The CDnow Story: Rags to Riches on the Internet
by Jason Olim, with Matthew Olim and Peter Kent
Top Floor Publishing
ISBN 0-9661032-6-2, 237 pages
With a bizarre quirk of timing, as I was preparing this review in the middle of August, CDnow, the entire company, was sold to Bertlesmann, a much larger book and music corporation. I found a well-written account of the deal by following links for CDNW (the stock ticker symbol) at http://quote.yahoo.com, an excellent investment URL. Iâ€™m not sure the link will be live forever, but here it is:
http://yahoo.cnet.com/news/0-1007-200-2466723.html?pt.yfin.cat_fin.txt.ne. You may be interested to do your own research on this â€œrags to richesâ€ enterprise. The story is certainly fascinating.
With a stock price of $2 per share (down from a 52-week high near $20), and their business model struggling to stay afloat, brothers and founders Jason and Matthew Olim did well by selling. CDnow remains an outstanding way to research and purchase music via the Internet, and I wish them well.
Example: while driving over the Golden Gate bridge not long ago, I was enthralled by an exceptional piano rendition of the standard â€œIâ€™m Confessinâ€™â€. The artist, Jessica Williams, was unknown to me, but she REALLY can play. A few minutes ago I looked her up at http://www.cdnow.com, saw a list of her recordings, and read a brief bio by Scott Yanow, my favorite reviewer. I was unable to listen to Real Audio samples on my PowerBook 1400, but that will change when I start using the new My Mac iMac back in Tucson. (See the Nemo Memo in this issue for an explanation.)
Jessica Williams is exactly my age. Oh, how I would like to play piano like she does! I donâ€™t need any new CDs right now for the music appreciation courses Iâ€™ll be teaching this term, but I plan to order at least one of hers from CDnow as a birthday present to myself.
The CDnow Story is a well-written account of Jasonâ€™s passion for music inspiring him and Matthew to create an entirely new type of online store from fantasy to fulfillment. There are so many worthwhile quotes in the text I could let this evaluation run to dozens of pages, but Iâ€™ll spare you that pleasure.
Barely finished with college, these unidentical twins worked around the clock for months from their parentsâ€™ basement before they shipped their first order. Their saga mirrors the early, high-energy years of Internet commerce. Much more than ancient history, Book Bytes considers The CDnow Story to be required reading for all ambitious entrepreneurs, webmasters, and serious students of the truly new economy.
The book is divided into roughly two halves: creating the business and fine-tuning its expansion. Jason is a darn good writer, keeping his momentum rolling through the early period. The lessons learned as CDnowâ€™s success became enormous enabled him to pilot the store into superior customer service and support.
No reviewer can cope with the back-breaking reality of applauding the monumental highs recounted in the text simultaneously with feeling a sobering splash of ice on the neck from CDnowâ€™s competitiveness falling apart. People still need to buy music, and the information within The CDnow Story remains the best Book Bytes has seen on starting from scratch and keeping your dynamic focus.
It is a pleasure to HIGHLY RECOMMEND this book, with a rating of:
MacMice Rating: 4
Peter Kent, publisher and co-author of this title, tells Book Bytes:
It’s a little sad for me, too, to see CDnow going downhill like this. But I don’t think it’s due to a problem with the music store they’ve built — it really is a great store. Rather, they’re simply casualties in a battle for the new economy. It’s not just CDnow that has proven unable to make money, just about every other e-tailer has, too. Amazon’s in trouble of course, as I’m sure you’ve noticed.
The idea, for me, was to write a book about what works and what doesn’t. Yes, there’s some background info about CDnow, but it’s not just a story. (I wish I could have had more time with Jason and Matthew, actually, to make it more of a story.) It’s more of a discussion about business methods online.
Of course considering that they’ve been in so much trouble recently, many will believe that CDnow’s business methods were simply wrong. I think that there’s a broader problem — that investors, entrepreneurs, and venture capitalists created a situation in which to get noticed at all you had to be spending many millions of dollars on marketing … yet they were wrong in believing that these companies could reach profitability soon enough. You can’t simply force a business to success by pouring money in.