Being on-line seemed like a great idea. Until the Internet almost ate the company
Well, here we are again, with a quarterly report from the front lines of office technology as seen by a middle manager at a rapidly growing company.
But it was a close call there for a while.
This time the Internet almost put us out of business -- with, of course, a little help from our founder and CEO.
It all began when he came in excited one day about this stuff his plumber had invented. He wanted to call it Ed the Plumber's Bonding Powder. It was -- and may yet be (if it ever gets out of litigation) -- a fabulous product. Bonding powder seals any kind of joint with no welding or brazing and no toxic glues, plus it sets up under water. See, you want some already.
It was pointed out that Ed the Plumber's Bonding Powder had nothing to do with any of our other products. "But it might be countercyclical to our other divisions, which would stabilize the top line," said Shirley, who has an MBA. Shirley came aboard last year as a consultant to help flatten our hierarchy. She did such a good job that she got hired, but I don't know as what because our hierarchy is now so flat most of us don't have titles.
"Yes, we have to redefine ourselves as a company that sells solutions rather than particular products," said the new head of marketing.
So the CEO told us that in our spare time we should work up a marketing plan for bonding powder.
Bonding powder, it turned out, really was a solution for a lot of problems. We quickly assigned a special division to give it full exposure. Graphics designed an industrial-looking (but very cool) can for it. Marketing set up a two-city test. It was amazing how well the powder did with the venture-capital people -- they were nervous about high tech and bio-tech, but bonding powder was so low tech and obvious, even a chimpanzee could see the appeal. In fact, chimpanzees in suits lent us $15 million for development without even demanding an equity stake.
Dave and Christine, our network administrators, worked up a plan to give the bonding-powder group access to powerful, dynamic document sharing. That meant that when a customer called, the order takers and the kids on the 800 number could pull up on their screens the customer's service-call history, ordering history, and prior-shipment history. Jerry, the chief financial officer, was very excited about that capability because he'd read in a business magazine that that's what all the real growth companies do.
Then Dave and Christine got us an E-mail address on one of the big on-line services so that we could stay in better touch with our core customers.
Pretty soon we were getting 50 E-mail messages a day, and the on-line service gave us our own bulletin board. We had to hire an extra person just to answer the E-mail for bonding powder.
Jerry was a little worried about that. But Dave and Christine pointed out that it was a lot more efficient to handle 50 pieces of E-mail than 50 letters or 50 phone calls. And they programmed the mailer to send out an electronic address book to everyone who sent us E-mail so that people could reach the right person in our shop.
Soon we all were getting 50 E-mail messages a day. Then at a meeting someone noted that more E-mail was coming from suppliers than from customers. Again Jerry was worried, but the CEO said he was reading a book about Japanese management that emphasized how important it is to work closely with suppliers to get just-in-time production.
That's when Dave and Christine said we'd better get our own Internet domain because all the good ones were being taken. Sure enough, "bonding.com" was some surety-bond dealer and "powder.com" was a ski-lodge association. But we did get "bondingpowder.com."
The Web home page -- www.bondingpowder.com -- followed. It was a cute little page with a picture of the label on the can and a simple E-mail form for orders and comments.
The first week the Web page was up, we got 5,000 E-mail messages. Except for people in the test markets, no one had ever heard of bonding powder before, so we got letters for chemical bonding and letters for deep-powder skiing and letters for bondage and discipline and letters for cocaine powder and letters for James Bond and letters for Susan Powter and letters for bonds (as in stocks and bonds) and about 1,000 letters from Internet service pro-viders who wanted to host our page.
So we hired three more people to answer every single piece of E-mail because we had a hit on our hands. And because all God's children got plumbing, no matter what else they might be into.
I still thought we were making good business sense. And even Jerry wasn't worried about hiring the three new people because he was reading a different book about Japanese management that said you have to focus on market share, not on short-term profits.
Well, it turned out that on the Internet a lot of God's children are only 12 years old. When we explained that all we had was Ed the Plumber in a can, they said we'd better let him out.
Obviously we had to get serious, so we hired six new people to redesign our Web site as a series of pages with cool graphical demonstrations of bonding powder in action. That would increase our E-mail's signal-to-noise ratio (that is, how many valid orders we'd get in relation to the number of messages for James Bond) and allow us to take advantage of all the interest we were generating on the Net.
Sure enough, things really took off. We made Best of the Web, Worst of the Web, and Middle of the Web. We linked the awards pages to ours so that we could display their logos. Dave and Christine made a bunch of other linking deals. All the James Bond and bondage-and-discipline and skiing-powder and nose-powder pages wanted to link up to ours because of the humor potential.
"So we'll have to do . . . " Jerry paused for effect, "an initial public offering!" And he started jumping up and down yelling, "We had 200,000 hits last month! We were in NetSearch and NetWatch and E-Surf and KewlKat! If this keeps up, we could be in Wired!"
The whole room went crazy. All at once everyone began babbling about stock options and Internet stocks and how they were going to spend their first $10 million buying an island in Maine with no plumbing and no phones and no computers.
We went with the energy. We did pages on all the mistaken-identity things. We did a chat dungeon with plumbers in sexy leather outfits. We did a James Bond picture game with high-tech killer plumbing gadgets. We had naked plumbers on skis snorting coke. We were denounced by the religious right and defended by the Electronic Frontier Foundation. Golly, we were having fun.
Then one day I happened to go by the mailroom -- the postal mailroom, that is -- and I saw little boxes piled up everywhere. "What's all this?" I asked. Jackie, the mail sorter, looked up from her computer and said, "People are sending back the bonding powder."
Oh, my God. We had offered a double-your-money-back guarantee in the test markets, you see, and someone had put that on the Web page, right out there on the Internet. So all 30 million let-Ed-out-of-the-can kids were ordering a can and sending it back . . . for double their money. We were the world's dumbest chain letter. I found Jerry and told him what was about to happen.
He exclaimed, "That's great! We were at 400,000 hits last week. This could put us over a million! I've got to call Wired!"
"Jerry," I said, "the phones are going to be cut off before Wired calls you back. We've got to tell the CEO."
He was adamant. "No, we don't. The IPO money can pay off the guarantees a dozen times over. We just need the million hits."
Well, you already know the ending. Bonding-powder stock is not the talk of Wall Street, and you have yet to see your first can of product. But the company did not self-destruct.
Amazingly enough, in the end it was the CEO who saved us. Ignoring the Internet mania, he had been shopping for services to assign to the various buttons on our new high-tech phones. One day he talked to a sales executive for a long-distance provider who happened to mention that he was in the middle of a plumbing emergency -- and wham bam!
Now the bonding-powder division, the Web page, and the guarantee claims all belong to the phone company, backed by Japanese bank loans. The Web page reached 2 million hits last month, the phone company has been written up in Wired, and its execs are happy as clams -- or will be as soon as they can settle up with Ed, the plumber, who sued because he wasn't mentioned in the Wired story. They have offered to renounce all rights to bonding powder, the product, as long as they can keep bondingpowder.com.* * *
Moe Meyerson is a manager at a rapidly growing company.