Customer Reviews

High Stakes, No Prisoners : A Winner's Tale of Greed and Glory in the Internet Wars

5 star:		(20)
4 star:		(13)
3 star:		(3)
2 star:		(3)
1 star:		(3)

 

 

Read the jacket copy of most any tell-all business book and you'll see the publisher claim that the author pulls no punches. Charles Ferguson is the real deal. You've probably never read a book that so plainly lays out the author's opinions, feelings, failures, and triumphs while recounting a company's history.

Ferguson founded Vermeer Technologies, which developed the FrontPage Web authoring / editing environment in 1994 and 1995 and was acquired by Microsoft early in 1996. Microsoft FrontPage is now used by 3 million people around the world.

The eight chapters in which Ferguson describes the 22 months of Vermeer's independent existence are riveting reading for anyone who lived through the birth of the commercial Internet. Ferguson gives his startlingly frank opinions on everyone involved: Vermeer's venture capitalists, the near-disaster of a CEO they hired, the Netscape and Microsoft players with whom Ferguson negotiated for Vermeer's purchase. He's a hard grader and as tough on himself as on others. I think that none of the things he says quite rises to the level of the libelous; but some of them will make you wonder.

Everyone with an Internet business plan should read this first-time entrepreneur's look back, especially for its eye-opening account of his dealings with venture capitalists. Read it before you get your money. The book will probably depress you; but Ferguson's hard-won lessons might just possibly save your bacon.

I found the early part of the book somewhat confusing because Ferguson talks about the business and venture-capital climate in Silicon Valley. Vermeer was founded in Cambridge, Massachusetts and its first investors were easterners. I assume the publisher chose to downplay this geographical undesirability in order to bask in the magic glow of the words ''Silicon Valley.'' And of course by the time Vermeer went seeking a second round of VC funding, many of the players involved were in the west. (I'll also give the author the benefit of the doubt and assume it was the publisher's choice to replace an ''a'' on the cover with an ''@'' -- lest the reader fail to apprehend that this is an Internet book.)

Ferguson, in concert with his early employees, saw very clearly the way the Internet and the competitive environment would grow. Of course he could be padding with hindsight the nature of his early strategic insight; but he ended up convincing me otherwise. For this reason I plowed through the book's final three chapters, in which he imparts his views the self-immolation of Netscape, the Microsoft problem, and the (in his opinion) vastly more worrisome problem of the incumbent telecomm companies. In my mind he had earned the right to have his opinions attended to.

I asked a former colleague who was close to the events at Vermeer to comment on the accuracy of the historical picture Ferguson paints. The reply:

''He accurately conveys what it was like to go through the Vermeer experience. I don't agree with everything he says, but I know he believes everything he says, and says everything he believes. He doesn't pull any punches.''

I'm currently involved in launching an Internet company right here in Des Moines, Iowa. One of the people we asked to sit on our board of directors said, "Read High Stakes, No Prisoners and then ask me." Whether he chooses to accept the board position or not, that was some of the most relevant business advice we've received. There are many parallels between what Charles Ferguson went through at the beginning of Vermeer and what our team is experiencing now.

High Stakes points out any number of potential traps that start up companies can fall into from the development of concept to the actual product launch. Ferguson analyses what Vermeer did do and suggests how different and sometimes better outcomes would have been achieved if he and his team would have looked at issues from other angles.

The book clearly spells out what to look for and what to avoid in areas like finding the right legal counsel, negotiating with venture capitalists and hiring executives. Sections covering these topics will be invaluable to anyone launching a company.

Ferguson also offers some brilliant insight into the Microsoft/Netscape browser war. He clearly points out where Netscape stumbled and how Microsoft capitalized on Netscapes' for gone opportunities.

I could have done without the last three chapters of the book covering Ferguson's opinions of the Microsoft antitrust case and the future of the Internet. He could have stopped at the point where Vermeer was acquired by Microsoft. However, the first 8 chapters of the book should be required reading for anyone seeking to launch an Internet company.

Yes, Charles is brilliant, arrogant and is lightening-fast in seeing the failings of others and himself and is willing to take ownership of them (rectifying the situation and doing something about it is another story completely...). However, he also has a massive inferiority-complex when up against anyone with more brains, more money, more privilege or more power than himself hence his complete disdain for anything Microsoft-related (never mind that it was the hand that fed him and he continues to bite it). He also fails to see that you can attract a lot more bees with honey instead of vinegar. It's not a coincidence that everyone from Vermeer, except Charles eventually landed a job at Microsoft, I suspect Gates was smart enough to see just how insanely jealous Charles must be of him. As for his acidic portrayal of many of the players in the book, I'm fairly sure Charles really reserves his most toxic rage and disdain for those persons who display A) either negative qualities he has and sees a lot of himself in and wished he did not have (i.e career opportunism, uppity-ness) or B) positive qualities he wished he had but is too nasty to ever take time out to acquire and attract (i.e Gates with his greater reserves of intelligence, power and wealth). Gates also has a quality and understanding that Charles doesn't: that life isn't just about accumulating stuff, but about the quality and integrity of the relationships around you. Gates is no innocent either but at least I've never heard any stories about him running around on his wife and kids and the people he surrounds himself with have been with him for years. Charles, on the other hand goes through people like toilet paper, he even admits that he's so impossible that people either dislike him right away or shortly thereafter - as exemplified in this book.
I've actually dated him and yes, his character does come out in his writing very strongly. So yes, he is a real jerk, and can be an even larger jerk especially when you've outsmarted him in any slight way. That being said, he also has a very warm, human, giving and honest side which for some unknown reason he hoards jealously (and glimpses of it come out here and there in the book), which is why in the book he skewers just about everyone and their dog. It's really too bad - with a talent and intelligence like that, he could have gotten a lot more for Vermeer, a lot more for himself and he'd be a happier human being instead of a 50-ish, balding, lonely, bitter software millionaire in a Mazda Miata.
A+ = for writing, use of wit and humor as well as quality
A = for relevancy of content
B = for character portrayal
C = for overall importance in the grand scheme of things

The book contains some interesting material. It offers up rich detail on the process of raising money, the operation of boards, and the functioning of engineering teams. It also has some useful insights into how companies can find themselves hurtling down the wrong path.

Yet much about the book strikes me as fundamentally disengenuous, and despite the perhaps too conspicuous "self-criticism", it evinces little true self reflection. In fact, the book is fairly repulsively self-serving.

For example, Ferguson sneers at non-techical CEOs for technical companies, and he clearly conceives of himself as a technical CEO. Yet I gather his previous experience was chiefly as some form of management consultant. I see nothing in his background that would suggest he has written a line of code, or imparted true engineering concepts to any product. Should he be throwing stones?

Ferguson excoriates Netscape for its managerial incompetence, its many misguided strategic efforts, its poor software design, its inability to establish a standard, and countless other failings. He contrasts again and again Netscape with Vermeer, as though Vermeer were an vastly superior company in all these respects. He counts the sale of Netscape to AOL as the final indicator of Netscape's utter failure as a company. Yet he clearly conceives of Vermeer as a great success. The problem with this scenario is that Netscape sold for over 4 billion dollars, and Vermeer sold for 133 million.

We never get a satisfactory account of why Vermeer, with all its filed patents, its APIs that supposedly locked people in, its glorious software architecture, and its wonderful engineering team and management, quickly sold out to Microsoft for what today would be considered a relative pittance.

Reading between the lines (this is book that requires much of that), I gather that Ferguson was in such fear and awe of Microsoft that he simply caved into their offer. Another executive might have resisted, and used the IP, and considerable technical lead Vermeer had to improve their product and perhaps diversify -- for example into e-commerce tools. Many such tool makers today command prices an order of magnitude higher than the one Vermeer got; Vermeer should have been in fine position to make such a transition, if necessary. It is hardly a testament to Ferguson's mettle as a leader that he chose instead to surrender his company and its vision to Microsoft. The easiest way to cow a bully - and Ferguson can scarcely pretend to be anything else, from what I've read in this book - is to sic a bigger bully on him. Microsoft was bigger and badder, and Ferguson gave up his whole bag of marbles with nary a protest.

Not a word in the book is however spoken of these matters. This is perhaps because they would call into question Ferguson's basic judgment and courage, and those are things he does not want the reader to doubt. Clearly, Ferguson wants us to think of him as brilliant and arrogant, as if the arrogance somehow made him more brilliant. In fact of course arrogance corrupts one's intelligence, because it puts one in a mode of dismissing nearly everything and nearly everyone. One never learns from what one dismisses.

Ferguson I think has much to learn.

I totally enjoyed this tale of Ferguson's experience in building this company. It is a well chronicled, candid account of virtually everything that goes in to making a startup company go, including identifying the initial concept, recruiting talent, attracting venture money, going to market, and ultimately being acquired. Ferguson honestly portrayed himself as a driven visionary with great ideas, lots of energy, and full of human flaws. What Ferguson doesn't cop to is his narcissism and intellectual arrogance. Absolutely EVERYBODY of any consequence in this story is evaluated based on how "smart" they are ("he was very smart"; he was smart but very arrogant"; "he wasn't very smart";). God that was tiring. But not unexpected based on the type of a**hole Ferguson seems to be. More than once he talks of his total disdain for any type of small talk, pleasantries, or any sort of normal conversation. You can't help but get the feeling that he's an intellectual snob, and absolutely the last person you'd want to be stuck in an elevator with. I'll bet he's a MENSA member.

I've started companies and I've also been a VC and neither experience is very pleasant. The only pleasant parts are getting the initial idea, seeing it work, and then selling the company. There's a saying "hide the equity - the VCs are coming!" Ferguson (and also Jim Clark at SGI) had to deal with that. The VCs come in, take all the equity, make bad management decisions (because they are financial guys and have 10 other companies to worry about) and then either take all the spoils or spoil all the take. The fascinating thing about Ferguson's story is that the story of his business is not really about products or marketshare or management, its about VCs and Microsoft. That's the new business in today's world. The only downside of this book is why be so bitter about the company that made you into a hundred millionaire?

As you might expect from a book subtitled "A Winner's Tale..." this book contains a fair amount of horn-tooting. The author also includes a lot of self-criticism, much of which is probably a calculated attempt to increase his credability. Furthermore, it grows rather tiresome to read that every person he encounters is either "brilliant", "seriously smart", or a complete dope. And every woman he encounters is "drop-dead gorgeous" to boot. Nonetheless, this is one of the best "Silicon Valley" books that's come out. It's refreshing to see someone cut through the empty hype that captivates authors such as Po Bronson, and present a pretty balanced and insightful view of the high technology world and its flaws as well as virtues. This is the only Silicon Valley book I've seen which makes a point to give due credit to farsighted public policy makers for the current boom.

I met Charles once or twice in and around MIT (he was a grad student in political science; I was/am in the engineering school). So I can vouch for the other reviewers' comments that Charles isn't Mr. Smooth. Nor do I give the book 4 stars because he seems likely to displace Seamus Heaney as a poet. But you'll never see a clearer explanation of how hired-gun CEOs can run a company into the ground. The bigger and most interesting example of this phenomenon covered in the book is Netscape. In ancient times it was believed that you had to train people for 5 or 10 years before they could assume significant management responsibility within a company. Jack Welch started at GE in 1961. He became CEO 20 years later. Steve Ballmer joined Microsoft in 1980. He became CEO 20 years later. Venture capitalists are big believers in the idea that any random company can be lead by any random people with impressive resumes. But it doesn't seem to work in the software products business and Charles Ferguson explains why not.

So it is true that the book could have been better written and better edited. But the ideas are worth the wade.

Charles Ferguson is smart. Charles Ferguson knows he's smart. But Charles Ferguson thinks he's smarter and more important than he really is, and this makes this otherwise interesting book sometimes painful to read.

The chapters covering the formation through eventual acquisition of Vermeer Technologies are an interesting education in the ways of VCs and hi-tech startups in the mid 90's. However, the last three chapters of the book are pretty worthless. These contain Ferguson's analysis of the industry and predictions for the future, and suffer because of Ferguson's worldview that he and Vermeer were far more important to the industry than they actually were. Ferguson lacks an understanding of large IT operations, and it's unfortunately evident in these chapters.

Ferguson's pronounced hostility towards certain actors in his book - including former subordinates - also makes for uncomfortable reading. Some things should simply be kept private.

Buy the book if you want to learn about VCs and hi-tech startups early in the Internet era, and don't mind wading through Ferguson's ego eruptions. Otherwise, skip it.

This is a thoughtful, comprehensive, and brutally frank treatise on everything to do with the Internet industry and the coming Internet economy. I have been involved with these subjects myself for more than 10 years, yet I learned something new with almost every page I read.

From his backgrounder on the origins and evolution of the Internet itself, to the process of founding, funding, nurturing, and finally selling a software company, everything that Mr. Ferguson writes rings true. He brings a wealth of specific knowledge to his subject, and places it the broader context of Microsoft's monopoly control of the software industry today, Justice Department investigations, and the other major players in this game.

I gained a personal appreciation of the strengths and weaknesses of both Netscape Communications and Microsoft during the reading of the book. I have to admit it changed my impressions of both companies.

In the final chapters of the book, Mr. Ferguson summarizes some of the important issues that will continue to require attention as the Internet hype of today turns into the Internet economy of tomorrow.

Obviously an experienced writer and analyst, Mr. Ferguson has also allowed his own, often volatile personality to emerge throughout this book. I think that is important, as it breathes life and adds fire to what otherwise might be a fairly dry subject.

In summary, this is a MUST READ for anyone interested in the Technology industry, and in today's world that should be everyone.