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"The old guys were really funny -- the City establishment sat there for three or four years saying 'We're not interested in this and we don't understand a word you're saying, go away and don't bother us.' That was completely their point of view until about September 99 when they said 'Come here, we'll give you as much money as you want, please please please, we love you!' It was a complete switch-around. Virtually over the summer of 99 in Britain. And then by March of 2000 it was gone again."

Richard Marshall interviews Rory Cellan-Jones


RC: The book came about because I’m a business correspondent with the BBC and in all the years I’ve been covering business this was just the most exciting phenomenon I’d encountered. It was a whole new generation of people. I’d been used to grey suited people who had lunch at the Savoy Grill and who weren’t very interested in talking to anyone except people on the commercial side and then suddenly there was this whole new class of people who were interested in being on the TV, who were interested in what I did, and I’ve got bored with people who weren’t very interested in being on the TV. This new breed, they were all of them younger than me, which was kind of frightening but really stimulating. They all believed that they could start companies in a big hurry that would be able to achieve an enormous amount. So I think covering this was really exciting. Then a publisher got in touch with me in the Summer of 2000 and wondered if I thought I had a book in me and I thought that this was a story that really needed telling. The British end of it hasn’t been told at all. The American end there were quite a few books about it – The Silicon Boys Michael Lewis’s book The New New Thing , quite a few books that captured the excitement of all that period. And by this time, summer 2000, you could hear the air coming out of the balloon. The thing had gone pop back in March, April. There’s a nice discreet period of time in which Britain had been through this welter of excitement about this new technology and about its potential for making huge amounts of money. That was at the heart of it. Great excitement about money. So I started work on the book later that Autumn and had to finish by April 2001. It was a fairly intense period during my day job where to be frank the editors where I work lost all interest in the phenomenon once we’d covered the stories of the companies going bust. They felt there was nothing left to say. But I was getting more and more immersed in these people and in what they were doing.

3AM: You were talking to these people weren’t you?

RC: Yes. I’d been filming a lot of these guys and I went back to the guys I’d been filming and did interviews with 60/70 people and a book is so much more an intense piece of journalism than TV where I’m doing 1 1/2 minute pieces typically. So what I was doing for the book is what we’re doing now , spending a couple of hours hearing the stories of these peoples lives.

3AM: So was it money that you found motivated these people?

RC: It was a curious mixture of things. But you can’t overestimate the importance of money. It affected everyone in this period. 99% of us didn’t do anything about it, 1% did. And the 99% of us that didn’t do anything at the time thought ‘Jesus, I’d love to do that,’ ‘Look at the money to be made’, - so money was a large part of it but also, there was a revolutionary spirit that said – anybody can do this, anybody can start a company and be rich in a few days and anyone can take themselves onto the Net, just like you are doing here…

3AM: But was it actually true that everybody could?

RC: No it wasn’t. I think the slightly sad thing is that it was going to be a class of people who would never get involved in business normally and there were a couple like that – a couple of people who were just ambitious kids who might have been stuck in a bank for the rest of their lives or something rather tedious in middle management – who thought they could do it themselves . But a lot of them would have done it anyway, only later. They’d have been entrepreneurs, chief executives, in their late thirties and it enabled them to do it in their middle twenties. In Britain there were already quite a few people who were already moneyed, who came from a fairly prosperous background. But there were a lot of other people – I think if it had gone on longer it would have drawn in a lot of other people – there were people who were coming up with ideas who were about to pitch and they never quite got there because the money dried up.

3AM: But it wasn’t quite the classless revolution people talked about?

RC: No. One thing that I think was different was that different kinds of people – technical people who have always perhaps found it difficult to break through in Britain , you know, we’ve had a lot of very brilliant technical people but they have been on the wrong side of the dividing line between management and technicians, you know, brilliant software people – these people found it a bit easier to be listened to . I think it was the first time that you’d meet people who were reading the Guardian . Business people reading the Guardian,! It was quite a funky thing to be in. It was funky to be in business. When I left University twenty years ago – oh God, twenty years ago – there was a great divide between people who wanted to go into the arts or tortured individuals who didn’t know what they wanted to do but something vaguely artistic, creative whatever, and on the other side this very driven bunch of people who wanted to be investment bankers and accountants . They were two completely separate tribes. What struck me during this period was that there was only one tribe. I think if you’d gone to major universities in late ‘99 and early 2000 and asked people what they wanted to do a huge range of people would want to run a dot. com. And amongst the people I spoke to there were people who were kids from Leeds who ended up running their own company a year later and six months after that was out of a job again.

3AM: One of the things that comes through in your book is the kind of Groucho Club atmosphere of these companies. Young, ad hoc, buzz, excitement, sex, drugs, booze …

RC: Yes. There’s a quote in the book ‘It was like Woodstock. You just had to be there.’ And it was as bad as Woodstock as well. When you think of the rock business, lots of people want to get into the rock business for all sorts of reasons – money is a part of it – but it’s a cool place to be.

3AM: So what went wrong? Was it because they weren’t any good at being business people after all?

RC: Two things. When you look at the reason why some of the companies failed, notably a large part of it seems at first sight to be because they weren’t professional about it and they were completely off their heads, spending money like water but I think the sad truth about it is that whatever they’d done it would have happened. Stupid people have gone down the drain and clever people have gone down the drain too. It was a bubble. Things get overvalued, people lose track of something’s real value, and so when the bubble bursts good things as well as bad things just get wiped out.

3AM: Because the old guys didn’t know what to do with any of this stuff did they?

RC: The old guys were really funny – the City establishment sat there for three or four years saying ‘We’re not interested in this and we don’t understand a word you’re saying, go away and don’t bother us.’ That was completely their point of view until about September ‘99 when they said ‘Come here, we’ll give you as much money as you want, please please please, we love you!’ It was a complete switch-around. Virtually over the summer of ‘99 in Britain. And then by March of 2000 it was gone again.

3AM: You talked to these guys when it had all gone.

RC: I had been talking to them whilst it was going up as well but my main research for the book was when it was going. Although the funny thing was that as it started to go they were going ‘This is really healthy. We are the solid people and all these floppy people are being blown away and that can only be good for us. We’ll be the people who hang on in there and make it.’ But most of them also got blown away.

3AM: Were they blaming anyone or did they see it as an unavoidable fate?

RC: It was one of those things where I think there were very few people who thought it could last even when it was going. So a lot of people were saying whilst it was happening ‘This is madness.’ Even people who were running the most mad companies. The guy running 365 which is a football website and music website which floated and was worth a ridiculous amount of money for a while said ‘ It has lost touch with reality’ and people in the Financial community were telling him to abandon reality. They were asking him why he wasn’t spending more! He thought it was crazy and wasn’t surprised when the air came out of the bubble. A story that never made it into the book because the guy in the end didn’t want to be named because he was just a kid. He was a student at Leeds University who got taken on straight after college onto some football website and they poured more and more money into this website – the investors – and within a year he was the chief executive. Despite the fact that he was just a kid from Leeds who liked football. He was just aghast to find himself chief executive of a company that was going to float and he was theoretically going to be a multi-millionaire. Because anyone at that stage who was in a that had prospects of floating knew that they were going to be worth millions. And then three months later the backers pulled out and he found out that he was worth nothing. And he was back where he started. A lot of the enjoyable stories are around the fashion website that was the most excessive in Britain. We were very lucky that it set up here because it provided us with all the crazy stories. What I found amazing about that was that I wrote a lot of stories about in the book and I spoke to maybe twenty people who worked for it and it was this company that had offices on Carnaby Street with plans to sell fashion sportswear around the world and planned to be huge within a couple of years and got the backing of the most blue chip of investment bankers in New York, JP Morgan, and what I found extraordinary about it was that it was obviously completely crazy and eventually disappeared in this enormous crash – but what I found interesting was – yes, I spoke to quite a few people who thought it was mad and went along for the ride and thought it was appallingly run by the two Swedes who founded it but there was a hard core of people who were incredibly loyal – they thought it was the best time of their lives. All the people who worked there – just imagine this was an office off Carnaby Street which had four hundred people in there, and they described it as everybody was pierced or had strange hair – it was just the most funky place and for a lot of them they thought it was just the best time of their life. You could not imagine anything more exciting. Until it turned into Paradise Found and Lost within a year. It soon turned into back-biting and murder. When I spoke to the loyalists and there were quite a few of them – they said that there’s been a lot of stuff in the papers about the extravagance but they were saying that it had been massively overstated. And I told them that I was writing about this in the book because I’d been told about the extravagances. You know, the fact that they would fly to New York business class and stay in the best hotels and have extraordinary Christmas parties with acrobats and that they were based in the most expensive part of London and so on. And they were saying that these stories were all so overdone. And then a couple of months later when my book was published the founder of this company, Ernst Neilson, brought out his own book, boohoo which was a kind of apologia for boos rise and fall and on every page there is ‘we spent all night drinking vodka and champagne in this bar and we did this and we did that and we stayed at the Soho Grand whatever, we flew Concorde, we flew private jets – the whole thing is about what a money spending spree they’re on and one of the people I’d spoken to rang me just after his book came out said she was so disillusioned. I really feel let down. I didn’t know that was going on.

3AM: They sound like the yBas

RC: Yes, and that’s so unlike the business community. It was extraordinary. Of course, for a journalist, that’s what made it so great. I’m under pressure to make business more accessible and more interesting for a mass audience and it’s a struggle not because there aren’t fantastic stories to be told about business but because business doesn’t want to tell them. Business is far more show-bizzy in America. Executives in America want to be on the TV. They see it as part of the job. Executives in Britain see it as part of their job to stay off the TV. These people didn’t and they had that show-biz sense.

3AM: So what’s left after the collapse?

RC: It’s sad in the way euphoria is followed by depression. I think there are two areas to look at – what’s happened to business and what’s happened to the Internet. In terms of business I think some things have changed – business has become more aware that it should give people their head more – big organisations have shifted slightly to lure people back who have run away and despite the fact that things have failed a lot of people who went and did them said they never want to work the way they did before. I interviewed a lot of people about their feelings about the way they worked at the dot com thing and the main thing that came out was a sense of possibility that there was at that time and they didn’t want to lose that despite the fact that the dot coms failed. It’s a slight shift and it does move very slowly. The growth of the Internet – huge claims were made about how it would revolutionise business, a lot of which turned out to be crap. You know, the idea that nobody would go shopping anymore and the fact that on-line books were a real possibility – these strike me as being a very long long way away. We found that only a few things do work on the Net – we thought it would change every industry and what we found was that it changes things in a much more subtle way. The internal workings of companies and industries. And perhaps over a longer time period. The way they disseminate information to their staff and their suppliers and to the outside world. That’s obviously changed radically. But what we’re still looking for is how to make money out of that. There are only a very few people who are making money out of the Net. At the beginning of the book I talk about how much hostility there was in Britain to the early commercial entrepreneurs – people who wanted to take the Internet into business because it was seen almost as an alternative society. Which is pretty strange when you consider that it was invented by the US military. In some ways the things that have worked go back to the community stuff that got people so excited and worked at the time.

3AM: So what is making money?

RC: e-bay is making money. Google. Google is fantastic. Friends Reunited is an example here of something that works because its based on what the Internet’s good at which is processing information and letting people communicate. And look at what’s happened with this census that’s gone on line in the last couple of days. That’s just a fantastic example of what it can do. This happens with all industries. People have no idea at first what they’ll be used for. I seem to remember that in the early days of the telephone it would be used for people to listen to orchestras down the telephone. This was the big idea that eventually became radio. They didn’t think that people would want to have a lot of conversations on the telephone. And texting and mobile phones. Mobile phone companies put texting as a technology onto mobile phones as an incidental add-on thinking that it wouldn’t be at all significant. And its success would catch them by surprise. So its not surprising that internet entrepreneurs had no idea at the start what would work. And I suppose what you could say was that went through a period of mass experimentation with most of the experiments failing. And out of it we’ll work out what does work. But in the meantime we lost an awful lot of money and perhaps developments have been put back because right now there’s no money available for doing that kind of stuff.

3AM: Looking ahead, what do you think the Internet will be doing in the future?

RC: The big excitement now is the mobile Internet – the ability to take your information wherever you happen to be. There are two things that are going to happen to the Internet – its going to get much much faster – Broadband everyone is talking about although nobody quite knows what applications will excite people – and secondly its going to go mobile so the idea is that we’ll all be carrying devices that will bring us information wherever we are. The great mystery is what kind of information do we want. And the one application that has worked on the internet and shows no sign of not working, is e-mail. It was almost dismissed during the bubble as something rather simple that didn’t matter that much and it’s the one thing that people have wanted throughout. It’s just simple communication, instant messaging. It’s making money indirectly in that it’s driving people to be connected and to use it. The great problem has been that during the internet bubble everything was free – companies decided that the way to move and to gain territory fast was to give stuff away. So newspapers, music, whatever, they were free on the internet and now the huge debate and head banging is about how the hell do you make people pay for stuff. It’s really difficult because having been used to getting stuff free people are now rather unwilling to pay for it. This in a way makes the mobile internet seem rather better business proposition in that people have grown used to paying for stuff in the mobile world. You know, every time someone sends a text message they wrack up a ten pence charge. Which is great money for the mobile phone company. The whole definition of the internet will become more and more difficult to come to terms with. Is the internet high speed texting and sending pictures with mobile phones – you know, what is the internet?

3AM: How is it affecting the world of media and news?

RC: This is another area where expectations have been really dashed. What we were told was that the old media – the traditional powerhouses – big broadcasters and Fleet Street newspapers would be destroyed by the internet – and it hasn’t happened. This rush to put information on line – and you’re obviously part of that – one has to be sceptical about it. When the Drudge Report started to break the Monica Lewinky story that was seen as the beginning of this huge explosion of on-line information which would be where people would go to find unusual stories. In Britain that certainly hasn’t happened. If you ever see news broken it will by the traditional media. What is amazing is the sheer durability of newspapers. Newspapers were supposed to be killed, first by the radio and then by TV and then by the internet. And if we’re looking for where most of the original journalism is done in Britain it is done in newspapers. A lot of it is about how you trust your content. Do you trust something you read on the internet ? Mostly not. Unless it comes from a brand. So what we’ve seen is far from the new guys taking over it’s the old guys reasserting their power through sites like BBC online.

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