DIRECT HIT: The Titan
OF ALL THE RASCALS who operated in U.S. business during the 19th century, none had greater impact than Jay Cooke. His banking company, Jay Cooke & Co., went down owing millions, which led to the Panic of 1873 and to a depression that lasted for several years.
But there’s no need to feel jealous. We moderns have our own rascal named Jay – Jay Walker. And while he has not yet caused a depression, his company, Priceline.com, has had problems that in sheer financial terms would have staggered Jay Cooke.
Walker himself is now off the board, and we will no longer be “shat upon by William Shatner,” to steal a phrase from Herschell Gordon Lewis. And it was all so utterly predictable.
First, it’s clear in hindsight that there was an error in the initial concept. This may be the era of customer-centric marketing, but companies in some sectors may not be ready to give that much control back to the customer.
Then there is Walker’s track record. His whole career can be summed up in the answer he once gave when asked if he was a millionaire: “On paper maybe. Don’t ask for a check.”
Long before Priceline, the word on Jay Walker was that he was good at creating things but dismal at running them.
For example, he sold advertising space in catalogs. (At least one client sued over an alleged lack of results.)
He arranged for catalogs to be sold on newsstands (a world-class fiasco in which UPC codes fell off and one ladies’ apparel catalog ended up on a rack next to Penthouse).
He hooked up with TWA to offer airline upgrades through catalogs (an even more bizarre episode in which Walker and his catalog clients, like Lillian Vernon, ended up being sued for “racketeering”). The first place Walker’s biographer should visit is the federal court archive.
And even now, little glitches keep popping up that make you wonder if Walker can run a company. Walker Digital, another of his enterprises, has been sued by the state of Connecticut for alleged employment law violations, and it has had other problems.
Then why are we all waiting so anxiously for Walker’s next brainstorm? Because it’s bound to be something obvious that nobody has ever thought of. It pays to remember that some of Walker’s schemes made big money for the participants. One early success, a joint venture with Federal Express to ship catalog orders overnight, revolutionized the mail order business. And many happy people cleaned up on Priceline stock options two years ago.
The highest compliment you can pay someone these days is that they “think out of the box.” Despite his spectacular flops, Walker does that. And, like Bill Clinton, he’s not ready to leave the stage.
