Slightly better than average: a cautionary business tale for readers of Forbes and Fortune.
Or, how to lose a gazillion dollars in ten easy lessons.
Craig Winn, a born salesman, was a great believer in formulas to explain how the world works, preaching “the seven things consumers wanted from an online store, the five things that brands needed, and the five key principles of e-commerce.” Having endured trial by combat, selling such things as flyswatters, plastic cups, smoke alarms, and lighting fixtures, he believed with diamondlike intensity that his brainchild, Value America, was destined to be a huge hit. And how could it not be? A one-stop online mall in which nothing was unattainable, writes former corporate-communications director Kuo, Value America “would be for the Internet age what Harrods was for the entire British Empire at its height: the shopping source for all things.” It was an inspired vision, all right, but one whose balance sheet looked a little fuzzy from the start, especially after the bankers—who are supposed to be conservative, or so we’ve been told—convinced Winn that what counted was not solvency and cash sales, but spending hundreds of millions of dollars simply to lure in Web strollers, whose mere presence made a given piece of Internet real estate valuable. Whereas Winn had planned to value the company, founded in 1996, on actual revenues—as such things once worked in the world—those bankers “demanded that the company be valued based on revenues two years out. . . . In other words, if Value America got $50 million in funding in 1997 and believed that it could use that money to get $100 million in revenues in 1998 . . . the company would be valued at least two times those 1999 forecasts—or, according to this scenario, at $400 million.” The funny-money accounting, as much as any other failing, drove Value America under, as it did so many e-commerce concerns in the dark days of 2000. Though his writing is often glib and self-congratulatory, Kuo tells the story with a mix of wonky business detail and profile-style journalism, down to the last grisly moment, when “Value America was dead [and] all that was left were the spasms.”
Slightly better than average: a cautionary business tale for readers of Forbes and Fortune.Pub Date: Oct. 15, 2001
ISBN: 0-316-50749-0
Page Count: 320
Publisher: Little, Brown
Review Posted Online: May 19, 2010
Kirkus Reviews Issue: Aug. 15, 2001
Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our...
A psychologist and Nobel Prize winner summarizes and synthesizes the recent decades of research on intuition and systematic thinking.
The author of several scholarly texts, Kahneman (Emeritus Psychology and Public Affairs/Princeton Univ.) now offers general readers not just the findings of psychological research but also a better understanding of how research questions arise and how scholars systematically frame and answer them. He begins with the distinction between System 1 and System 2 mental operations, the former referring to quick, automatic thought, the latter to more effortful, overt thinking. We rely heavily, writes, on System 1, resorting to the higher-energy System 2 only when we need or want to. Kahneman continually refers to System 2 as “lazy”: We don’t want to think rigorously about something. The author then explores the nuances of our two-system minds, showing how they perform in various situations. Psychological experiments have repeatedly revealed that our intuitions are generally wrong, that our assessments are based on biases and that our System 1 hates doubt and despises ambiguity. Kahneman largely avoids jargon; when he does use some (“heuristics,” for example), he argues that such terms really ought to join our everyday vocabulary. He reviews many fundamental concepts in psychology and statistics (regression to the mean, the narrative fallacy, the optimistic bias), showing how they relate to his overall concerns about how we think and why we make the decisions that we do. Some of the later chapters (dealing with risk-taking and statistics and probabilities) are denser than others (some readers may resent such demands on System 2!), but the passages that deal with the economic and political implications of the research are gripping.
Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our minds.Pub Date: Nov. 1, 2011
ISBN: 978-0-374-27563-1
Page Count: 512
Publisher: Farrar, Straus and Giroux
Review Posted Online: Sept. 3, 2011
Kirkus Reviews Issue: Sept. 15, 2011
BOOK REVIEW
IN THE NEWS
A readable, persuasive argument that our ways of doing business will have to change if we are to prosper—or even survive.
A well-constructed critique of an economic system that, by the author’s account, is a driver of the world’s destruction.
Harvard Business School professor Henderson vigorously questions the bromide that “management’s only duty is to maximize shareholder value,” a notion advanced by Milton Friedman and accepted uncritically in business schools ever since. By that logic, writes the author, there is no reason why corporations should not fish out the oceans, raise drug prices, militate against public education (since it costs tax money), and otherwise behave ruinously and anti-socially. Many do, even though an alternative theory of business organization argues that corporations and society should enjoy a symbiotic relationship of mutual benefit, which includes corporate investment in what economists call public goods. Given that the history of humankind is “the story of our increasing ability to cooperate at larger and larger scales,” one would hope that in the face of environmental degradation and other threats, we might adopt the symbiotic model rather than the winner-take-all one. Problems abound, of course, including that of the “free rider,” the corporation that takes the benefits from collaborative agreements but does none of the work. Henderson examines case studies such as a large food company that emphasized environmentally responsible production and in turn built “purpose-led, sustainable living brands” and otherwise led the way in increasing shareholder value by reducing risk while building demand. The author argues that the “short-termism” that dominates corporate thinking needs to be adjusted to a longer view even though the larger problem might be better characterized as “failure of information.” Henderson closes with a set of prescriptions for bringing a more equitable economics to the personal level, one that, among other things, asks us to step outside routine—eat less meat, drive less—and become active in forcing corporations (and politicians) to be better citizens.
A readable, persuasive argument that our ways of doing business will have to change if we are to prosper—or even survive.Pub Date: May 1, 2020
ISBN: 978-1-5417-3015-1
Page Count: 336
Publisher: PublicAffairs
Review Posted Online: Feb. 16, 2020
Kirkus Reviews Issue: March 15, 2020
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