The New New Thing: A Silicon Valley Story

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Editorial reviews

Product Description
As American capitalism undergoes a seismic shift, Michael Lewis, author of the bestselling Liar's Poker, sets out on a Silicon Valley safari to find the true representative of the coming economic age. All roads lead to Jim Clark, the man who rewrote the rules of American capitalism as the founder of (so far) three multi-billion dollar companies-Silicon Graphics, Netscape, and Healtheon. Lewis's shrewd, often brilliantly funny, narrative provides ahead-of-the-curve observations about the Internet explosion and how the success of Silicon Valley companies is forcing a reassessment of traditional Wall-Street business models.

Weaving Clark's story together with that of this new business phenomenon, Lewis has drawn us a map of markets and free enterprise in the twenty-first century and blown the lid off the changing economy.

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Amazon.com Review
Michael Lewis was supposed to be writing about how Jim Clark, the founder of Silicon Graphics and Netscape, was going to turn health care on its ear by launching Healtheon, which would bring the vast majority of the industry's transactions online. So why was he spending so much time on a computerized yacht, each feature installed because, as one technician put it, "someone saw it on Star Trek and wanted one just like it?"

Much of The New New Thing, to be fair, is devoted to the Healtheon story. It's just that Jim Clark doesn't do startups the way most people do. "He had ceased to be a businessman," as Lewis puts it, "and become a conceptual artist." After coming up with the basic idea for Healtheon, securing the initial seed money, and hiring the people to make it happen, Clark concentrated on the building of Hyperion, a sailboat with a 197-foot mast, whose functions are controlled by 25 SGI workstations (a boat that, if he wanted to, Clark could log onto and steer--from anywhere in the world). Keeping up with Clark proves a monumental challenge--"you didn't interact with him," Lewis notes, "so much as hitch a ride on the back of his life"--but one that the author rises to meet with the same frenetic energy and humor of his previous books, Liar's Poker and Trail Fever.

Like those two books, The New New Thing shows how the pursuit of power at its highest levels can lead to the very edges of the surreal, as when Clark tries to fill out an investment profile for a Swiss bank, where he intends to deposit less than .05 percent of his financial assets. When asked to assess his attitude toward financial risk, Clark searches in vain for the category of "people who sought to turn ten million dollars into one billion in a few months" and finally tells the banker, "I think this is for a different ... person." There have been a lot of profiles of Silicon Valley companies and the way they've revamped the economy in the 1990s--The New New Thing is one of the first books fully to depict the sort of man that has made such companies possible. --Ron Hogan

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Customer reviews

review by: date: 2009-01-04 rating:
Not a bad read, although nothing spectacular
One has to remember that this book was written during the burst of the Internet bubble. At that time, the general view is that the Internet bubble were purely speculative and would not have any lasting impact. Michael Lewis went against the conventional wisdom at the time and described in a series of tales the transformational powers of the web still being played out. The stories did not quite make a coherent whole. However, the observations were relevant.

In terms of writing, this book does not compare favorably to the master piece "Liar's Poker." Therefore, I give it a 3 star.

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review by: mr_grumpy date: 2009-01-03 rating:
The Boat
It's all about the boat. Here, Michael Lewis follows the career of Jim Clark, founder of Silicon Graphics (now SGI), Netscape (now, well, something else) and then Healtheon (something else again.) Along the way Clark makes a zillion dollars and gets investment money as easily as turning on a tap. Although this book is quite old now (in terms of Internet years) the same basic lessons seem to be applicable in today's (well, until 2008s crash anyway) environment. That is, (a) suffer from ADD (or is it ADHD?), and know when to spin the message way beyond hyperbole. Clark comes across as a super-intelligent hyperactive child. Had he been 15 years old, he'd have been put on a cocktail of drugs and told to sit in the corner and be quiet. Instead he's given hundreds of millions of dollars of investors money on business plans and ideas written on what feels like restaurant napkins. Lewis, the writer, seems to be dragged along for the ride hanging on for dear life.
Reading it now, after the IT crash of 2001 and the General Collapse of 2008, I have no pity for how any of those people might be suffering now. They had the very, very high life. Clark however doesn't forget the small people who have helped him along the way and makes sure that stock options are given out to those slaving over the hot keyboards.
All through the book though, Clark's dream of owning the biggest sail boat ever holds the story together and act as a message of the size of the plans Clark has. And how no matter how big Clark sees or wants something, there are still physical laws that limit him. One thinks that if Clark could rewrite the laws of the universe, he would. Or at least start a company with investors money to try and do it, float it on the NASDAQ then live off the profits. Until the next New New Thing comes along.

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review by: date: 2008-07-02 rating:
Why Good Stories Are Better Than Bad Management Books
This book could easily be transposed as an academic study in a scholarly journal or as a "how to" article in one of those business school reviews that cater to the deep anxieties of high-powered executives. The same material that Michael Lewis has collected could be used by an academic to formulate hypotheses, validate theories, and construct models of business behavior. In fact, a growing subset of management science deals with the phenomenon that Lewis describes in his narrative and that is known in the academic literature as serial entrepreneurship.

In this respect, one could very well transform the portrait of Jim Clark into a diagram of the five abilities that a serial entrepreneur needs to cultivate:
- the ability to repeatably recognize a market. Jim Clark is after markets worth billions of dollars, and strives to stay ahead of the curve by identifying business opportunities that Microsoft has not yet seized.
- the ability to repeatably create a product or service. Jim Clark started with a chip that allowed computer to do 3D graphics, then moved on to pioneering the browser business with Netscape, then his attention turned to the healthcare market and then again to personal finance, markets for which he offered innovative business models.
- the ability to repeatably motivate individuals/teams and build an entire organization to follow in his/her pursuit. People joined the bandwagon because Jim Clark offered them the promise to become incredibly rich, but also because his ventures were simply the place to be in the Silicon Valley.
- the ability to delegate and surround themselves with talent that complements their own. Jim Clark is compared to a conceptual artist who comes up with the idea and let the other do all the actual work.
- the ability to reinvent oneself. As the author notes, "other people grew old, he stayed new".

Or the article could list the lessons that one learns from creating more than three successful ventures:
- Don't Draw Business Plans. Jim Clark's notion of a business plan is to identify a trillion dollar-worth market, gather enough bright people and throw them at the problem so that something good will come out of it.
- Don't Fall In Love With The Product. It doesn't really matter what the company is trying to sell, so long as it is identified as an Internet company. When Clark assembled a team of engineers to "fix the US health care system", as the team leader acknowledges, "no one knew a fucking thing about health care".
- Stick To Your Guns. As an observer remarks, this is clearly a bad trait if you stick to your guns when you're clearly wrong, but Jim Clark and his team of bright engineers were "almost always right".
- Leave When the Party Starts. Jim Clark becomes disinterested as soon as his ventures take off the ground, and very soon moves on to the next challenge.
- It's OK to Fail. Jim Clark predicted that the future of information technology laid in interactive TV, then let others face disaster on the basis of his failed diagnosis. The same engineers who spent months designing an unmarketable device could then be drawn into his next venture.
- Never Look Back. "I don't give a shit about the past", says Clark.
- When to Stop. That is precisely the lesson that a serial entrepreneur like Jim Clark never learns.

But of course Michael Lewis' book has very little in common with a business review article. Readers who find management books profoundly boring and uninteresting can still be attracted to this story, which evokes at times Moby Dick or The Great Gatsby. Michael Lewis is to the dot-com era what F. Scott Fitzgerald was to the Jazz Age. As the internet boom has now receded into the past, this book will remain as a monument to the follies and hopes of the internet bubble era.

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review by: date: 2007-10-18 rating:
What would you do if you researched a book and didn't find anything?
I'm a big fan of Michael Lewis. He usually brings characters and situations to life and provides a perspective on a situation that introduces me to a new way of looking at things. That's not the case here.

I get the feeling when Michael Lewis got permission to follow Jim Clark around for several months to write about him he thought he'd hit the mother load of great book material. Here was a guy who had traipsed through the daunting world of technology with a seeming Midas touch. Heck, the man had started Silicon Graphics and Netscape.

As I read the book, however, something strange happened, I started wondering, "When did Michael Lewis realize he was following the most improbably boring man in the world?" Jim Clark should be fascinating; he starts huge companies and turns venture capitalists on their ears, he flies helicopters, rides motorcycles and builds ludicrously complex, large and expensive sailboats. Jim Clark is a man who is never satisfied and always striving for the "New, New Thing." Yet somehow, Jim Clark is also apparently stone cold dull.

In the course of the whole book, not one Jim Clark quote is interesting, entertaining, or insightful. It doesn't seem like Clark won't open up to Lewis, it's more like he's a one-dimensional guy. Lewis writes the book in a way that indicates that he's an author that knows he's got nothing but has invested far too much time in research to try to turn back. The book becomes focused on the attempt to get Clark's newest technology-laden boat ready for an Atlantic crossing; hardly what I'm guessing Lewis set out to write.

The crossing itself turns out to be a non-event and unfortunately the book does to. Don't despair though, read Moneyball or Liar's Poker or Blindside and you'll find that Michael Lewis can, and usually does, deliver the goods in spades.


review by: date: 2007-10-01 rating:
A distorted view of Silicon Valley technology startups
"The New New Thing" tells two stories. The first is the story of Jim Clark, a technical entrepreneur who founded three companies -- Silicon Graphics, Netscape, and Healtheon -- that achieved phenomenal heights during the Internet boom of the 1990's. Clark is, to say the least, an interesting character; at least two of Clark's business associates are quoted in the book calling him a "maniac". Clark is driven almost entirely by an unending greed, so for me at least, he quickly became an unsympathetic character around which to hang an entire book. Another criticism I have is that far too many pages of the book are spent on Clark's quest to build and debug Hyperion, the world's largest computer-controlled sailboat. These sections were a distraction from the rest of the narrative. (By the way, it's pretty clear that although they may have been smart, the people writing the software for Hyperion -- including Clark himself -- were all pretty lousy software engineers.)

The second story is that of Silicon Valley, and it doesn't come off looking much better than Clark. Lewis seems to have been granted incredible access to Clark's life, which included the ability to interview and attend meetings with the Valley's top movers and shakers -- the engineers, senior managers, and venture capitalists who fund them. As a computer scientist who has lived and worked in the Valley since 1991, I found this material to be enlightening, and certainly the strongest part of the book. Perhaps most fascinating is the way the decisions of the venture capital (VC) firms and investment banks are based so much on perception rather than sound reasoning. For example, one minute the VCs are writing off their Healtheon investments as a total loss, but the next minute -- when Clark offers to invest $40M of his own money in the failing venture -- they all clamor to invest more in it. Sadly, during the "irrational exuberance" of the late 1990's, this was actually a winning strategy.

One danger in writing a book about the new new thing -- at the height of the Internet bubble no less -- is that it can quickly become old. And this book has not aged well. Yes, Jim Clark was the first person in Silicon Valley to have founded three companies with a market capitalization exceeding $1 billion, and yes, he made himself and many others around him obscenely rich. But most of the companies he started have not been lasting successes: as of this writing in 2007, Silicon Graphics is dying, having lost tens to hundreds of millions of dollars in each of the last four fiscal years; Netscape was acquired by AOL, whose subsequent acquisition by Time Warner nearly killed the latter company; Healtheon merged with WebMD, whose business model is substantially less ambitious than Clark's original concept for the company; and myCFO, the newest new enterprise mentioned at the end of the book, morphed into a company that offered illegal tax shelters to wealthy clients, came under investigation by the IRS, and was eventually sold for only one third of the original money poured into it. Toward the end of the book, Lewis also wryly mocks John Doerr's VC firm Kleiner Perkins for paying $25M for a 33% stake in Google, which he writes "consisted of a pair of Stanford graduate students who had a piece of software that might or might not make it easier to search the Internet." Poor Kleiner Perkins. Their Google investment was obviously a terrible mistake.

Michael Lewis is a great writer, but I enjoyed two of his other books far more: Liar's Poker: Rising Through the Wreckage on Wall Street and Moneyball: The Art of Winning an Unfair Game.

All in all, "The New New Thing" does a good job of exposing the underbelly of Silicon Valley capitalism. But its focus on Clark and companies born out of the Internet bubble gives a distorted picture of the challenges in founding and running a technical startup. For a more accurate depiction, I recommend Startup: A Silicon Valley Adventure.

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