Thursday, March 23, 2006

Enron and Web 2.0

No Postman on Greenpoint
Originally uploaded by adamelend.
I've been delinquent in my blogging as of late in part because I have been extremely busy with several BrightRED projects, and in part because I have been absolutely absorbed by the book Conspiracy of Fools. Kurt Eichenwald's account of the rise and fall of Enron is captivating, and I've been wearing out my iPod listening to it.

Enron's success was built on the cult. Their ability to dazzle analysts and auditors with accounting backflips made them look invincible, despite sometimes questionable business practices. Eventually, Enron became a company that manufactured accounting backflips, producing no real profits. Of course, the illusion wasn't sustainable, and it all came crashing down.

A technology business without a business model is not a business. Even if it ran raise tons of investment cash. That's the lesson of Enron. It's a lesson that web 2.0 companies should pay heed to.


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