The New New Thing: A Silicon Valley Story
(1999) is a non-fiction book by Michael M. Lewis
. By profiling Internet entrepreneur Jim Clark, Lewis’s book tells the story of Silicon Valley’s rise to power during the 1990s. Lewis portrays Clark as an American hero, a restless genius ever in search of the “New New Thing,” but he also casts a satirical eye over the early tech industry and the financial sector that inflated its value. Best known for Liar’s Poker
(1989), Clark is regarded as one of America’s most entertaining business writers. The New New Thing
was received by critics as a “funny, feverishly romantic business reporting in which the American lust for wealth becomes a Byronic quest” (Kirkus Reviews
Lewis opens the story on Jim Clark’s colossal computerized yacht, the Hyperion
: “The original plan, which Lord knows didn't mean very much when that plan had been made by Jim Clark, was that we would test the boat quickly in the North Sea and then sail it across the Atlantic Ocean.” In Lewis’s telling, it was Clark’s desire to build this boat that launched his career and changed the face of the American economy. One day, in the early 1990s, Clark saw the enormous yacht recently acquired by an old friend. It raised a rash on Clark’s competitive streak, and he conceived the ambition to own a boat that was not only bigger than his friend’s but could be sailed entirely by computer.
Lewis sees this inseparable combination of imagination and ambition as central to Clark, who “came from nothing, grew up poor, dropped out of high school, and made himself three or four billion dollars.” After briefly telling the story of Clark’s early life and education (a high school dropout, Clark eventually graduated college with a PhD in physics and computer science), Lewis focuses on Clark’s professional life.
In the early 1980s, Clark co-founded Silicon Graphics, Inc. By 1991, the company was the world leader in the production of computer-generated visual effects, but in 1994 Clark became frustrated with the cautiousness of the company’s management and left, once again on his “endless search for some unattainable solution.”
His next venture was the Netscape Navigator, an easy-to-use browser that Clark co-developed with Marc Andreessen. This company not only made Clark a billionaire, it also initiated Wall Street’s mad scrabble to invest in technology. Lewis uses the story of Netscape to contrast Clark with Bill Gates—then by far technology’s most famous business leader. Lewis sees Gates as a curious dinosaur, who wanted the future “to look exactly like the present.” He portrays Microsoft less as a pioneering company than as a schoolmaster, seeking to tame the tendrils of the future loosed by pioneers like Clark. Even worse, in Lewis’s account, are the traditional businessmen and financiers, whose rote ways of doing business shackle Clark’s imagination. These conflicts come to a head in the Microsoft antitrust suit. Clark leaks to the US Justice Department a threat issued by a Microsoft executive to put Netscape out of business unless they let Microsoft join the venture as a partner. The result is that Clark is free to sell Netscape to AOL (making him his first billion); Clark adds insult to injury by inviting Microsoft to join his new venture, knowing they do not dare to refuse.
Clark’s next new, new thing was Healtheon, a company whose mission was to streamline the paperwork generated by the American healthcare industry. Clark sold Healtheon to Microsoft-backed WebMD, making another handsome profit on his venture.
Lewis focuses on the role of IPOs in Clark’s success, arguing convincingly that Clark created the “Internet formula for success” which “turned traditional capitalism on its head.”
“Traditionally, a company persuaded people to invest in it by making profits. Now it persuaded people to invest in it first and hoped the profits would follow." In the new economy of Silicon Valley, "You had to show that you were the company not of the present but of the future.” Lewis concludes that this amounts to the colossal edifice of US capital bending itself around the personal enthusiasms of one Jim Clark.
As he tells the story of Clark’s businesses, and particularly the deals that made them so profitable to Clark himself, Lewis examines the interplay between venture capital, tech entrepreneurs, and the programmers who work for them, to paint a portrait of how Silicon Valley works. Again, Lewis sees Clark as central to the way business is done in the Valley. He shows how Clark alternately exhilarates and exhausts the programmers and financiers he works with—not to mention the crew of his 157-foot super yacht.
The $1 million yacht dies in the middle of the Atlantic (a not atypical outcome for a Clark scheme). Clark concludes that the boat’s computer calculated its position as being in the middle of the Sahara—or it may have simply developed a fault in a sensor. But Clark is already on to his next new, new thing: a company called My C.F.O. which will help the mega-rich organize their financial lives—and a bigger boat, half again as big as the Hyperion