The 3rd In Search of Stupidity is finally here

After 20 years of waiting, the classic is back!

In Search Of Stupidity Features*

A QUICK TOUR OF new excerpts FROM THE Third Edition

Welcome to the third edition of In Search of Stupidity: Over 40 Years of High-Tech Marketing Disasters. (As opposed to 20.) When I wrote the first edition of the book, one of my chief motives was revenge against In Search of Excellence by Tom Peters and Robert Waterman and its successors. Like many others in high-tech, I’d been forced to read the books and attend the seminars that preached the cult of excellence while most of the firms profiled in Excellence crashed and burned. I decided that since I was never going to reclaim all those misspent hours, I might as well have some fun with the experience.

To my great satisfaction, In Search of Stupidity has transcended my petty resentments. Since the release of the first edition in 2002, In Search of Stupidity has become a best-selling worldwide business classic, with editions having been released in several languages, including Chinese, German, Italian, Hebrew, Polish, Korean, and Japanese. As one commentator remarked, “In Search of Stupidity is high-tech’s version of Charles Mackay’s Extraordinary Popular Delusions and the Madness of Crowds, only more relevant.” (By the way, if you’re interested in reading the prefaces to the first and second editions, the forewords, as well as other material that was removed from this edition in the interest of brevity, they’re available online at www.softletter.com.)

That’s high praise, but since the release of the second edition in 2006, high-tech has undergone massive change. Mackay had the luxury of writing about stupid events and thinking in an era when societal and technological evolution took decades and even centuries. I don’t have that luxury; in the 21st century, 14 years is an eternity. We have a lot to review!

Before I begin, I want to reassure you that the primary mission of this book remains unchanged. Within this third edition you’ll find a carefully curated collection of only the best of the worst and the newest of the stupid (and all of them completely avoidable). Similar to Dante’s Inferno, this book is designed to embark you on a grim journey to the hot stygian depths of Marketing Hell, where your soul will be riven by scenes of woe and suffering. There’s Steve Ballmer lashed to a rock for eternity as hordes of Windows 8 users devour his liver while screaming “Where’s the Start Button!” Next to him we can see Jeff Bezos endlessly stacking unsold pallets of Fire Phones in a warehouse that always adds a new level just when it seems the building is full. Not far away, Sundar Pinchai is strapped to a chair and forced to explain forever (or until the Department of Justice finishes its anti-trust probe, whichever comes first) how Google search algorithms work to zombie-eyed members of Congress who immediately forget everything they’ve just been told.

But not to worry. As with Dante and Virgil, I’m here to guide you safely around the horrors and tragedies that inhabit this place. Let’s head past the crackling flames and leave the horrid screams and moans of despair behind us as we ascend to the world of light and sanity. We need to get cracking on catching up, but we’ll be returning soon to learn more.

The SaaS Revolution

  • When I wrote the first edition of In Search of Stupidity, people did the following:
  • Trudged out to their mailboxes or driveways to pick up their daily newspaper.
  • Unloaded mailboxes stuffed with flyers and advertisements.
    Sent business documents via fax.
  • Listened to dial tones on their land line phones before dialing out.
  • Went to bars to meet dates or mates.
  • Bought paper books, either hard-covered or paperbacks.
  • Wore Japanese and Swiss wristwatches all the time.
  • Read magazines such as Time, Newsweek, PC World and many others.
  • Navigated to new locations via paper maps in their laps while driving.
  • Used dial-up modems which made strange squealing sounds before logging into AOL, Compuserve, Prodigy, etc.
  • Installed software from CDs/DVDs packed in boxes.
  • Listened to music on CDs.
  • Carried Sony Walkmans to the gym.
  • Took pictures cameras loaded with Kodachrome (film).
  • Went to Blockbuster to rent movies.
  • Watched TV shows at set times on set days.

In 2020, people do the following:

  • Abandon newspapers.
  • Wonder when the Post Office will shut down as paper mail fades away.
  • Sell their fax machines at yard sales.
  • Cancel their landline service.
  • Watch TV and movies whenever they want.
  • Meet dates and mates via Match.com, Tindr, and other online dating services.
  • Don’t wear Japanese and Swiss wristwatches very much.
  • Buy increasing numbers of digital and audio books to read and listen to on smartphones and tablets.
  • What’s a Sony Walkman?
  • What’s film?
  • What’s AOL?
  • What’s Blockbuster?

ZPEs Rising

The SaaS Revolution also changed the way high-tech funded new companies. In the 1980s and 90s, new ventures were expected to turn profitable within 3-7 years after the first major investments, but Amazon upended this model. Founded in 1994, Amazon went public in 1997 and promptly began losing money hand over fist. In the first and second editions of Stupidity, I had a lot of fun at the company’s expense by marveling at the streams of red ink that puddled around Amazon’s financial statements. At a certain point, I began to think of the company as a ZPE, a zero profit enterprise designed to never actually make money.

But Amazon and CEO Jeff Bezos appear to have had the last laugh. In 2017, the company finally seemed to reach the shores of profitability that had seemed so distant for the first 24 years of its existence, posting a solid GAAP net profit of $3 billion on total revenues of $177.87 billion. Though, this being Amazon, there were some caveats. Its international operations lost $3 billion during this period, counteracting the $2.8 billion earned by its North American business. It was Amazon’s Web Services (AWS) business unit that provided the $4.3 billion in operating profits that pushed Amazon solidly into the black. It was time to take ZPEs seriously.

The model is built around the concept that a startup should use investment money to focus on building revenues and market share while eschewing “premature” drives to profitability. High financial losses are acceptable as long as revenues continue to grow and the company maintains positive cash flow. The bet being placed is that driven by visions of the radiant future, the market will drive the company’s stock price higher, helping insure the ZPE can return to the public markets for more cash, while monopolies and large chunks of market share will eventually deliver significant profits.

Battered Bricks

It wasn’t just the software industry that underwent disruption. So did shopping. As it grew, Amazon became increasingly more expert in using the data it collected to understand what, when, why, and how much you wanted to pay for items and services, and it only became better as it collected more information. It also enabled shoppers to comparison shop across a huge virtual inventory of offerings. Many traditional stores couldn’t match these abilities and succumbed to Amazon’s data dragons. One-time giant Sears, the 19th century’s equivalent of Amazon, was on the brink of extinction in 2021. Dozens of other retail powers preceded it, including Toys R Us, Payless Shoes, CompUSA, Sports Authority, and many, many more. The Big Data claws swung wide and sharp.

The shopping malls weren’t spared. By 2013, ecommerce had brought large mall growth in the U.S. to a stop, then began to whittle them down. In 2017, there were approximately 1,200 major malls in the U.S. By 2023, it’s estimated 50% of them will be gone. Small town and villages weren’t spared from the winnowing, as they discovered that Amazon Prime and best price guarantees were able to empty out an adorable village center of its Shoppes and Ye Oldes as efficiently as Walmart ever had.

This isn’t quite as devastating as it sounds. At the beginning of the 21st century, many retail industry observers thought too many malls were being built in a saturated market. The dot.com collapse put off the reckoning and the malls continued to sprout, but the current contraction was inevitable. Nonetheless, brick and mortar stores still outstrip ecommerce sales by a factor of 10 to 1, and retail is adapting under the threat of Amazon and changes in generational shopping habits, as we’ll discuss in “Purple Haze All Through My Brain.”

Other industries are continuing to suffer disruption at the hands of SaaS. The taxi business, dining, couponing, and hundreds of others are being displaced and reshaped by the Revolution. It’s an overused phrase, but SaaS did represent the most massive paradigm shift computing had witnessed since the advent of personal and “microcomputing” in the mid-1970s.

Amazon Ascendant

By 2017, Amazon had also achieved something unique in contrast to its competition; the company has become a core technology provider. Powerful resellers such as Macy’s and Walmart have over the decades been major consumers of technology, particularly in the area of supply chain management, the means by which stores regulate the flow of goods and services to and from their warehouses and stores.

But Amazon, first with the 2005 release of Amazon Web Services (AWS), a massive web hosting and development platform, the Kindle in 2007, the Fire Tablet in 2011, and the Alexa/Echo smart home system in 2014, became a company that could control not only its own technology destiny but the fate of other firms. (No, I haven’t forgotten the Fire Phone. We’ll be discussing it in detail later in the book.) AWS, for example, caught high-tech moguls such as Microsoft, IBM, Google, Oracle, and others napping and today all are scrambling wildly to catch up to a “bookseller” that dominates a strategic industry sector. As of 2018, 65% of SaaS startups used AWS to launch their systems, with Microsoft trailing in second place at a distant 15%. By 2022, Amazon's lead over Microsoft had shrunk to 35% to 25%, but this still represented quite a comedown for Redmond.

Amazon’s first test of the ZPE ability to create monopolies began with its pursuit of Zappos, an online reseller of shoes and relate apparel. The brainchild of Tony Hsieh, he and co-founder Alfred Lin founded the company in 1999 and nursed it through the dark days of the dot.com meltdown, growing sales from $8.6 million in 2001 to $370 million by 2005.

In 2005, Bezos invited Hsieh and his upper management to a meeting in Las Vegas where he told them he wanted to buy Zappos. He made a preliminary offer Hsieh decided he could refuse, and the two parted ways. After the rebuff, Bezos instructed Amazon to build a competing website called Endless. The effort cost $30 million and was plagued by the fact that many of the major shoe vendors such as Nike had little desire to see their premium brands tarnished by Amazon’s low-price model.

Nonetheless, the site opened, powered by ZPE cash, and offered free overnight shipping and free returns on purchases, guaranteeing that Endless would run at a loss from day one. Zappos, which was closing in on profitability, was forced to match Endless’ free shipping and returns policy, cutting sharply into its bottom line. Making it doubly painful was the fact that Endless was not suffering commensurate damage because unlike Zappos, it wasn’t selling enough shoes for free shipping to have much financial impact. Amazon then turned up the pressure by offering a $5 coupon on any Endless purchase, and Zappos’ finances came under increasing pressure.

Despite the shade Amazon was directing at the company, Zappos continued to grow, though profitability began to recede in the distance, and sales reached $1 billion in 2008. Then the Great Recession hit, and Zappos, weakened by the double whammy of Amazon’s below cost pricing tactics and a sharp pull back in consumer spending, came to the table and agreed to be acquired by Amazon in 2009. The company today operates as an Amazon subsidiary and is profitable. Bezos then applied the lessons he’d learned with Zappos to devour Quidsi, owner of the very popular Diapers.com, to then purchase Goodreads, Shopbop, and many others.

Bezos had shown the world that the ZPE model was no theory but a working reality. In 2014, he decided to apply what he had learned to a far more significant market. We’ll be reading about his further ZPE adventures in “Burning Down House.”

In the meantime, success always engenders copycats. By 2019, early ZPE success had bred herds of “unicorns,” companies that sported billion-dollar valuations fueled by massive inflows of cash from investors who were counting on radiant futures and monopolies to justify their gambles.

One of the most interesting sectors is the ride sharing industry, dominated by Uber and Lyft. The taxi business has always been something of a racket, with cities and municipalities extorting extra revenues from their citizens via a blizzard of regulations, fees, surcharges, and blatant anti-competitive financial manipulation that boost the cost of cab rides. Before the appearance of the rideshare firms, the market dealt with the problem via “gypsy cabs,” people who ignored all the rules and regulations and just started driving around and picking up fares. Unlicensed taxis were always a dicey proposition from both the perspective of drivers and passengers, and ridesharing offered a compelling alternative. Now, instead of Cabbie Roulette, you could summon a driver who’d been vetted and was part of a network that enabled both rogue drivers and passengers to be identified quickly, which put a damper on mischief. Even better, rideshare costs were often substantially less than those of licensed cabbies.

The concept was a hit with most people, though not with local governments, which didn’t appreciate their profitable taxi revenue scams being stripped away. Soon, millions of people were using the systems worldwide, and both Uber and Lfyt went galloping over to devour generous bales of unicorn fodder brought to them by free-flowing streams of ZPE investment dollars.

On the face of it, this seems like an Age of Cloud (or SaaS) fairy tale. But there is a large, scary Maleficent in the story and that is that Uber and Lyft are inherently unprofitable. There are very fixed costs associated with the taxi business, such as cost of fuel, maintenance, repair work, and the inevitable decline of a car into decrepitude. Driving a cab has never been a very profitable business for cabbies, regardless of whether you’re a licensed or gypsy driver. Uber and Lyft make their money by charging their “contractors” a membership for appearing in their rideshare network, which provides Uber drivers their ridership as well as establishing what the fares will be. Technically, the drivers are “independent” contractors whose earnings are derived from what’s leftover of their fare money after their car costs and rideshare fees are subtracted. If a Lyft driver pays too much in fees, they begin to abandon the network as they discover they’re working for nothing. But take less of a cut of the driver’s earnings and the networks run at a loss. Making things worse is that California, the most “woke” and socialist state in the union, is busy passing regulations that will force the company to treat its drivers as employees, not contractors, which will raise expenses considerably. (If you’re considering starting a firm with a similar business model, California may be a place you want to steer clear of.)

The problem came into sharper focus when Lyft went public in March of 2019. The company had lost $700 million in 2017 and $1 billion in 2018, but the prospectus provided no roadmap to how Lyft intended to someday make money. Nonetheless, the IPO churned ahead, and Lyft went public with an initial market valuation of $22.2 billion. It seemed ZPEs live a charmed life.

Nonetheless, there’s a certain foamy feel to all of this. Neither Lyft nor Uber, which went public shortly after Lyft, can quite explain away the grim economics of ridesharing. The path to profitability seems cloudy and obscure. Are we seeing the development of Dot.com Bubble II? Many people are predicting just that.

Maybe. But there is a path to profitability for the ridesharing industry. That path consists of plucking humans out of taxis and leaving the driving to Johnny Robot. With humans no longer behind the wheels, Uber and Lyft will transform from margin-squeezed question marks into money machines. The question becomes “How quickly can the companies can push driverless car technology to widespread adoption?” Also, we humans may prove reluctant to turn over the wheel to our robot overlords.

Another question that needs to be considered is that while Uber and Lyft may fail financially, will the model? Are hundreds of millions of people going to go back to the old, scam-ridden, municipal taxi monopolies with their “medallions,” corruption, and ride discrimination and shortages?

The Green Reign Ends

The second edition of Stupidity ends with Microsoft (Great Green) firmly in control of high-tech, having overthrown IBM’s (Big Blue) computing empire of 39 years2 and crushed all other potential claimants to the throne. In 2006, Microsoft controlled the market for desktop and network operating systems, desktop applications, development tools, had cracked into the game console business, etc. To make things even more wonderful, by 2002, 96% of web users used Microsoft’s Internet Explorer (IE) browser. Like IBM before it, Microsoft now set the standards. To many, it wasn’t a question of whether Microsoft would monopolize high-tech in the future, only what crumbs it would leave for the rest of the industry’s starvelings.

Today, IE is moribund. Its successor, Edge, possesses a nominal market share that hovers from 1% to 3%, depending on whether anyone is bothering to count. To make it worse, Microsoft was forced to abandon its proprietary browser technology and build its new browsers on top of Google’s open source chromium software. Microsoft still sets the standard for desktop and laptop computers, but those are yesterday’s platforms. Smartphones, tablets, and SaaS are where the action is in personal computing and Microsoft sets no standards in any of these. Microsoft is still powerful and profitable, but it no longer strikes industry-wide fear. Computing’s throne is empty. The upcoming war over control of the developing device independent software workspace platform may determine who next gets to wear the imperial purple of industry dominance. We’ll be diving more into this developing movement in the section of the book that deals with the ISOS Disruption Model.

Steve Jobs Disease Breaks Out

In 2011, Steve Jobs passed away from pancreatic cancer. His career was colorful, convoluted, and loaded with controversy. But no one can deny he was directly responsible for high-tech’s most stunning pivot and reversal of fortune. From 1997-2011, Jobs transformed Apple from a has-been to the world’s number one brand and the first to reach a market capitalization of $1 trillion dollars.

Not soon after his death, Steve Jobs Disease broke out across high-tech. Sufferers could be identified by their tendency to wear monochromatic clothing, repeat Steve Jobs quotes ad nauseam, behave badly towards strangers and innocent bystanders, and endlessly proclaim they were disrupting the world. The infected have included Jeff Bezos, Travis Kalanick, Seth Bannon, and most famously, Elizabeth Holmes. We’ll be examining the tragic parameters of this insidious affliction later in the “Ripping PR Yarns” and “Brands for the Burning” chapters.

The Coming of the Cloud

In 2009, while hosting Softletter’s SaaS University conference in Chicago, I heard a phrase that chilled my blood. That phrase was “Cloud Computing.” What chilled me wasn’t the phrase itself, but the prospect of falling into buzzword hell. Had “Software as a Service” expired as an acceptable high-tech descriptive term? Was the website we’d built to support the conference series, www.saasuniversity.com, obsolete? If so, I was in a bit of trouble, because all our collateral, presentation schedules, printed CDs, etc. used the phrase SaaS.

I sweated it out a bit until some quick research revealed that the phrase seems to have a dual origin. One parent is Grid Computing, which in 2007–2008 was quite the hot term. Grid computing popularized the idea of computing power becoming commoditized and consumed in much the same way as power and telecommunications. It became popular to describe grids as ”clouds of virtualized servers,” an appropriate and descriptive phrase that caught the fancy of many; unfortunately for proponents of grids, the “cloud” devoured its parent in much the same fashion as the Greek god Zeus snacked on his progenitor, Cronus.

The Cloud’s “mother” may be Eric Schmidt, then CEO of Google, who used the term “cloud computing” in reference to SaaS at an SEO conference in 2006. A few weeks later, Amazon debuted its S3 service and used the word “cloud” in its marketing literature to help describe the new service. Both parents’ DNA strands intertwined over the next several years and the cloud and “cloud computing” caught fire.

Soon, everyone was talking about the “Cloud” and no one quite knew what anyone was talking about (a problem that persists to this day). This is because the term “Cloud” was not accompanied by the release of any new technology or products to help give the new buzz phrase any tangible reality to hang onto. This is somewhat unusual in high tech; normally, when a buzzword is introduced into the general computing lexicon it is preceded by some actual advance in technology or products. When relational database systems were introduced into the PC marketplace in the 1980s, you could buy one. When the internet became widely accessible to the public in the 90s, you could surf it. But none of this is true of the cloud. Virtualization, SaaS, IaaS (Infrastructure as a Service, otherwise known as hosting), PaaS (Platform as a Service, otherwise known as programming), all technologies that are part of “cloud computing,” predate the buzz phrase by years. “Cloud computing” was simply a synonym for “internet computing,” a successful marketing gambit adopted by a media eager to repackage something that was old wine into a shiny new bottle that could be resold all over again.

If you have your doubts, this quick test will convince you. Tell someone you’ve just met that you work for an internet company and then ask them to guess what you do. (When they look at you oddly, just tell them you’re conducting an impromptu marketing research study. Trust me, it’s a great social ice breaker.)

They won’t have a clue, of course. If they’re up on high-tech terms and categories, they’ll guess that maybe you provide hosting, or work for a SaaS firm, perhaps develop web-based or smartphone apps. Now, repeat the test, only this time use the phrase “cloud-computing.” The results will be identical.

Now, I completely understand if you believe your company needs to undergo a thorough “cloud wash.“ Times change, new buzzwords appear, yesterday’s hot terms retire to the Home for Old Acronyms. It’s probably a mistake to even bring up AOL when in the company of millennials; they hate to be reminded that the world existed before they did. But I thought it useful to note you don’t have to learn anything new in this respect. Instead, spend your time trying to figure out blockchain.

High-Tech Gets Political

I first began planning to write the third edition of Stupidity in the 2014-2015 timeframe, but life intervened and I began work just in time to observe high-tech enter politics. This is an act of fascinating and monumental stupidity, and one that will have many repercussions and long-term consequences for the industry. The reason is simple—since the establishment of the Whig Party in 1834, supplanted in 1860 by the Republican Party, the U.S. has operated on a two-party system. To support one party at the expense of the other means to anger about half the country, never a smart marketing move.

While a large majority of high-tech firms favor Democratic Party and progressive ideas, prior to the unexpected outcome of the 2016 presidential election, most companies in the industry stayed clear of politics. The class of most interest was the check writing one, and everyone’s favorite color was green. This changed in 2017, with the major social networks, Apple, Google, and others jumping into “social justice,” “intersectionality” (an obnoxious concept that assigns extra rights to groups based on their ethnic background and other factors and was earlier referred to as “racism”) and support for the country’s left wing. As was completely predictable, the right wing increasingly loathes Google, the social networks, and an expanding list of targets and deadly financial and social counterforces have been activated. The left wing is not in the least bit grateful for the help and wants to break up these massive sources of power and influence while diverting many of their dollars to the causes of their choice. None of this will end well for the companies involved, as we’ll discuss in “The Social Ministries.”

Springtime for Microsoft (and Ireland)!

As this third edition of Stupidity was being prepared, the 330+ million citizens of the United States were sheltering in the safety of their homes. In mid-March, 2020, at the orders of the government, the U.S. economy ground to a halt as stores closed, malls shut, bars shuttered, restaurants stopped slinging hash, airplanes were grounded, cruise ships tied up at their docks, major sports events were cancelled, toilet paper disappeared, Broadway went dark, and Moms ‘n’ Dads nationwide prepared to home school their offspring for the foreseeable future, to the dismay of both parents and kids.

All this gaiety came compliments of the CCP (Chinese Communist Party), the People’s Republic of China and the Wuhan corona virus. The bug originated in one of China’s infamous “wet markets,” outdoor slaughter houses where various domestic, rare, and revolting (for consumption) animals such as rats, snakes, civet cats and so on, are all slaughtered side by side for consumption.3 Previously, these markets had been responsible for or contributed to the spread of other fun plagues such as SARS (severe acute respiratory disease: death toll 774), Hong Kong flu (33, 800 killed), Asian flu (1 to 2 million deceased) and so on. Wuhan seized center stage from these “golden oldies” when, according to the prevailing theory, in November of 2019 a hungry Chinese slurped down some yummy bat soup (yes, this is a thing and it’s as disgusting to look at as it sounds), developed a fever and severe respiratory distress from the sick animal, and promptly begin infecting everyone around him (or her) with Coldzilla. This was a mutated form of the cold (corona) virus, which everyone on the planet has been infected with dozens of time and had previously been known as “Mr. Sniffles” until it went kaiju with the assistance of the ChiComs and their Maximum Leader Winnie the Flu.4

The CCP first became aware of the outbreak of the disease on December 12th. The information came from a CCTV report of a new viral outbreak in Wuhan, China. On December 26th, a Chinese lab reported that the new disease resembled the deadly SARS virus. On December 30th, Chinese ophthalmologist Dr. Li Wenliang posted a warning to his WeChat alumni group that he was treating a group of patients in his department that in addition to vision issues, also seemed to be suffering from SARs.

The CCP in classic communist fashion, promptly arrested the doctors who’d participated in the WeChat conversation. Dr. Li, was “reprimanded” for his statements and wrote, entirely of his own free will, a statement repudiating his earlier observations and apologizing for causing a big fuss. The Chinese government also destroyed early genetic samples of the virus and released a series of lies about the transmissibility of the bug from person to person.

In the meantime, the virus, which can’t join the CCP because it’s too small to carry a membership card, went on furiously reproducing and infecting more and more people, who began to die in increasing numbers. Further proving the nostrum that no good deed goes unpunished (particularly under communism), Dr. Li died from Wuhan virus. Not content with his death, the CCP began scrubbing references to him and his early warnings about was rapidly turning into a pandemic from the firewalled Chinese version of the internet. Doubling down on their criminal stupidity, the CCP also disappeared Dr. Ai Fen, head of the ER at Wuhan Central Hospital after she also warned about Coldzilla’s growing threat.

By the beginning of March, Coldzilla was rampaging worldwide and people were dying in increasing numbers. Parts of northern Italy, where the local governments and businesses had bought heavily into China’s “One Road, One Belt” economic initiative and had subsequently enjoyed large numbers of infected Chinese circulating through their cities and towns, began to resemble medieval woodcuts of plague victims being carried off by the Black Death.

While all this was going on, a new and uber-cool social media app, TikTok, grew in popularity. Its mission? Help bored American millennials and gen z’s pass the time, which it seemed to do very well.

What is TikTok? Investopedia says it’s:

…a popular social media app that allows users to watch, create, and share 15-second videos shot on cellphones.

Digitaltrends.com, a website focused on all things new and trendy, giggled:

The latest video craze is TikTok, a free app for iOS and Android that specializes in 15-second, musically oriented videos. Previously known as Musical.ly, this lip-syncing music app’s updated name is infinitely more catchy.

Ireland certainly seemed to agree! On March 19th in the Irish Mirror, writer Cormac O’Shea wrote a soul-tingling story of how TikTok was becoming more popular in the Emerald Isle as the sons and daughters of Eire used the system to video themselves Riverdancing to the point of exhaustion so as to preserve social distance and preclude any treks to the nearest pub. There was also a side piece about a leprechaun-cute pensioner who was stealing online hearts with his recipe clips. According to the article, more than 90,000 Irish were using TikTok a day and the numbers were steadily increasing in Ireland, Europe, and the U.S. (this was true).

There were some facts about TikTok missing from the story. While the article did mention that TikTok is owned by ByteDance, a company with its H.Q. in China, it failed to tell its readers that:

Under PRC law, all social networks must provide complete personal information about their subscribers and their usage of their systems to China’s country’s security and police departments on demand. And so do any Chinese employees of that company. In both cases, the PRC can require under fear of punishment (the use of the word “law” doesn’t really apply to Communist China) that neither the company nor its employees disclose they’ve been asked by the PRC to hand over private data and information.
This law had allowed the Chinese authorities to quickly identify Dr. Li and his colleagues via their use of a WeChat group and crush their attempt to warn people about the spread of the virus. Several members of the group promptly vanished down the memory hole.
TikTok regularly purges its system of any videos that are critical of China, mention Tiananmen Square, film the protests in Hong Kong, and on and on. You won’t find many 15-second tributes to Dr. Li’s death-bed statement that “I think a healthy society should not have just one voice” on the system. No 15-second dance memorials to people coughing up their lungs in China from COVID-19, either.
That all PRC social apps are integrated into the CCP’s insidious “social credit system” that places millions of Chinese into a virtual concentration camp. In other words, if you live in China and post up too many “funny” videos that fail to rock the PRC’s funny bone, you’ll find your access to subways, travel, loan, nice restaurants, and much more disappear. You’ll read more about this system and Google’s contribution to it later in the book.
In light of all this, it seemed rather odd that many thousands of Irish were eager to help fund the virtual spotlights and barbwire of China’s virtual version of Britain’s infamous Maze prison. For businesses, it was also exciting to contemplate that while merry pranksters were filming satiric vignettes of life in your particular cube farm or open floor plan, sharp-eyed PRC intelligence operatives would be scanning and analyzing all that video footage for insights into your technology and business plans. What could possibly go wrong?

It became even more wonderful for TikTok aficionados when a video was leaked online of the PRC marching members of the Uyghur minority onto a series of concentration-camp-bound trains a la the Third Reich herding Jews into box cars whose destiny was Dachau, Auschwitz, and similar locales. (The video apparently wasn’t very funny, as it didn’t appear on TikTok.) The Uyghurs are ethnically of Mongolian-Turkish descent, mainly Muslim, and most of them live in China’s western Xinjiang province. The Uyghurs, along with many other ethnic groups under the thumb of China (most notably the Tibetans), very much want the Chinese to grant them independence from Beijing and leave their land; by contrast, the Chinese very much want there to be less Uyghurs. To achieve this goal, the PRC has established a typical Communist gulag which currently hosts about 1 million Uyghurs whose women are subjected to forced abortions and sterilization and the men to forced “reeducation,” plenty of beatings, and generous servings of terror, intimidation, and indoctrination. The Chinese, always an entrepreneurial lot, have also set up a little side hustle selling Uyghur women’s hair for wigs and hair pieces. Then it turned out that to help locate Uyghurs to participate in the PRC’s mass vacay program, TikTok data was used to uncover likely candidates.5

In August of 2020, the 45th President of the United States, greatly exasperated by the impact the Wuhan plague and the destruction of democracy in Hong Kong (another place where everyone wished the PRC would leave) was having on his election campaign, announced he was going to ban TikTok in the U.S. At that point, it would seem the smart thing to do for any employer was ban the use on their premises of any smartphone containing not only TikTok, but also WeChat, Weibo, and any other Chinese regime app (“CRapp”), an action that would lead to the demise of these products in the U.S. market, and probably others as well.

Across the nation, national mourning on the part of millions of millennials and gen z’ers erupted as they contemplated the loss of all those hilarious videos and funny dances from the “content providers.” On Quora, the most prominent social “answers” site, one plaintive voice rang out and asked “Even if China is looking at people’s TikTok data or data from Huawei phones, will it affect normal people?” (the assumption presumably being that Uyghurs aren’t). Ringing denunciations of President Trump flooded Twitter and Facebook. Oh, the humanity!

Then an unexpected savior appeared when Microsoft announced it would be happy to acquire the TikToc business. In a single PR masterstroke, the company associated itself with that Ol’ Third Reich Vibe. Everyone was on tenterhooks waiting for Microsoft TikTok to pay homage to the big Broadway opening act of “Springtime for Hitler” by posting a video of Nadella in hip-hop urban dance duds, framed by a chorus line of Microsoft employees in Seattle-style Antifa garb, popping and locking across the stage while crooning out a sizzling rap track:

Redmond’s holding a video jam and we’re excited!

It’s gonna be a blast with cool geeks and freaks

Doing dope moves and sick steps with Bad Kitties who are sheek

But sorry everyone, no Uyghurs invited!

When asked, Nadella was unable to give clear answers to questions such as would the company continue to employ Chinese nationals, who would be required to disclose private information to the PRC upon request while withholding this information from Microsoft, would the company continue using Chinese infrastructure, which could be assumed to be privacy compromised, what influence the PRC would have on future operations, and related questions. But in the spirit of democracy, it was good to know that millions of Americans could join the tech moguls and giants in participating in high-tech stupidity. (The whole discussion ground to a halt with election of former Vice President Joe Biden as the 46th President of the United States.

OK, that’s enough catching up. It’s time for you to prepare for your return to Marketing Hell. Put your nerves in order and stiffen your spine as our journey through the blasted land of stupid marketing and completely avoidable disasters begins. I promise the trip will be well worth it.

__________________

1 “Big, bold … and broken: is the US shopping mall in a fatal decline?” (https://www.theguardian.com/us-news/2017/jul/22/mall-of-america-minnesota-retail-anniversary), Dominc Rushe, Sunday 23, 2017.

2 IBM achieved overwhelming market dominance in the computer industry by 1957 and reigned as the industry’s ruling power until the final collapse of OS/2 in 1995.

3 There is an alternate theory that the virus escaped from a bio lab near Wuhan. Go with whatever version makes you feel worse. (And no, this theory has not been “debunked.”)

4 Otherwise known as Xi Jinping.

5 “Does Trump Kind of Have a Point About TikTok?” (https://slate.com/technology/2020/08/tiktok-ban-china-donald-trump-cybersecurity-privacy.html), August 3, 2020.

Mana Man

In 2011, Steve Jobs passed away from pancreatic cancer. Like most “solid” organ cancers, it’s a tough customer. Your internal organs have no nerves and the cancer normally metastasizes and spreads before it’s detected. Victims typically die months after the first diagnosis.

Jobs was lucky in that he was diagnosed with a rarer form of the disease, neuroendocrine islet cell carcinoma. Unlike the more common and lethal adenocarcinoma, islet cell cancer is often detected earlier and is more responsive to treatment. It can be cured if found early and treated promptly.

As befitting the career of one of high-tech’s most paradoxical personalities, when Jobs was first diagnosed, instead of seeking the assistance of modern medicine and immediately undergoing surgery, he first took a nine-month detour into various alternative treatments, including fad diets and “spiritual healing,” which science has demonstrated are useless. Jobs finally underwent the surgery, which prolonged his life, but he later regretted not acting immediately when there was perhaps a chance for a cure. During an interview about his biography of the Apple titan, Steve Jobs, author Walter Isaacson stated he’d felt Jobs had delayed the operation because:

“I think that he kind of felt that if you ignore something, if you don’t want something to exist, you can have magical thinking.”

While his behavior was foolish and brought sorrow to his friends and family, you almost can’t blame Jobs for believing he possessed some sort of magic. When he returned to Apple in 1996 and resumed full control of the company in 1997, Apple was a fading power in computing and seemed destined for irrelevance, if not erasure. From 1997 to the year of his death, he executed the most remarkable turnaround in business history, releasing three massive hits in a row—the iPod, iPhone, and iPad, not to mention iTunes and the Apple App Store. By the time he passed away, Jobs had achieved more than a business transformation and turnaround. He’d transformed into a totem, a mystical figure with a special mana that, if you could somehow tap into it, would grant you with the power to bend marketing space and time to your own personal reality as well.

Inspired by Jobs and all that luscious iPhone revenue, Jeff Bezos began planning for Amazon to enter the smartphone market in 2013. On the face of it, it was a logical decision. In 2007, Amazon’s first hardware product, the Kindle ereader, had captured the ebook market. In 2011, Amazon introduced its first tablet, the Kindle Fire, and it too had been a solid success.

The function of both devices in Amazon’s sales strategy were to act as low cost, loss leader purchases designed to whisk you into Amazon’s virtual bookstore and warehouses, where you would hopefully buy enough merchandise and services to cover the costs incurred in building them. As such, the design of both the ereader and tablet were minimalist and as cheap to build as possible.

Spiritually Seeking Steve Jobs

For his smartphone, Jeff Bezos had a different plan entirely. By 2013, he no longer thought of Amazon as just a store, but also as a technology powerhouse, a unique amalgam of merchant and high-tech empire. Bezos felt he competed against not only against Walmart, but also against Google, Microsoft, and, of course, Apple, the coolest brand on the planet, which until only recently had been led by the coolest guy in high-tech. Bezos thought he could be cool too, and like many other Silicon Valley CEOs, fired up a virtual Ouija board in search of some of that powerful Steve Jobs mana. Soon, he’d loaded up with spiritual power and the Fire Phone development effort began.

The project, code named “Tyto,” was set up in Amazon’s Lab126 under Bezos’ watchful eye. The facility is Amazon’s design studio and a conscious homage to Jobs and his immortal “pirate” building at Apple HQ where the original Macintosh was developed. Channeling Jobs further, Bezos appointed himself the device’s “super product manager” and made every major design and functionality decision for Tyto during its development cycle. ”

As the device took shape, Bezos became fixated on providing a unique new feature for the new phone, a 3-D effect for the screen called “Dynamic Perspective.” Implementing it required four power-sucking cameras installed in each corner of the phone. Dynamic Perspective’s only practical use was to make your lock screen look 3-D. Sort of. Which wasn’t practical. But in Benzos’ mind, this one feature branded the Fire Phone a high-end, luxury device.

From a design standpoint, the rest of the Fire Phone was an undistinguished black polycarbonate slab with a soft  texture, a design cue taken from entry-level Chevrolets. During the product’s live rollout, much was made of the “injection molded steel connectors,” but the slides also included the term “rubber frame.” The latex fetishists in the audience may have been excited, but the rest of the audience was unimpressed.

Yes, the Fire Phone had a 13 MPS front camera, while an iPhone only had eight, a tangle-proof headphone cord, and a software bundle that sounded nice, but it looked like something you bought at the bargain end of the smartphone counter at Best Buy. And while Amazon wanted you to watch lots of videos on your Fire Phone, it lacked an HD screen.

The Cimarron Rides

The marketing strategy Jeff Bezos chose to use with the Fire Phone is called the “Cimarron Syndrome,” the Black Mirror version of IBM’s subtractive approach. This syndrome is named after the Cadillac Cimarron, universally reviled as one of the worst cars ever made. Cadillac created the car by taking the dull, unloved Chevy Cavalier and sticking the Cadillac’s famous egg shell grate on the front. The interior was detailed in luxurious simulated aluminum. The company also threw in leather seats. No one was fooled by the “Chevrollac” and the car did extensive damage to Cadillac’s premium brand identity that lasts to this day.

Had Bezos been more a student of high-tech history, there were signposts warning him of the perils ahead. In 2006, five years after the spectacular release of the iPod, Microsoft decided it wanted in on all that sweet music revenue Apple was scooping up in the streaming music business with the iPod. The result was the Zune.

Microsoft, using the strategy it had followed since the company’s founding, stuffed the Zune with lots of features and integrated it with Windows and its successful Xbox console series. Unfortunately, when you wore a Zune, it looked like you were carrying around a North Korean concrete apartment block complex on your arm. The choice of colors included brown, which led one wag to comment that a Zune offered buyers the chance to “wear a cow turd to the gym.”22 The whole embarrassment was put to bed in 2011 so Microsoft could focus on Windows 8.

The Ministry of Love

“Making progress on diversity, equity, and inclusion.”

“Google is committed to creating a diverse and inclusive workforce. Our employees thrive when we get this right. We aim to create a workplace that celebrates the diversity of our employees, customers, and users. We endeavor to build products that work for everyone by including perspectives from backgrounds that vary by race, ethnicity, social background, religion, gender, age, disability, sexual orientation, veteran status, and national origin.”

The above is text taken directly from the Google website at:

https://diversity.google/commitments/.

Note that the list of protected perspectives omits political beliefs.

On November 9, 2016, the greatest triggering event in the history of political correctness and the social justice warrior (SJW) movement took place. That night, Donald J. Trump, a New York City real estate developer, marketer, the star of the reality TV show The Apprentice, and very recent Republican, defeated Hillary Clinton, also from New York, a former First Lady, U.S. senator, and U.S. Secretary of State, in a free and open election for the 45th presidency of the United States. Despite the predictions of politicians, pundits, and pollsters, Trump won a solid Electoral College victory of 306 to 232 while simultaneously losing the popular vote 46.1% to Clinton’s 48.2%. It was the most surprising and unexpected upset in American political history.

The reaction of many Democrats upon the announcement of Trump’s victory was also unprecedented. Across the country, Clinton voters wailed, gnashed their teeth, screamed into the sky, and fell to the ground crying. On television, moisture forced itself visibly out of the tear ducts of some anchorfolks, while others became emotionally distraught. Breaking with all precedent, candidate Clinton did not appear on screen to gracefully concede the election, congratulate the winner, and roll out the eternal clichés about how she would continue the fight, the future for America remained bright, and how we should come together as a country until four years from now, when the American people would undoubtedly correct the mistake they’ve just made. Instead, she reportedly threw the mother of all temper tantrums172 and was not fit to appear in public until the next morning, at which time she dutifully performed the expected ritual.

California, which had recently instituted an electoral system designed to suppress conservative and Republican turnout, shared in the progressive sorrow. A nascent secessionist movement revved up and the state did its best to imitate South Carolina circa 1861. A rumor spread that so many Golden Staters threw themselves to the ground to pound the tips of their patent leather shoes against the earth in protest against the cosmic injustice of it all that there were fears the vibrations would trigger the San Andreas Fault.

The One H44444our Sob at the Googleplex

And then there was Google’s all hands corporate meeting at the Googleplex, held shortly after the election. The meeting ran just over an hour and was filmed for internal use only. In September 2018, the video was anonymously leaked and can be viewed in its entirety online at the link in the footnote.173

These TGIF (thank god it’s Friday) meetings are held regularly at the world’s dominant search engine firm and allow employees to comment and grouse to upper management. Many other companies have their own version of these get-togethers. In every company I’ve ever worked or consulted for, political discussions were either brief or not welcome. Business was business and customer ideology and who they voted for was not relevant to the bottom line.

Not so at this meeting. If a video editor had removed every mention of the word Google and its derivations (googly, Googler, googleness) from the footage, a neutral observer would think they were watching an election post mortem held at the HQ of the California branch of the Democratic National Committee.

The video’s atmosphere is grim, moist, and huggy. Sergey Brin, Google co-founder, kicks off the proceedings by telling everyone that “most people are pretty upset and pretty sad.” But then he pivots to happier news by mentioning that California has legalized marijuana. This lifts the gloom a bit as the happy Googlers cheer the good news.

Celebrating their virtual contact high, everyone hugs each other. Then Eileen Naughton, Google VP of People Operations, promises to help fearful Googlers relocate to Canada. Sundar Pichai, Google CEO, drops broad hints that Google will be “adjusting” its search engines to deal with “filter bubbles.” No one comes right out and says Trump voters are Paleolithic neo-Nazis, but lots of hints are dropped— “tribalism that is destructive in the long term,” “voting is not a rational act,” “low-information voters,” and similar banal observations typically applied by the left to the right. VP for Global Affairs Kent Walker informs the rapt audience that Google’s “job is to educate policy makers.” (I’d always thought the company’s job was to build a search engine that gave the most accurate and neutral results possible, thus enabling people to educate themselves.)

Periodically, the prevailing narrative is interrupted by assurances that Google understands that conservatives may feel uncomfortable by disagreeing with the opinions held by every member of upper management and by what appears to be 100% of the members of the meeting. No one during the session stands up to offer viewpoints that differ in any way from the room’s prevailing zeitgeist.

The session reaches its penultimate point when the moistest white guy in the audience stands up and reads from a little script that urges everyone go through Google’s “unconscious” bias training (these programs are scams), watch a left-wing documentary currently playing at Google, and start political arguments during Thanksgiving.

As a Google stockholder, I was appalled. I found Brin’s delight over his employees’ easier access to a drug that makes you stupid and laugh at things that aren’t funny inappropriate. Were people who rely on Google’s much heralded navigation software going to have to worry that their self-driving car would one day run a solid red light and T-bone a minivan full of kids because a stoned Google programmer compiled the wrong code into the system while fumbling for a Twinkie to quell the munchies? That the people responsible for Google Maps may one day tell me to go left into a ravine instead of right onto a road because they were all sitting around giggling and not paying attention to the process of inputting accurate satellite data into their GPS mapping software?

The whole session was a PR disaster. It is very bad business to insult 50% of your potential customer base. I kept hoping that at some point a Google board member, perhaps one who’d attended the meeting on an impromptu basis, would leap on stage, throw a bag over Brin’s head, and drag him away before he could talk further. I started to speculate the whole get together was some sort of practice run for a Saturday Night Live satire about a group of rich, clueless, California high-tech nerds sitting around congratulating themselves for their inclusiveness while all believing and saying the same thing. But alas, no.

When the sniffles had dried and the last hug unwound, I stared at the screen and wondered what business would trust Google to provide reliable search results on any topic that dealt with politics, conservative demographics, and thousands of related key data points? Google was asked exactly this question when the video leaked. Their response was:

“At a regularly scheduled all hands meeting, some Google employees and executives expressed their own personal views in the aftermath of a long and divisive election season. For over 20 years, everyone at Google has been able to freely express their opinions at these meetings. Nothing was said at that meeting, or any other meeting, to suggest that any political bias ever influences the way we build or operate our products. To the contrary, our products are built for everyone, and we design them with extraordinary care to be a trustworthy source of information for everyone, without regard to political viewpoint.”

Despite this cheery assurance, many people had their doubts. In 2019, those doubts would be confirmed.

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