BUSINESSWEEK ONLINE : NOVEMBER 8, 1999 ISSUE
BOOKS

No Satisfaction in Silicon Valley


THE NEW NEW THING
A Silicon Valley Story
By Michael Lewis
Norton 268pp $25.95

It may be true, as one venture capitalist has said, that Silicon Valley has spurred the greatest legal creation of wealth in history. And as Internet public offerings create thousands of millionaires out of next-door neighbors, stock-option fever has gripped a lot of people out here in nerdland. But is money the only thing driving this incredible innovation machine?

That's the impression one gets from reading the rash of recent books on the Valley, such as Po Bronson's The Nudist on the Late Shift and David A. Kaplan's The Silicon Boys and Their Valley of Dreams. But I don't think it's true. That's why I cringed when I read the stated goal of Michael Lewis' The New New Thing: A Silicon Valley Story: to figure out ''how this fantastic wealth got created.'' To Lewis' credit, though, his incisive and entertaining volume largely succeeds in getting past the glitter of money to identify the real key to the Valley's vibrancy: new ideas.

Lewis, whose 1989 Liar's Poker took on Wall Street's foibles, illustrates the Valley's commanding role in the New Economy by focusing on one person who exemplifies the quest for the next breakthrough idea. His subject, James H. Clark, is the founder of Silicon Graphics, Netscape, and Healtheon. He is the only person, in fact, who has created three companies that all have market values of more than $1 billion. And yet, as Lewis shows in this fascinating tale, Clark still isn't satisfied--and, like many other Valley entrepreneurs, probably never will be. ''No matter how well Jim Clark did for himself,'' Lewis writes, ''it was always two in the morning in his heart, and he was lying awake.''

Clark's almost neurotic restlessness is apparent in everything he does, from his dropping out of high school in rural Texas to his three marriages. It was only after he left Silicon Graphics Inc. in early 1994 and, along with Web wunderkind Marc L. Andreessen, started Netscape Communications Corp. that Clark hit the jackpot. Originally, he had meant to turn his vision of interactive TV, something he had pushed at SGI, into a company. But in a brilliant insight, he realized that the Internet was the main chance--and with Netscape, he launched the Internet revolution.

Soon after Netscape got rolling, however, Clark grew bored. Lewis' best stories center around how messy, self-centered, and even tinged with pettiness is Clark's process of finding what Lewis calls the ''new new thing.'' For instance, when Clark started asking venture capitalists for money to invest in Netscape, he pointedly rebuffed some SGI venture capitalists that he believed had taken too large a share of the company and then cut him out of active management.

Netscape's decision to go public so early, before it had even posted a profit, wasn't necessarily for the sole benefit of the company. No, Lewis tells us in plain amazement, Clark arranged the initial public offering to get money to build a boat. (Luckily, the stock price quadrupled the first day.) It wasn't to be just any boat, either: Clark wanted to build the most computerized vessel ever--one that he could, if he so chose, pilot from his living room, even though the 48-meter craft was thousands of kilometers away. Indeed, to Lewis, the ship represents Clark's warring urges: the itch to change the world vs. the desire to retreat into a universe utterly of his own making.

As with many entrepreneurs, the former won out. Just three hours into Hyperion's maiden voyage across the Atlantic, Clark is already wondering why he came along. Even as he sits in the boat's salon, graced by $30 million worth of Monet and Picasso paintings, he's bored out of his skull and eager to move on to the new new thing. Not even repeated mid-Atlantic engine failures--due, oddly enough, to computer glitches--rekindle his interest for more than a few hours. All he notices is that the woodwork around the portholes doesn't please him. ''The moment he suspected that he had created that perfect world,'' Lewis writes, ''he found something in it that needed to be changed.''

The only place where Lewis is a bit at sea is when it comes to putting Clark and his ventures into a larger context. Does anyone else really believe the Internet would still be muddling along in academia if Netscape had not gone public when it did? Also, the book implies that Silicon Valley didn't have much impact on the larger economy until Netscape came along and forced us to accept Jim Clark's anarchic attitude. Remember the silicon chip? The personal computer?

It's tough, too, to try to explain all of Silicon Valley by focusing on one person's experience. It also remains to be seen, given how fast Clark can lose interest in projects, whether Healtheon will turn the health-care industry on its head as Clark hopes. Indeed, he's already off on another project, MyCFO, which aims to become the prime financial service of the very rich. Lewis is dead-on when he says that Clark has ''ceased to be a businessman and become a conceptual artist.''

Still, if you're going to pick one person who embodies the contradictory impulses that define the Valley, Clark is a good choice. For better or worse, people such as Clark--brilliant, unpredictable, cantankerous--are why Silicon Valley continues to thrive. We're still waiting for the definitive book on the Valley, if there can be such a thing. Meantime, Lewis provides a look that is as penetrating as anything written so far.

By ROBERT D. HOF

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PHOTO: Cover, ``The New New Thing''



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