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- Virginia
lacks planning to deal with “Big Boxes”
- Virginia
Business story misrepresents
farmers’ plight
High tech’s
supper club
by
Christopher J. Bright
The
Dinner Club; How the Masters of the Internet Universe
Rode the Rise and Fall of the Greatest Boom in History
Shannon Henry
The Free Press, 2002
288 pages. $26
The
Dinner Club is an entertaining eyewitness account of
an informal group of self-made Washington-area business
moguls who arguably did more than anyone else to create
Virginia’s technology boom in the 1990s. Dubbed
the Capital Investors, they gathered for informal monthly
dinners to socialize and dabble in angel investments
in Internet companies. Most, although not all, had made
millions by founding, running, or financing computing
or telecommunications businesses.
Veteran
Washington Post technology reporter Shannon Henry gained
entree to the club’s deliberations for one year
starting in 1999. Her fly-on-the-wall perspective details
a raucous time when personal wealth grew tremendously
and then peaked, a gravity-defying market tanked, investments
soured and participants sought other outlets for their
energies.
Henry
shares much about the personalities and perspectives
of key individuals who were very visible during the
e-business boom, including some who have been (and remain)
influential in Virginia. Although the book is putatively
about the 26 self-selected male club members —
Henry discusses briefly the absence of women —
she targets a select few: AOL’s Jim Kimsey, MicroStrategy
CEO Michael Saylor, software leader and entrepreneur
booster Mario Morino, Proxicom founder Raul Fernandez,
investment banker Russ Ramsey and cellular telephone
financier-cum-governor Mark Warner. Also mentioned are
Steve Case and Ted Leonsis of AOL, Capital One’s
Nigel Morris, John Sidgmore of WorldCom, Teligent’s
Alex Mandl and LCC founder Raj Singh.
It’s
an intelligent and ambitious bunch, understandably anxious
about the performance of their own companies and the
economy’s trajectory. They were rightly concerned;
many of their businesses have since gone bust or are
struggling. Although Warner seems uniformly pleasant
and earnest, others are portrayed as boorish, arrogant,
egotistical and extravagant. Many have private planes
and limousines. At least one Capital Investor, CyberCash
founder Bill Melton, tries to spend three months in
Paris every year. Another, Mandl, collects eighteenth-century
art.
Or,
consider financier Kimsey, who fancies himself as an
international statesman. He has arranged unsolicited
meetings with Fidel Castro, Colombian guerillas and
the president of Indonesia, based apparently on his
role in creating AOL. A big-spender, he leaves a $90
tip for a $10 bar bill in Cartagena. Ramsey characterizes
the Dinner Club as “a Friday-night frat house,”
an apt description since Case throws dinner rolls and
Saylor introduces a 29-year-old female software CEO
to the group as a “girl.”
With
its five-star restaurants and filet mignon, this special
fraternity is primarily a social gathering for rich
peers rather than a way to fund new businesses. Since
none of its 18 start-ups has yet earned them any money
— some have ceased to exist — the Capital
Investors apparently have met this expectation. By considering
the group’s performance, perhaps it’s easier
to comprehend the crash of Virginia’s Internet
and telecom sectors. If the high-powered Dinner Club
members didn’t see shortcomings in these industries,
it’s not surprising that few others did.
Even
so, the “dot-coms” and preposterous business
plans of the late 1990s tech bubble weren’t Virginia’s
first go-around with technology firms. Since the early
1960s Northern Virginia has been home to software firms
and IT companies that serviced the federal government.
By the 1990s, the region had many tech jobs and a strong
local appreciation for technology business. It had become
a national destination for tech firms.
Henry
doesn’t seem to understand these points. The more
recent Internet start-ups did not create this environment,
but merely supplemented it. With today’s downturn,
ironically, old-line government contractors are once
again saving the day, especially in homeland defense.
Henry also consistently confuses and conflates Washington,
D.C., with the region. This shortcoming, however, is
a minor flaw in Henry’s otherwise fine book.
The
author was Assistant Secretary of Commerce and Trade
in Gov. George Allen’s administration. He is now
a doctoral candidate at George Washington University.
Virginia
Business - January 2003
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