I’ve just finished Sarah Lacy’s book Once You’re Lucky, Twice You’re Good: The Rebirth of Silicon Valley and the Rise of Web 2.0, and I’m feeling a little…green. Lacy’s portrait of this decade’s Web industry is so relentlessly shaped by the yardstick of cash — how much money this entrepreneur made, how many millions that startup is valued at — that by the end of the book, you can’t help having absorbed a little of that world view.
As I put down the volume, I found myself thinking, gee, why didn’t I start a company in my dorm room and pocket tens of millions before I turned 30? Then I slapped myself in the face a couple of times and reminded myself that the last time I lived in a dorm room, the Web didn’t even exist — and that when I set out to become a writer the idea wasn’t, how can I make millions, but rather, is it possible to support myself doing what I love? (I was lucky enough to have the world answer “yes!”)
To be fair, Lacy’s a business reporter; she’s written a business book; business is all about money. She paints a colorful and absorbing portrait of the world of Silicon Valley’s latest wave of smart kids to strike it rich. On the other hand, I can’t accept that her account offers an accurate portrait of “the rise of Web 2.0.” Because, in a way, I feel like I was there, too, at least in the earlier phases, talking with many of the same people and companies that Lacy writes about, showing up at many of the same conferences, witnessing the same phenomena. And it just looked, and felt, different to me: at the start, it was much less about retaining control of one’s company and much more about giving control to one’s users.
First, the good stuff about Once You’re Lucky: It’s full of amusing anecdotes, some of them illuminating, and it offers some valuable insights into the motivation of many of today’s young Web entrepreneurs and the complexity of their relationships with their financiers. It gives a great tour of how the startup and venture capital games have changed over the past decade, as the cost of launching a company has dwindled, reducing the need for big upfront investments that dilute founders’ stakes, even as the prospect of everybody-gets-rich IPOs has grown rarer.
I fault the book in a few areas. In tracing the emergence of the Web 2.0 era’s emphasis on social networking and user contributions, Once You’re Lucky is neglectful of the long history of these phenomena that predates the Web 2.0 era. From Amazon book reviews to the Mining Company (later About.com) to the AOL “guides” and on and on, the so-called “Web 1.0” era was actually full of content created by “the crowd.” Its most overinflated and notoriously flaky IPO, in fact, that of TheGlobe.com, was entirely a “community play” (though in a way that betrayed the best possibilities of online community). The Web of the day just wasn’t as efficient as the later generation of companies at organizing the material contributed by users, and there weren’t nearly as many contributors, and Google hadn’t come along yet to help the rest of the Web find the contributions (and to help the companies profit from them).
My biggest beef with Lacy’s book is that its choice of which companies to focus on seems capricious. Maybe it was just based on who she got access to. Plainly, Lacy got lots of great material from one of her central figures, Paypal cofounder Max Levchin, and she paints a thorough profile of the driven entrepreneur. But, his company, Slide, just isn’t all that interesting or innovative. After reading several chapters about it I still can’t tell you exactly what the company’s driving idea is. It does slideshows on MySpace! It’s big on widgets! It out-Facebooks Facebook with apps like Super Poke! But, you know, if you were stuck in the proverbial elevator with Levchin, could he actually tell you what Slide is all about?
There are other stories in the book whose inclusion makes more immediate sense. Few today would argue against Facebook’s significance, and it’s worth the time Lacy spends on it (though one might look for a little more skepticism). Ning may or may not prove important, but Marc Andreessen’s story is valuable in itself. What’s most interesting about Digg is its model for group editing (which, again, is based on “Web 1.0” roots via Slashdot), not its so-far-unfulfilled quest to sell itself.
Lacy might have delivered a more comprehensive portrait of Web 2.0 by offering more than cursory mentions of the companies that, in my book, really created the template for that phenomenon: Flickr, Delicious, the short-lived Oddpost (which got absorbed into Yahoo Mail). These small startups, growing like mushrooms out of the mulch of dead dotcom treetrunks, pioneered virtually all of the tools and technologies we now think of as “Web 2.0”: easy sharing of media creations; tagging of content to create user-generated “folksonomies”; Ajax techniques for inside-the-browser applications; and so on.
It seems that even though these services and companies were at the heart of the invention of Web 2.0, they don’t figure prominently in Lacy’s narrative because, by the financial yardstick, they were relatively small potatoes (all three were acquired relatively early by Yahoo for amounts rumored to be in the low tens of millions). Levchin is a lot richer than the founders and creators of these companies, but in my view, their work was far more significant.
As someone in the middle of writing a book on a related topic that is inevitably going to face similar criticism (how could you write about this blogger and not that one?), I know that Lacy couldn’t possibly cover every significant company. It’s just not clear what criteria she used to make her choices beyond the will-o’-the-wisp that is market valuation (especially wispy when your company is not actually traded on the market).
So this is where I say: the importance of a company does not lie in how rich it makes its founders, but rather in how widely its ideas spread. The business reporter who is too easily mesmerized by the number of zeroes in a company’s valuation is like the political reporter who is only interested in the horse race.
By themselves, numbers are dull. To me, the fluctuations of a company’s market value, like the ebb and flow of a politician’s polling numbers, is only of interest as part of a larger picture: How is that company, or politician, influencing our world?