Bookshelf: The New New Thing

The New New Thing: A Silicon Valley Story, Michael Lewis; W.W. Norton & Co.; October 1999; 256 pages.

In the early 1990s, young creative types carried a screenplay in their back pocket in the hopes of meeting rich financiers who would offer to fund their movie. Now, everyone's packing an Internet business plan. Journalists and writers have benefited from this phenomenon too -- with each uptick of the Nasdaq, book publishers have opened their checkbooks to offer ever-more-generous book contracts.

The results are all around us. In the past few months there has been a steady stream of books attempting to capture the essence of Silicon Valley, turning geeks and other engineers into heroic characters. Homer they are not, but these offerings are proving popular with the reading public.

Many moons ago, journalist, commentator and author Michael Lewis was offered a hefty chunk -- say, around 5% -- of TheStreet.com (TSCM) stock if he agreed to be a regular columnist. He turned down the offer. Subsequently, he left a chunk of money on the table when TSC went public in May, 1999. In a column for Bloomberg on why he turned down the offer, Lewis wrote: "Truly, I do not understand this new economy of ours."

Ignorance appears to be blissful. Lewis' latest book, The New New Thing, has garnered the No. 11 spot on Amazon.com's (AMZN) bestseller list. Hailed by critics as the best and most definitive book on the culture and ethos of Silicon Valley, it is less about the inner workings of the Valley than about the life and times of one man -- Jim Clark -- who started three multibillion dollar companies.

Lewis is not interested in explaining why, at the end of the millennium, engineers are perceived as cool or what all this newly created wealth -- comparable with the gold rush of last century -- has wrought. Instead he depicts surreal developments at the edge of the phenomena, using a strategy similar to the one he employed to illuminate Wall Street (Liar's Poker) and presidential politics (Trail Fever).

In Clark, Lewis has found a colorful subject who is bored easily, harbors resentments and yet who is revered in the Valley for his ability to create riches. The story is about Clark, his 155-foot boat (named Hyperion), the creation of Healtheon (HLTH) -- a medical Web site -- and, finally Healtheon's IPO. Clark provided Lewis with almost unlimited access to information, making his task that much easier.

Clark is an odd fit for the Valley. Born "somewhere below the poverty line" in Plainview, Texas, his father abandoned the family when he was a child, and his mother should have been on welfare, but it "never occurred to her," Lewis says. Clark joined the Navy after high school -- where he scored so well in math that it baffled his instructors. He went on to get a Ph.D. in computer science, thrashed around for 10 years at various academic careers and a couple of marriages before reinventing himself and heading off to teach at Stanford.

As a Stanford professor, Clark developed a graphics chip and went on to launch Silicon Graphics (SGI). He gradually became bored with running the company, had a feud with the rest of board and, upon quitting, created Netscape, which was known as Mosaic. He took the company public and pioneered the Internet craze when the stock soared on its first day.

Clark understood the simple mantra of the late 1990s -- You don't have to be profitable to go public. He then ceased to a businessman, and, as Lewis puts it, became "a conceptual artist." For his next project, Healtheon, venture capitalists were almost begging to give him money, even though few relevant details were available. The VCs feared missing the next big thing.

Lewis spends a good portion of the book describing the construction of Clark's computerized sailboat, which is more than I needed to know. But there is a funny moment when the news that @Home acquired Excite to form Excite@Home (ATHM) sends the crew into a discussion of stocks, taxes and markets. This is a deft way of showing how a section of the population is both tech savvy and very tuned in to the financial markets.

Lewis captures the money craze gripping Silicon Valley right now. He is also very funny; the book's telling details often reveal something deep. Yet the main flaw of the book is that -- as in his previous works -- Lewis has fallen in love with a colorful character. In Trail Fever, his hero was Morry "The Grizz" Taylor, chief executive of Titan Wheel International (TWI). In The New New Thing, Lewis at times acts as an apologist for Clark -- an eccentric prone to holding grudges. Clark is too central to the book, especially given that he is not the most important character in the current craze over Silicon Valley. But then again, no single person is an ideal representative of the phenomenon.

As Lewis wrote in his Bloomberg column: "The golden rule of Internet business is: If people believe it is a success, it is by definition a success." James Clark has a hefty bank account to show for it.

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