TEN REASONS WHY I AM ALWAYS SO CRANKY Ogilvy & Mather IBM team conference Montreal 1999 I'm happy to be here. It is funny, though ñ anyone who knows me would split a gut laughing that me, of all people, would be addressing a confab of advertising executives. As I have often been heard to say, somewhat indelicately -- I hate advertising, especially the odious and irrelevant direct-mail that floods my e-mail and my snail-mail at home. And I reserve my deepest feelings for the new generation of custom spam, courtesy of data mining, a topic I will dig into later if time permits. But first, I hope you will indulge me for a moment. I want to spend a minute on the title of this talk. I realized that without some context, you are likely to walk away from this thinking that I really am a cranky person. Which I am not, at heart. So this is what I want tell you: Being critical, having strong opinions ñ especially having strong opinions that are counter to the prevailing culture ñ is not an easy path. The typical response I get, after someone asks my opinion on some topic ñ Asks, mind you -- is often a patronizing little chuckle, followed by: "hey, Denise, tell us what you really think." [pause] I hate that. I don't really like poking holes in the mythology that the technology industry has managed to perpetrate on the mass media for the past 20 years. But I do it because I think somebody needs to. Someone has to care enough about what's happening to look for cracks in the facade, And to point them out so that maybe we can stop ourselves from doing something stupid again. So that's why I do this. That said, I commence to present to you ... 10 reasons why I am so cranky. Number one: infinite loop(iness): the hype machine "infinite loopiness" is what I call the consensual hallucination between the trade magazines, the business press and the public relations machines of every technology and media company on the planet. An infinite loop, as some of you may know, is a programming error. It happens when a software program refers back to an earlier instruction, which executes its next command that then refers back to original instruction, and so on. It's kind of like a dog chasing its tail. Infinite loopiness has been responsible for the creation of a kind of loaves- and-fishes, endlessly multiplying mountain of bogus business plans and public stock offerings ñ Ñ and eventual bankruptcies and consolidations and shakeouts and layoffs and mostly needless human career suffering. The infinite loop goes like this: Some guy in a garage discovers-invents-steals some technology, or ñ and this is the latest scam ñ patents some new "method of doing business" on the net. Let's just generically call the category: " solutions in search of a problem. " Visionary founder thinks he's found the equivalent of the holy grail ñ if not in terms of the actual product concept, at least in terms of sucking big buckets of money out of investors. He gets first-round venture funding. He hires a pr company. Pr company trots him around to the analysts, "the monthlies" and eventually to the national business press to peddle the story of holy-grail-dot-com. Almost overnight, a new industry based on holy grail's concept is born. Suddenly venture capitalists are funding holy grail-wannabe business plans with abandon. Wall street is giving them enormous valuations based on their "potential." They go public. The VC's sell off a pile of stock into the open market. The folks they sell it to start losing their pants when the stock slides. Then the press starts a backlash to the holy-grail mania ñ which, of course, it was totally complicit in creating. And there you are. Infinite loopiness. If we're lucky, all that wasted money has advanced the state of the art a little bit. But usually this scenario loops you pretty much back to square one, with a few billion dollars down someone's drain. I've seen this one go around a few times. Remember artificial intelligence? How about "the year of the CD-ROM" ñ which apparently started in 1984 and hasn't yet happened? I begged off writing the "year of the CD-ROM" story in 1984 when I was at InfoWorld. The next year, when I was west coast editor for electronics magazine, I couldn't get out of it. My profound observation, at the time, was that if I could store a whole lifetime of new Yorker cartoons on a single disk, that would be good enough for me. (of course, for CD-ROM that was about as good as it got ñ so I guess that was one of the early indicators of my status as "visionary.") Then it was multimedia, which would save the education system and revolutionize entertainment. Then it was interactive television, which would save the education system and revolutionize entertainment. [pause] ... We got interactive television back again, didn't we? More on that, later. And now it's e-commerce and the Internet and the world wide web. That's right. Saving the educational system and revolutionizing entertainment.. And it's free! I mean, it's -advertising - supported. [pause] And of course, the important stories ñ the real ones, the ones that aren't based on shiny-happy-people-blue-sky- future-tripping and propaganda ñ no one pays attention to until it's too late. Like in 1986 or 1987, I'm not kidding, more than 10 years ago, I was writing columns -- Ñ in a large major metropolitan daily newspaper that covered silicon valley ñ About a problem that software engineers in banks and other institutions were starting to be concerned about. They called it the "year 2000" software problem. Funny how that one didn't catch on. Which leads me to cranky item number 2: The carpetbaggers: short term thinking masquerading as vision This item is cheating a bit because it really is an extension of infinite loopiness. But I thought it was worth going into, since the problem is epidemic in the interactive media world, and in Internet startups. Carpetbaggers are often ñ but not always ñ involved with the 2nd-or 3rd- or 4th-tier, me-too companies, and the venture firms and investment banks who love them. You know, the dot.Coms. They don't even pretend to be the next Netscape or yahoo, most of 'em, they're just slipstreaming . E-tailing. E-trading. E-dating. Y'got yer community. Y'got yer commerce. Y'got yer sticky applications ...Ick. Y'got yer streaming media. Oh yeah, streaming media. "broadband applications." Dot.Com on steroids! Woo hoo! Just in time. AT&T, TCI and Paul Allen couldn't possibly all be wrong about cable, could they? I mean, they couldn't all be wrong twice , could they? Or maybe you've all been on Internet-time too long to remember the first round of cable-telco hoohah. Okay - this is where I do my imitation of the Internet investment market today -- a bunch of people standing in a circle doing this ... [blowing] But I digress. Sometimes the carpetbaggers wait long enough to ship a product, if there even is one, sometimes they don't. But in a few months or a year, when the company hasn't turned profitable on a dime, they either sell it off or fold up their tents and go home with whatever golden parachute they've managed to finagle for themselves in the process. Leaving, of course, a pile of people on the sidewalk. This whole drill reminds me of a little aphorism that my former boss Norman Pearlstine says: "the flogging will continue until morale improves." Which leads me to numero trois on the cranky list, being: Lack of critical thinking, or the merge-purge mentality. Sometimes I think people in this business have completely lost their minds. I consistently see so little good, critical thinking that I actually start to wonder whether it's me who's insane. [pause] that's a joke. I'll start with the big examples and work my way down. Let's take synergy, one of those words that makes my teeth itch. I hated it in the early '90s and I hate it even more now. Synergy, a-k-a "greed and power lust," is supposed to be what happens when a company snookers wall street into believing that it will be even more powerful in its market ñ Ñ a market which, apparently, like the roman empire, is comprised of anything upon which it can cast its beady little corporate eyes ñ Ñ if it buys up everything in sight that today or in perpetuity throughout the universe might somehow be connected to its business. Or, more to the point, that might someday threaten its business. For example, a few years ago, if you were a company who expected anyone to notice the size of your cojones, it became critical to own a television network, or at least have access to one. But that is so 90's. Today it's a portal you have to own, or better yet, a cable company. And a phone company, if you aren't already one. Wires. Distribution. It's the new merger mania. Telephone companies are buying cable companies, cable companies are buying publishing and entertainment companies, they're all buying dot.Coms. It's one big orgy and they're all pretty much groping each other, really. At this rate, I think Bill Gibson may have been right in Neuromancer, that at the end of all this we'll just have three companies left standing ñ Ñ he said they would be Japanese, German and American, but I think it's more likely to be Disney, AT&T and Microsoft. Anyhow, the basic idea here is that if you own the distribution channel, in their case the telephone or cable wires, then you can make a lot more money if you also own what goes over those wires. This used to be illegal, right after the breakup of the AT&T monopoly. A phone company couldn't own both. To do so was considered a threat to free speech, for one company to both own the wires and own what went over them. Pretty logical to me. I've never been able to figure out who zoomed whom to get the US. Government to change their mind on that one. It must have been the investment bankers. As far as I can tell, they're the only people who are actually making cash money off these deals. [pause] But in the media world, there is another, very nasty by-product to synergy. I believe that it is in the process of bringing about the end of independent journalism. Softbank, for example, for whom I have worked a couple of times in my career, owns all the Ziff trade magazines. It also owns Comdex, interop, Seybold and other trade shows. It is also investing like nobody's business ñ even more than Microsoft ñ in hardware and software companies. This would be what you'd call a major conflict of interest. And there are hundreds of conflicts like that, every day. Most of them would be well under your radar screen, unless you were paying attention for some particular reason, or you knew the players. You know, like when you think about the MSNBC joint venture and then you notice that tom Brokaw is the one who gets the exclusive interview with bill gates when the new version of windows is released. Or when you remember that Disney owns ABC, and then you notice when ABC news does a long, like 5-minute, feature on a new Disney world ride. Of course, all these companies hotly defend their journalistic integrity, and maybe so far, they have been able to cling to it. But no one in the media calls them on individual instances, because anyone in the media who could call them on it, and be heard, is in the same position. Death by a thousand cuts for free speech. Very sad and scary. And it doesn't seem to be working too well, either. In yesterday's new York times, for example, there was a story that Disney, facing the brutal reality of its purchase of both Starwave and Infoseek, may put its digital assets into a tracking stock to keep it from ñ soiling, shall we say ñ its annual report. Synergy as a media buzzword seems to have died off a bit in popularity. But the lack of critical thinking that launched it in the first place is still alive and kicking . Which leads me to number four: Unrealistic expectations/the denial machine Because everyone wants to find a mass market for technology products, there has been a race to make people believe that computers and software are easy to use. But as Chris wall said yesterday, the truth is that computers are extremely complex, and getting moreso, not less. Making them easier is fine, albeit challenging. But I wonder what we lose by trying to simplify technology too much, by hiding its complexity. And what effect does that have on culture in the long term? What is the deep result when you dumb-down technology for the masses? After the mainframe, what new priesthood installs itself? I have some ideas, but I don't know the answer. It's just a question. [pause] Okay, let's do another word problem, shall we? This one keeps coming up in the urban-myth spam that I get every day ñ You've heard it. The modem tax, the threat to the freedom of the free Internet. But let's face facts here. The Internet isn't free, and it never has been. Someone has always paid. In this case, it happens to be the telcos, who are not allowed to charge long-distance fees for data calls. But is this fair? The physics of the Internet aren't any different than the physics of the voice network. Sending your mother e-mail in new York isn't physically any different ñ thus not inherently any more free ñ than picking up the phone and talking. So why should the telephone companies not be able to collect revenue on that call? And why is the net community ñ so libertarian and anarchic ñ willing and in fact adamant about continuing what could only be called an entitlement? Just a question. Another big chunk of denial that you all may need to look at, pretty darn soon, is the concept of advertising support for the net. I don't know who saw the new York times yesterday, but there was a big feature in the business section about ad-blocking software. Now I know that ad blocking makes your clients very cranky, but give me one good reason why I shouldn't do it? Ads slow down my computer, which I paid for. Ads slow down my net connection, which I pay for. Ads are largely irrelevant and annoying, which click-through statistics bear out, and which you pay for, in terms failing to get my attention. But Internet executives say ad-blockers will "challenge the fundamental structure of the emerging Internet industry." Yr goddamn right! This wasn't our idea. Advertising support was the bright idea of people who couldn't figure any other way to bring in some cash. Certainly most of them weren't putting up anything on the web that anyone would pay for. My favorite quote was from the guy who said that audiences already allow advertising in mainstream media, so users will have to be tolerant of it online. Yeah, that's a customer-friendly strategy: "put up or shut up." The fact that consumers are barely tolerant of advertising ñ and I'm not saying this, I heard an ad guy say it at the Jupiter conference in march ñ indicates that a new attitude is in order for doing business today. Stuff like ad blocking software, or a new rate structure for the Internet, are potential realities we deny at our own peril. They can change the competitive landscape, literally overnight. Which leads directly into my next item, number 5: We have to stop pretending there's a forever The incredible number of carpetbaggers in the age of the Internet ñ and the absolute chaos they have created ñ got me thinking about business models. As no doubt you have noticed, one of the many things we are witnessing, as we approach the millenium, is the commercialization of everything. Everything is a commodity ñ especially intellectual property. Why do you think they call it "content"? It's all just a bag of bits now ñ Not a news story, not a song, not an essay or a photograph or even an advertisement. It's content . Anyhow, once mosaic hit the market, there were a bunch of imitators, almost immediately. Digital. Easy to copy. Yahoo, the same thing ñ search engines became an instant commodity. So it seems to me that nowadays ñ unless you're Microsoft or Intel and totally own your market ñ That anyone who wants to be a long-term player in the net economy should be operating like an independent movie studio. The "realistic" business plan would say, "I have this product, which works on holy grail technology. This is my angle. Based on these sets of variables, I believe we have an 8-month window to either take the company public or make $x million dollars by selling the company to Microsoft." [pause] or, you know, to AT&T or Paul Allen or Disney. You do that, then you get out and start something else. That's de facto what's happening now. But being up-front about it, the way the Hollywood model works, would save a lot of worker bees from thinking they've failed or didn't do the right thing or put their families at risk by working at a startup. Everything in this world is short-term. It just isn't possible, unless as I say, you're Microsoft or Intel or Disney or Paul Allen and you have a huge pile of cash, to stay any particular course for very long. Just move on. Realism of this sort leads me to another thing that drives me nuts, which is cranky item number 6 ... Civil liberties and the bottom line Business has become the politics of the '90s, where anything that isn't good for my corporate bottom line couldn't possibly be good for democracy. Aside from being a lie, it is an incredibly dangerous and slippery slope, to continue to ignore the public interest in order to maximize profits and remove government from even its proper role as the keeper of order. I do not understand an industry which defends its civil liberties only if that defense has financial benefits. The encryption debate in the united states, for example, and increasingly abroad, focuses not on the rights of people to protect their privacy and security, but instead on the ability of software companies to sell their products overseas. Very few software companies fought the communications decency act, but they sure as hell have been fighting crypto export bans. The only ones who did fight the CDA. Ñ and it was a tiny percentage of those who should have ñ fought it because they figured out that censorship of any kind would curtail their ability to sell information. In fact, I found this was the only argument I could get people to listen to. In the same way, it's been very hard to convince businesses to protect their customers' privacy on the Internet. I continue to be thrilled that IBM stepped up to the plate on the privacy issue. Finally people are beginning to understand ñ again, primarily because it's a bottom line issue ñ that they absolutely have to do this to succeed. Data mining and abuse of personal data will absolutely bring down the heavy hand of regulation like a ton of bricks if more companies don't head in IBM direction on this. And speaking of sauce for the goose and the gander, let's move on to consider item number 7 ... The Microsoft juggernaut I will keep this brief. I am really sick of hearing everyone, including myself, kvetch about Microsoft. They complain constantly about it, but then they won't do anything that would actually stop the company from getting more powerful. Like not doing deals with them. Like shipping solid, high-quality products for Macintosh and Linux at the same time they do for windows. Like not trying every single day to figure out how to be just exactly like Microsoft. I was going to write a book on how to compete with Microsoft at one point, and I gave up the idea when I realized it should really only be one sentence long: Just say no. Of course, I understand why companies say yes. Developing for the industry standard certainly is how make the most money. But if that's your story and you're stuck with it, as my mother would say, then shut up already. It's so hypocritical! Bill gates has been installed as the dysfunctional father-figure of the computer business, the guy everyone loves to hate. But no one is willing to actually grow up and separate from him. Not to mention there appears to be a bit of the old oedipal complex going on here. As Ashleigh brilliant says, "they want all of the power and none of the responsibility." But don't get me started. I could probably come up with a segue into my next peeve, but I can't think of one right now, so let's just move onto number 8 ... Interactivity: technology masquerading as customer value I don't know about you, but I look at the enormous amount of dreck out there that is calling itself interactive media and I get heart palpitations. Give me that production budget! Let me make it! I know I can do better than 90 percent of that stuff. And why do I think that? Because I have very few preconceived notions about what interactive media is, or should be. The defining concept we worked with, back in the pre-Internet days was something we called "not a book, not a movie." Because it's not. It's like art ñ you may not be able to define it, but you know the good stuff when you see it. So what have we got? Digital books. Digital movies. Not to mention digital magazines, digital videos and digital radio broadcasts. Cut it out! I mean, okay. Sure, there is absolutely some measurable utility to duplicating all that stuff on the web so I can find it. But beyond that please don't tell me this is new media. I can't define new media, but I know it's not that stuff. The question to ask is, what's new today that couldn't be done before? What is different that the technology enables? Everybody laughs at e-bay because it seems so silly, a global flea market. But that is a new communications medium, kids. And people love it. They use it. So is Geocities. And so is I-village, love it or hate it. Whether we think the content is insipid or not, from our elitist, oh-so-literate and hip perspective, is absolutely beside the point. Millions of people in chat rooms on America online every night don't give a good goddamn what we think. People creating websites on Geocities, either. In fact, they think it's really stupid that anyone would want to watch television on their computer, for example. Who'd want to do that? Why would you wanna do that? I mean, maybe some day. But why now ? Maybe it's an education problem. Maybe if media and entertainment people really understood technology and interactive design and what it enables, they wouldn't just try to replicate what they already know. Maybe if technology people understood literature and story and culture on a more fundamental level, they would see the value of engaging people rather than plugging in "content elements" on a website. We all need to blow down our conceptual walls. And education is one good way to do it. Which leads me to number 9 ... Education/locking the prodigy in the attic After a few years of looking at all this stuff, a realization has been creeping up on me. It's really depressing. I've realized that the very best stuff I've ever seen, interactive media-wise, was educational stuff. And it was stuff that was done 'way back at the beginning of multimedia. Back in the apple multimedia lab days. Back in the early days of the voyager company and its stunning multimedia Beethoven title, the first commercial CD-ROM, which still gets standing ovations today. Back when bob Abel did his brilliant Guernica videodisk project, that was wisely and bravely ñ and extremely unprofitably, I might add ñ funded by IBM. I remember one Saturday afternoon, just after I started my digital media newsletter, being cranky about having to work. I was especially cranky because I was going to have to review this voyager disc called exotic japan. I couldn't have cared less, right? Three hours later, I looked up and almost dropped my teeth. I had been engaged , fully engaged, for three hours. And I learned stuff about Japanese culture that I've never forgotten. Okay, so maybe it's not such a big deal that you are supposed to eat sushi with your fingers, not with chopsticks, but I didn't know that, did you? So why is education software treated like the leper of the industry? We pretend like it's just as important ñ we sure give it a lot of lip service ñ But then we leave it to people like Larry Ellison and Michael Milken, who talk about cartoon characters and electronic flash cards in the same sentence as "changing the educational system." [pause] Even today, with the ascendancy of technology to center stage, the nerdy kid is still someone who movies and TV shows make you feel sorry for. They make him ñ yes, him ñ ugly, out of proportion. Anti-social. One big visual joke. Our culture hates intelligence and people who use their brains. We'd rather think we know Monica or OJ. Or Diana on a first-name basis than look at what's going on right under our noses ñ Which is, our kids, who can't read and can't think and seem to get stupider and more violent every year. [pause] I was slightly comforted yesterday to read that Ogilvy is trying to do something about this, with the noggin campaign for nickelodeon. Very cool. But you can do more. Use your skill at propaganda to convince people ñ not just kids ñ that learning is hip. Get good stuff on the web, get people to engage with it, maybe even pay for it like they pay for movies and music. That would make me a lot less cranky. And I'm not talking about making learning fun. Learning isn't fun. It's hard work. But as many of us know, hard work is often its own reward, and those rewards are much greater than anything that Hollywood has ever given to me. Which leads me to my final point, number 10 ... Diss(ing) information Something happened to me a couple of years ago that meant a lot in terms of how we're thinking about the world that we're creating. I was trying to come up with a theme for the conference I was producing back then, and I was trying out a bunch of stuff. So I was playing around with some really bad, boring, dumb clichés when the line "hurry up please it's time" Went through my mind. All I could remember was that it was from a TS. Eliot poem. A couple of nights later, I went to Alta vista and typed in the phrase. Up came a few hundred TS. Eliot references, but about fourth down was a link, "The Waste Land, by TS. Eliot." And there it was. The whole poem. Some guy had set up an entire website on his company's server, without permission, that was a compendium of hundreds of the world's best poems, by his measure. I cannot tell you how much this moved me. I felt like I was warming my hands at not only the fire of human knowledge, but the fire of human endeavor. A human being, sitting in front of some backlit rectangle, cared enough to make sure that TS. Eliot was on the web when I needed him. Why do we appreciate this so little? Why is entertainment so much more important to us than information, than access to knowledge, than inspiring people to create for themselves or be of service to others, to follow their curiosities and obsessions? Are all our machinations for interactive media ñ as defined by the big guys, not the little ones ñ just fiddling while Rome burns? Mass-market entertainment is so cheap and shallow, compared to what we would accomplish by inspiring people to learn or even just keep creating. As the web pioneer Justin hall says, "the web ain't mass media. It's a medium for the masses." Watching what inspires the masses ñ and what they do with that inspiration ñ inspires me. Obviously this has been an inspiration for Ogilvy, too. It's what the whole e-business campaign has been about ñ a campaign that, despite my feelings about advertising, often strikes exactly the right chord for the Internet age. Showing people that technology can give them a way to change their lives and take back even some small amount of their power is a very good thing to do. On the days when I'm feeling metaphysical about it, I cling to the hope that all the hubris and silliness in today's industry is really just the dying cry of dinosaurs, trying to delay the inevitable. Try as they might, they just can't keep up with the warm blooded little mammals that are already nipping their heels bloody. That's what I'm really looking forward to. I want to get past this transitional stage, where the old way is dying and the new way is being born. I want to meet the entrepreneurs and artists who will come of age with the Internet as a given, Who fully expect to be the masters of their universe on this global network. And even with so much else to be cranky about, they are the reason I'm sticking around. Thank you for listening to my rant.