. In order to attract a reliable workforce, he created a company village– a compound where white employees both worked and lived (almost rent-free). Black employees commuted, and held difficult, low-level, pepper-picking jobs.

Through secret political machinations, the family was able to get the sole right to use the name “Tobasco” even though competing companies had also been using it during the whole prior time.

When the company, still privately held, was well over a century old, it began to lose its grip on market leadership due to various factors, including American dietary trends, refusal to maximally automate its operations, lack of strong leadership, and growing list of family shareholders.

Read the book to learn of the company’s strengths and weaknesses, and looming opportunities and threats going into the first few years of the 2000’s.

Birthright

The Book of the Week is “Birthright: Murder, Greed and Power in the U-Haul Family Dynasty” by Ronald J. Watkins, published in 1993. This is a cautionary tale about an American public corporation whose founder failed to take steps to secure control of his company. L.S. Shoen “lacked the heart to dilute the shares of his oldest children. If he had issued himself more shares, he could have guaranteed he would always have control or if he had modified the rules, only a supermajority of shareholders could have ousted him.”

The company’s stock situation aside, the story began after WWII, when Shoen started his truck rental business. The business proved successful until his children attained adulthood, at which time, he favored two of his sons, who drained the company’s resources on their expensive hobbies. This bad situation led to a legal dispute among family members over company ownership, that resulted in murder. The newspapers mockingly reported the court battles as a family fight among “the idle rich”, as the majority shareholders were publicly viewed as heirs to the family fortune.

One of the sons was suspected of perpetrating the said murder. This is an extreme story, because even when American family members are fighting over company ownership, they rarely stoop so low as to terrorize the rival camp by killing someone.

Personal History

The Book of the Week is “Personal History” by Katharine Graham, published in 1997.

The autobiographer was born in June 1917. She grew up in a large, wealthy family, in New York City, Washington, D.C. and Mount Kisco (upstate New York). She attended private schools. At high school dances, “Of course, no boys were allowed so all the girls put on evening dresses and corsages and danced with each other.”

The autobiographer’s father, Eugene Meyer, a business tycoon, purchased the Washington Post in 1932. In 1942, she wed Phil Graham, and took his name. Over the next ten years or so, they had four children (a daughter and three sons) who survived to adulthood. In 1946, her husband was named publisher of the Post. In 1963, she experienced serious personal problems that led to her taking over the paper.

Two of the Post‘s journalists, the infamous Woodward and Bernstein, were the first to seize upon the story of the break-in at the Watergate Hotel (the 1972 campaign headquarters of the Democratic party) by Republican party operatives. Over the next few years, the paper proceeded to reveal the corruption present in the Nixon administration with regard to the president’s reelection and the start of the Vietnam War. The story was extremely complex. The paper was at once courageous and foolish for casting aspersions on the Federal government. For, the Washington Post Company owned television and radio stations, in addition to print publications. These media holdings found themselves the victims of retaliatory action when it came time for the FCC to renew their broadcast licenses.

Lawsuits were launched in connection with the scandals over whether news articles published by the Post, were revealing State secrets that would compromise the national security of the United States. Many people thought the government was simply trying cover up its own embarrassing conduct. As is now evident, the post-Nixon decades saw history repeat itself many times over both in terms of similar scandals and overzealous classification of documents.

There occurred a mid-1970’s debilitating four and a half month strike of the many unions on which the Post had become too dependent through lax management. Before disgruntled workers walked out, some sabotaged the printing presses and thereafter waged a campaign of telephone threats and physical violence on picket-line crossers. Graham got right down in the trenches, moonlighting alongside non-union executives to get the paper out. She also achieved several female “firsts” and provided various examples of how being female subjected her to treatment males would not have experienced.

The Post had its ups and downs through the years.  In early 1991, Graham handed down leadership of the Washington Post Company to one of her sons.

Ben & Jerry’s: The Inside Scoop

The Book of the Week is “Ben & Jerry’s: The Inside Scoop, How Two Real Guys Built A Business With A Social Conscience and A Sense of Humor” by Fred Lager published in 1995.

Ben Cohen and Jerry Greenfield, a couple of childhood friends who had drifted apart, resumed their friendship in their late twenties. Their work lives were aimless at the time, so they decided to go into business together. They settled on selling ice cream, based on Ben’s life philosophy, “If it’s not fun, why do it?”

Ben and Jerry worked around the clock in the couple of years it took to create a business plan and convert a gas station in Burlington, Vermont to an ice cream store. The 1978 Grand Opening saw the giveaway of free ice cream cones to the public. This book– the owners’ first– describes the trials, tribulations and triumphs they experienced in getting the business up and running, and growing.

The Vineyard

The Book of the Week is “The Vineyard” by Louisa Thomas Hargrave, published in 2003.  It is a memoir about the first wine-grape farmers on Long Island in New York State.

In the early 1970’s, Louisa and her then-husband, Alex, wanted to grow grapes to make wine to sell.  “I [Louisa] decided that having a vineyard wouldn’t take much time, so I enrolled in chemistry and calculus courses at the University of Rochester while we scouted for vineyard property.”  They thought they would be able to spend more time with the children they planned to have, if they worked in the same place where they resided.  Running a winery seemed to fit the bill.  The endeavor turned out to be more difficult than they imagined.  The Hargraves had never managed a vineyard before, let alone any business, but prior to plunging in, they “did their homework” the best they could, were passionate about wine and were willing to work hard.

They purchased a plot in Cutchogue on the North Fork of Long Island.  Cabernet Sauvignon, Sauvignon Blanc, Pinot Noir and Chardonnay were the first grape varieties they planted.  Fortunately for them, the soil was compatible with these high-quality varieties.  They released their first wine in July 1977, from fruit picked in 1975, aged in barrels.

Louisa provides a detailed account of the numerous risks grape farmers and wine makers face; the birds, bugs and weather, to name a few. She also recounts problems her family encountered, including educating their daughter and son and dealing with legal tangles concerning their business.   One particularly stressful episode involved fighting an extortion attempt by the New York State Department of Environmental Conservation.

Despite all the hardships, the Hagraves nurtured a successful vineyard because they possessed and/or acquired the passion, courage, focus, skills, talents and luck in sufficient amounts.

The Merry Baker of Riga

The Book of the Week is “The Merry Baker of Riga” by Boris Zemtzov, published in 2004.  This book described the difficulties of operating a bakery in Riga, Latvia in the 1990’s (just after the fall of Communism).

Latvia used to be a Soviet territory. The half-American author was a businessman and part-owner of said bakery.  Latvian culture was largely to blame for the poor profitability of the capitalist venture, which lasted only a few years.  Language and sanitation were among the myriad problems Zemtzov encountered.

Whenever an employee had a birthday or there was an excuse for a celebratory social gathering (which was often), the consumption of alcohol ensured that nothing got done the whole afternoon.  Alcohol consumption also played a part in a bad experience Zemtzov had with a contractor who was supposed to complete a renovation job in his home.

Nevertheless, Zemtzov described an aspect of Latvian culture that this American blogger found to be quite funny:  on one’s birthday, one is woken up at the crack of dawn by his or her loved ones, is wished a happy birthday, and has a birthday gift shoved in his or her face.

In sum, this was an entertaining tale.