FYI: From the editor

I doubt if there has ever been a time when company builders have confronted a choice starker than the one they face now: they can have a business, or they can have a life. They can't have both. The level of competition is so intense these days that it's just assumed the top people at a company will devote their lives to it. If that's not what they want, says the conventional wisdom, they shouldn't be in business at all.

So what happens when an experienced executive decides to launch a company -- a real company -- with the express goal of creating for himself the kind of life he's always wanted but has never been able to find in business? What happens when he starts making decisions based not just on considerations of growth potential and market positioning but on achieving things like balance, peace of mind, and happiness? Can he pull it off? Can the company be successful without reverting to more conventional ways of operating? And if so, what will it look like? How will it be different from other businesses?

Paul Eichen is determined to have a business and a life.

Those were some of the questions I had when I first heard about Paul Eichen's radical plan for the Rokenbok Toy Co. While the company is still a work in progress, it is already challenging some widely held assumptions about what's required to be successful in the new economy, as you will see from reading this month's cover story by executive editor Michael Hopkins, " The Pursuit of Happiness (in an Internet-Clocked, Overnight-Billionaired, 500-Times-Earnings World)."

The free lunch
There's a refrain we've heard over the years from company founders as diverse as Steve Jobs of Apple Computer, Don Burr of People Express Airlines, and Jack Stack of Springfield ReManufacturing Corp. When asked why they decided to share equity with their employees, they've said it was just common sense: you make more money in the long run by having a small piece of a large pie than by having a large piece of a small pie.

That's a concept many business owners still find hard to swallow. The majority opinion has been that existing shareholders must be picking up the tab by allowing their returns to be reduced through dilution. As Bo Burlingham reports in this issue, a new study provides the first substantial and credible evidence that broad-based stock-option plans appear to pay for themselves. When companies institute them, performance improves enough that the effects of dilution are neutralized, and the existing shareholders wind up doing as well as, or better than, they did before the issuance of the options.

Those findings could well accelerate the already rapid spread of stock options as a form of employee compensation. To get a sense of how far this trend might go, check out this month's Face to Face with Corey Rosen of the National Center for Employee Ownership.

Not so fast, Kowalski
How many times have you heard that speed is everything in the new economy? The Internet is a digital land rush, we are told. And the company that "gits thar fustest with the mostest" always wins.

It's supposedly a new rule of business, and a popular one at that. It's also wrong, and Built to Last coauthor Jim Collins returns this month to demolish it. Not only does he show that an old rule -- best beats first -- is still valid, but he argues that it will eventually prove even more applicable to Internet businesses than to other companies. Why? Because the barriers to entry are so low on the Web. The ultimate E-winners, he suggests, will be the businesses that learn from the mistakes of the first movers -- just as in the old economy.

Fun, fun, fun
I have to admit that strictly as a reader, I've come to look forward to each new installment of Andrew Raskin's E-Diaries. Somehow he manages to put every aspect of Internet life into a wonderfully human, delightfully humorous context.

This month he writes about fun -- specifically, the efforts of Internet businesses to create environments in which people can have some.

It's amazing to me how hard these companies work at fun, but I guess they have no choice. In the Internet space, fun is an employee benefit, more or less like stock options: every business has to offer it. In any case don't miss Raskin's story about his company's encounter with an Uzbekistani hot-dog vendor who served up some advice about viral marketing.

Thinking like Norm
Among Norm Brodsky's many gifts is an ability to take something that seems hopelessly complex and make it breathtakingly clear. He does just that in this month's Street Smarts, in which he addresses the period of confusion that often characterizes the earliest stage of start-up activity.

I myself find it energizing, even inspiring, to observe his thought process in this type of situation. While the rest of us may never achieve his level of analytical mastery, we can at least appreciate the discipline it's based on -- a discipline that we can all develop to some degree if we try.

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