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The
Dinner Club: How the Masters of the Internet Universe Rode the Rise and Fall
of the Greatest Boom in History by Shannon Henry Rating: ••• (Recommended) |
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Click on title or picture to buy from amazon.com |
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Fly on the Wall Shannon Henry received a great opportunity
when she was permitted to sit as a fly on the wall at the monthly dinner of
an investment club in Washington, D. C. attended by some of the key East
Coast players in technology. The results of her experience appear in a new
book, The
Dinner Club. Shannon captures the mood shifts of these mega-players,
especially as boom turns to bust for them personally and for their companies.
Here’s an excerpt of how Michael Saylor, of MicroStrategy handled his
downfall, from Chapter 8, “MicroTragedy” (pp. 167-8): Saylor is furious at PricewaterhouseCoopers, saying
that even though he runs the company, he holds the firm responsible. He says
that as a first-time CEO, he did not understand the fine print and expected
that the people who he hired to worry about it would take care of it;
"If you retain an auditor you have the right, at least I believe you
have the right, to expect them to take responsibility for accounting
technicalities," said Saylor. "You pay them, right?" "They misaccounted and they never fessed up,
they never so much as said they're sorry, they just did it," says
Saylor. "Why wouldn't I blame them? If you started a company and you
trusted your auditors to help you manage this stuff and then the books blew
up, and you found yourself being attacked left and right by every single
person in the world, then [you have] your life taken apart while your auditor
basically backed into a corner and scampered off to a vacation in Tahiti and took
no responsibility, wouldn't you feel a bit mistreated?" Saylor compares the situation to a car manufacturer
who builds an auto, puts an engine made by another company in the car, and
when the car blows up because of the engine, the manufacturer is blamed.
"I managed to get myself responsible for all of this when in fact I'm
the one who's least qualified to make those decisions. I didn't make any of
them. All those decisions were made by auditors." Regardless
of who was to blame, it was clear the restatements were affecting the bottom
line. In August of 2000, Microstrategy laid off 234 employees, about 10
percent of its staff. In addition to the pink slip and the severance package,
each worker received $10,000 in Microstrategy stock from Saylor's own holdings.
The month before, the company had to tell more than 200 new college graduates
that jobs they had been offered were no longer available. In October of 2000, Microstrategy executives agreed
to pay $10 million instock as part of a shareholder lawsuit settlement. Then
in December, Saylor and two other top executives at the company each agreed
to pay SEC fines of $350,000 to settle the accounting fraud case. None of
them admitted any wrongdoing. Although the penalties don't take a huge chunk
out of Saylor's still-estimable fortune, the SEC said these were the largest
fines ever levied in such a case. If
Saylor were just completely obnoxious or rude, he would be easier to
understand. But he has friends—not just new ones who rode on his train on the
way up, but ones who've known him since high school and college—who say
really, he's just a guy who wants to make a difference. He's just got an
awkward way of acting that's not socially acceptable. Julie Holdren, founder
of software firm the Olympus Group, has known Saylor for years. Her husband
and Saylor were fraternity brother at the Massachusetts Institute of
Technology. Holdren has done business deals with Saylor and gone to movies
with him. She says he's brilliant and kind and incredibly misunderstood. Conventional
people will never get Mike, she says. On the other side, however, are those
who have written him off. Morino has heard Saylor on the humility campaign
these days, and he doesn't buy it. "Do you know what Golda Meir
said?" asks Morino. "Don't be humible. You were never that great." There were other falls among the Capital
Investors, but Saylor's was the hardest. Saylor also learned how his friends
in the club would support or ignore him. Some members publicly supported him,
especially Russ Ramsey and John Sidgmore. On the other hand, Morino,
Fernandez, and Gorog tended to distance themselves. "It's the price you
pay for playing the role,"says Fernandez about Saylor's misfortune. Following the company's problems, Saylor still
showed up to almost every Capital Investors dinner, the most vocal member.
Saylor says when the restatement occurred, the Washington technology
community split in half, for him or against him. "The day before it
happened, everybody loved me," he says. "And the day after..."
It hit him how things had changed when a news story criticized him for rudely
disappearing for ten minutes during a philanthropic event. He was in the
bathroom. "Getting up and going to the bathroom if
everybody loves you is a non-issue," Saylor says. Shannon Henry had a great opportunity in
being able to get on the inside, and reading about the players and dinners
was interesting. The moguls were ruthless in frilling the executives who came
to make presentations at the dinners looking for money. Despite the knowledge
and expertise around the table, the investments haven’t paid off. Readers hear stories, anecdotes, and get a
flavor about many of the characters who participated. The
Dinner Club isn’t great writing, and leaves readers with little more than
a dozen stories of life among some rich, white guys. If that’s what you’re
prepared for, proceed. If you expect insight into the time and the issues,
you won’t find much here. Steve Hopkins, February 28, 2003 |
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ã 2003 Hopkins and Company, LLC The
recommendation rating for this book appeared in the March 2003
issue of Executive
Times URL
for this review: http://www.hopkinsandcompany.com/Books/The
Dinner Club.htm For
Reprint Permission, Contact: Hopkins
& Company, LLC • 723 North Kenilworth Avenue • Oak Park, IL 60302 E-mail: books@hopkinsandcompany.com |
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