The Fatal Blindness of Unrealistic Expectations

I wrote the article below in January 2013, but never published it. The strong response to last week's post on the hubris and hype of Silicon Valley, as well as this recent interview, jogged my memory and inspired me to dig this out of the mothballs. I was pleased to see how relevant it remains 2.5 years later.

My old employer, Yahoo!, has been in the news again of late.

Its latest CEO (and former Googler), Marissa Meyer, is currently at the World Economic Forum in Davos, Switzerland, where she has just given her first televised interview detailing her strategy for the beleaguered web giant.

I wish her and the current team at Yahoo! well with their plans, I really do. The saga of Yahoo!'s descent over the past decade was heartbreaking to watch and experience from the inside. I'd love to see the company find a way to become a leader again.

But I don't have faith. 

In my opinion, the company can't be "fixed." At least not the way the tech pundits and the past parade of Yahoo! CEOs have touted it can.

Why? Because of a congenital failure to define its identity, paired with a chronic refusal to be honest with itself.

I get asked a lot for my opinion regarding Yahoo!'s fall from grace. I believe the seeds of its failure were sown from the beginning, and I've come up with the following analogy to make it as intuitive as possible. It all starts at the very formation of the company.

The Importance of Clear Vision

First, look at Google. When the founders Sergey Brin and Larry Page first started collaborating, the Internet had been around for a while and they were insightful enough to realize that the data on the Web was growing exponentially. They reasoned that the company who made it possible to sift through all this data and find the most useful content, when needed, would create immense value.

So, they designed the Google platform from Day 1 to optimize around their core goal: "to organize the world's information and make it universally accessible and useful." This gave them a maniacal focus that enabled them to target talent, refine strategy, and prioritize resources. To this day, while there are many other businesses that Google has become involved in (from alternative energy to self-driving cars), everything revolves around first making sure that the central mission is protected and enhanced, and then leveraging the core platform to do ever more innovative things.

In this way, you can think of Google as the Borg of the Internet, following their mission of technical perfection with a methodical, measured dedication; unwavering in its focus.

Now, look at Yahoo!. Yahoo! is the Internet's Jedd Clampett.

If you don't know the story, the founders Jerry Yang and David Filo shared a trailer while graduate students at Stanford in the early 1990s. (It was literally a trailer. Stanford's graduate campus housing has improved much since then.) The graphical pages of the World Wide Web were just emerging, and as interested computer science students, David and Jerry spent a lot of time exploring them. As the number of Web sites multiplied, they created a simple directory – really nothing more than a page of bookmarked links – to help them keep track of the growing number.

This was the Internet's equivalent of Jedd Clampett missing a varmint with his shotgun, only to find "a-bubblin' crude" spilling out of the earth.

As simple as this directory was, nothing like it existed yet. So word got out, and people started flocking to it in ever-greater numbers. Pretty soon, the founders realized they had a phenomenon happening before their eyes, and they were savvy enough to enlist some seasoned help in structuring a business around it and monetizing it through advertising.

Well, the rest is history. Yahoo! experienced mind-boggling, stratospheric growth over the next several years. For a period of time for most people,Yahoo! WAS the Internet. For everyone else, it was the Internet's front door: occupying the best real estate within the new virtual universe of the World Wide Web.

But the key element to note here is that there was no fundamental vision or guiding mission that preceded Yahoo!'s creation. The company simply sprang into existence; a "happening" created by an unforeseen, rapid and gargantuan transmogrification of the world's analog audience base into digital 'users'.

And it's because of this lack of central identity that Yahoo! has floundered. What is Yahoo!? is a question that has plagued its executives since before I walked in the door in 2001. You would not believe the amount of manpower, brain cycles, and advertising agency dollars that have been thrown at answering this – and yet no enduring answer has emerged.

The Cost of Willful Blindness

Without knowing what its "core" is, Yahoo! hasn't known where to put its focus. It has tried to do everything, and as a result, its diluted efforts allowed pure-play competitors to claim the dominant position in each of the important verticals that it wanted to win. Google became the dominant player in search (helped along in its early days, ironically, by Yahoo!'s patronage). Ebay won auctions. Amazon won online retail. Facebook dominates social media. YouTube cornered the online video space. The list goes on...

As the early 800-lb gorilla, Yahoo! could easily have claimed any or all of these industries. But it didn't. And I know why: Unrealistic expectations.

I personally was involved in several of the never-ending attempts to resolve this need to define Yahoo!. Each one ended up devolving into inaction – or worse, producing some declarative statement of vague pablum that only made folks even more confused. (Examples: Yahoo! is a "life engine," Yahoo! is "the premier digital media company," Yahoo is "you.")

The main reason for the failure to craft a clear vision is that the executive staff was unable to imagine giving up on major existing lines of business, even if there was no clear strategy for why they existed. Because there were so many directions Yahoo! could go in, you could make a compelling reason for why Yahoo! should retain its foothold in any multi-billion-dollar market segment. So again and again, after all the pontificating, the Yahoo! executive team would convince itself it could indeed be all things to everyone.

Of course, having a clear identity means you know what you are and you know what you AREN'T. That second part is easily as important as the first. It's what gives you the discipline to say "no." To look at alluring market opportunities and pass on them, knowing that your core competencies aren't a good enough fit. To avoid wasting time and treasure chasing a losing game.

Without this clarity and discipline, Yahoo!s diluted and aimless efforts have resulted in its services becoming less and less relevant as the Web has evolved and matured.

I used to believe very passionately that the company could be turned around. But as time went on, I lost that hope, for two reasons.

First, I witnessed enough changings of the executive guard to conclude that the courage and ruthlessness required is simply not likely to happen. There are business lines at Yahoo! that are like Tolkien's Ring of Power. Every new CEO thinks they can withstand their allure as they unsheathe their cutting sword, and then soon finds themselves jealously protecting their "precious".

The second is that too much time and damage has occurred. Yahoo! has been rotting for years, resulting in unwieldy infrastructure, underperforming talent, poor partner relations, and consumer apathy. If the new CEO was suddenly bestowed from above with the "next big idea" for the Internet, why would you possibly want to saddle that gift with all of the albatrosses around Yahoo!'s neck? She'd be much better off starting a new company from scratch, with the right talent, the right culture, the right platform, and a clean shot at defining the brand.

The Hard Truth

So why am I going on so much about a struggling tech company?

Because I read this today from Robert Reich:

Brace yourself. In coming weeks you’ll hear there’s no serious alternative to cutting Social Security and Medicare, raising taxes on middle class, and decimating what’s left of the federal government’s discretionary spending on everything from education and job training to highways and basic research.

“We” must make these sacrifices, it will be said, in order to deal with our mushrooming budget deficit and cumulative debt. 

But most of the people who are making this argument are very wealthy or are sponsored by the very wealthy: Wall Street moguls like Pete Peterson and his “Fix the Debt” brigade, the Business Roundtable, well-appointed think tanks and policy centers along the Potomac, members of the Simpson-Bowles commission. 

These regressive sentiments are packaged in a mythology that Americans have been living beyond our means: We’ve been unwilling to pay for what we want government to do for us, and we are now reaching the day of reckoning.  

The truth is most Americans have not been living beyond their means. The problem is their means haven’t been keeping up with the growth of the economy — which is why most of us need better education, infrastructure, and healthcare, and stronger safety nets.

He goes on to make the argument for a wealth tax on the richest Americans to pay for that education, infrastructure, and healthcare.

I'm not going to tackle the wealth tax concept here (though I have strong opinions). But I want to point out that I see the same blindness to reality, the same unrealistic expectations, in Reich's commentary as I did in Yahoo!.

Reich mentions but then dismisses the only point that matters: America does not have the wealth to meet the entitlements it has promised. Nor can it sustainably meet its operating costs.

Why is that? Because we, as a society, have very much indeed lived beyond our means. By building up such a tremendous amount of debt through our profligacy that a small rise in interest rates would be catastrophic. That our children and children's children will be "paying backwards" for our largess, unless some debt-clearing event transpires (which I think will).

Being unwilling to acknowledge this unpleasant but fundamental truth dooms any attempts to avoid it, via wealth redistribution or any other means. It's the same flavor of willful ignorance that caused Yahoo! to convince itself it could claim all mountaintops until it eventually begrudgingly realized it wasn't summitting any.

There were many times in my years at Yahoo! where I would listen to the "rah rah" all-hands presentations by the executives and walk away disconcerted. Despite the assurances of the great talent within the company and the wonderful ideas currently on the drawing board, it increasingly appeared that they were not admitting the obvious: The strategy was flawed, the company was failing, and radical change was needed if we wanted to succeed again.

That's exactly how I feel when reading Reich's piece. If this is the logic that our country's leaders are using in their decision-making, then Houston, we indeed have a problem. Having seen this movie play out in the smaller Yahoo! microcosm, I have no appetite for watching a sequel at the national level. But I fear that's what we're in store for.

I don't know how much influence Reich has these days, as he's not working in the current Administration as he did for three other Presidents (Ford, Carter and Clinton). But from the current fiscal and monetary policy we're pursuing, it sure seems like his mindset is not that far from those currently in DC.

So I find myself reflecting on how I reacted when I concluded that Yahoo! wasn't going to change its course. I decided I was going to need to change mine, instead.

I invested in self-discovery to identify work that was meaningful for me. Fulfilling work that I'd be happy doing no matter the compensation. I cut the cord, resigning before I knew what I would do next. Staying on would only delay the hard work I'd need to do to create my future. I started developing the skills I'd need for my new chosen profession. And I began to tap the power and goodwill of other people who could help me (and whom, in turn, I could help back).

Seems to me this is good advice for our national predicament. 

The ride from here is likely to get bumpy as reality punctures our leaders' unrealistic expectations. But if we, as individuals, invest in living authentically, working hard, and fostering supportive community, we'll enjoy the benefits of a resilient life regardless of what transpires.

This is a companion discussion topic for the original entry at

Business 101:
What's your mission? Write it down. Spend the rest of your time referring to Chapter 1 often.
Government 101:
Get reelected. Spend the rest of your time convincing yourself you are doing things for the good of the people and the fact that you and your friends are getting rich as a by product is some kind of weird coincidence…


Thanks for dusting this piece off and showing it to us, Adam.
It got me wondering, if you had happened to have got on at a more functional tech company, if you would have had enough of a kick in the pants to change direction in your life and end up where you are today. Maybe right now you'd still be at a Netflix, which wouldn't be terrible, but I bet you wouldn't be as happy as you are in your current life. Just speculating :slight_smile:

The fatal mistake but sadly prevalent in the fiat world "convince itself it could indeed be all things to everyone."

I, for one, am ecstatic that  both you and Chris realized "something" was off kilter with our present situation and have done us a tremendous service by escaping the corporate treadmill and then running this site.

You are 100% correct for pointing out that people have unrealistic expectations about future financial directions.

However, I think you need to see another side of this.  Reich is representing the lower class vision of the economy.  In this regard he is acting as a politician, more than as an economist.

IMHO we are looking at the death throes of a debt backed, paper money system and it is very similar to playing musical chairs.  Reich is fighting for the slower and less coordinated people to get access to some of the chairs.  Otherwise, the Predator class naturally ends up with every chair.  There is always more money for "Defense", more money for Israel, more money for "Homeland Security", and if there is another bank issue, there will be more money for that-again. There will always be more money for the well connected and well represented until we hit the wall.

My point is Reich is providing a little bit of balance in the political spectrum, probably knowing full well that one day this will all end up really ugly. No politician would dare tell people the economic truth, as we see it. If such a politician appeared on the scene, and was taken seriously, he or she would be dealt with as a severe threat to the status quo. 

Yahoo is a good analogy because nobody in the circles of power dares cut anything in the US state–even programs which have failed or are counter-productive continue on as they are jealously protected by those skimming vast wealth from their existence.  Look at student debt–nobody who is a 'serious person" like Reich has any "solution" that actually derails any players' gravy trains.  Ditto the F-35 aircraft, a multi-billion $ fiasco that can't be canceled no matter how costly it is or how inadequate the aircraft.

I agree with you assessment of our predicament Charles and  I have finally arrived at a level of acceptance with regard to governance. It has taken awhile to get here but the human condition seems to speak volumes about our ability to perceive and act vs. experience and react.  The former quality, as in economics, has high value and is relatively scarce while the latter is cheap and can be found in abundance.
But the change that is underway is inexorable although difficult to see. I was on my deck last week reflecting on how to describe the rate of change and we were enjoying the clouds and the sunset. It was really remarkable how the patterns and light changed and yet were happening slowly enough that you could not see it. But when you looked away for a short period of time and then checked back, the sky and light were completely different.

That's my analogy for describing how fast the change is happening. Governments will only see the storm clouds after lightening has struck their wallets!


It goes without saying that people in politics - even when well-intentioned - aren't "showing all their cards."
And Reich is certainly well-intentioned.

In a related thought… Although Hillary Clinton recently told Stephen Colbert that she would let the big banks fail "if" another crisis comes, a Rolling Stone article by Matt Taibbi reveals that she is actually onboard with Goldman Sachs and that her "comprehensive plan" only gives regulators the "ability" to enforce things - in other words, Hillary's plan has no automatic mechanism to punish the banksters instead of the taxpayers when things go down the tubes.

So if you are a democrat, and you don't want another bankster bailout, you should be pulling for Bernie Sanders. I haven't researched the Republican candidates on this issue, maybe somebody has some input on that.


Hillary not siding with the TBTF banks?  Laughable.  I don't think Bernie could stop the corruption either-even if he'd like to. No Republican candidate has mentioned anything regarding the banks that I know of with the possible exception of Rand Paul. The stench of corruption and the power of influence only step aside when the people are in the streets and demand change.  I wish I could be more optimistic.


Um, unless I read it incorrectly he was pointing out that Hilary has flip-flopped on this issue in typical politician method.

Well, the most accurate way of saying it is that Hillary was "trying to have it both ways."
If you're on The Late Show you might actually get away with taking credit for something that you won't follow through with. Since Colbert wasn't able to hold her accountable I felt I was doing my part by pointing it out here.

Then again, most of us are well informed and rather cynical about TPTB. So maybe there was no need for me to make that post. 

Really good article!
I agree, that many people could be "blind", that's true. And do not matter what level of education they have. And of course, for us all would be better, that we have less "blind" people.

But how to change it?

I think that we all need to play more games and especially where are more then two players or teams. Because just two players or teams, it is something unusual in life, always are others, maybe at some time they are passive, but they are in play, they just wait their time to act. 

 And we need to create more games, which are more similar to real life.

Great question, Kevin.
Had I been at a better run company, especially if it offered a stock option rocket ride a la Netflix, I'm sure it would have taken me longer to hit the eject button.

But I'm pretty confident I would have eventually ejected anyways. Just with a pile of money this time…  :)

I recorded a podcast interview with the Johnson O'Connor Research Foundation a few hours ago, and it brought back strong memories of the inner angst I lived with before deciding to leave Silicon Valley. My heart is simply not in the game that is played there, and my head was very anxious about how non-resilient the area is.

So while a pile of money would have been nice, and maybe worth (financially) delaying my transition by a few years, I don't lament that things didn't play out that way. As my wife will tell you, the difference in my self-happiness is night and day compared to my pre-Peak Prosperity days. After nearly two decades of questioning my purpose and contributions, the past 5 years have felt like I've been truly "alive". Not sure there's a price high enough to put on that.

My comment was an awkward way of agreeing with you. As you can probably discern, I am really cynical when it comes to political bluster.

Snowden revealed some outrageous practices and constitutional abuses and the Obama administration - yes the same one that has not managed to bring a single criminal charge against a single senior banker - wants to charge Snowden with espionage.
It bears repeating; US Bankers committed literally hundreds of thousands of serious felonies and not one was ever charged by the Justice Dept. under Obama's two terms.

Recently the White House spokesman said "The fact is that Mr Snowden committed very serious crimes, and the US government and the Department of Justice believe that he should face them.”

Well, either you believe serious crimes should be prosecuted or you don't.

Pick one.

But to try and be selective about it all just makes one something of a tyrant.  Wielding power when and how it suits one's aims instead of equally is pretty much the definition of tyranny (which includes "the unreasonable or arbitrary use of power")

However, the EU has decided to drop all criminal charges against Snowden showing that the US is losing legitimacy across the globe by the day.

EU parliament votes to 'drop any criminal charges' against whistle-blower

The European parliament voted to lift criminal charges against American whistle-blower Edward Snowden on Thursday.

In an incredibly close vote, EU MEPs said he should be granted protection as a “human rights defender” in a move that was celebrated as a “chance to move forward” by Mr Snowden from Russia.

This seems both right and significant.  Significant because the US power structure must be seething.  It means that the EU is moving away form the US on important matters, and that's significant too.   Right because Snowden revealed deeply illegal and unconstitutional practices that, for the record, went waaaaAAaaay beyond the so-called 'meta-data phone records' issue.

And why shouldn't the EU begin to carve their own path?  Their interests and the US's are wildly different at this point in history, especially considering the refugee crisis that was largely initiated by US meddling and warmongering in the Middle East.

At this point, I would say that the US has lost all legitimacy on the subject of equal application of the laws, and cannot be trusted when it comes to manufacturing "evidence" that is used to invade, provoke or stoke a conflict somewhere.

The US is now the Yahoo! of countries; cheerleading our own self-described excellence and superiority at everything when the facts on the ground say something completely different.

And this "serious crime" was committed by Snowden because he saw it as the only viable path to revealing a systematic pattern of crimes by none other than our own federal government that are so serious that they threaten the basic founding principles on which our democracy was founded.

[quote=Quercus bicolor][quote=cmartenson]
Recently the White House spokesman said "The fact is that Mr Snowden committed very serious crimes, and the US government and the Department of Justice believe that he should face them.”


And this "serious crime" was committed by Snowden because he saw it as the only viable path to revealing a systematic pattern of crimes by none other than our own federal government that are so serious that they threaten the basic founding principles on which our REPUBLIC was founded.

You know how the old saying goes "truth is treason in the empire of lies". I'm a staunch libertarian, but I wasn't always that way. Before that I spent most of my 20's in Special Operations wanting to 'kill bad guys who attacked us' on 9/11. It wasn't until my last deployment that I got ahold of Dr. Ron Paul's books and dug through them and realized his viewpoint suddenly made much more sense than anyone else's. Not only did it make much more sense, but it was based on Natural Law and the founding principals of our country.
A lot has been made of the fact that Snowden contributed money to Dr. Paul's 2008 presidential campaign and that this was an obvious tell that he was really an undercover (insert whatever words the media used - traitor, anarchist, russian spy, etc.). The part that I find troubling is the fact that Snowden revealed to the world that we are all being watched, probably not in real time, but if they ever want to review the 'tapes' they can see what we do essentially every minute of every day. That's BIG news to get out to the citizenry. If you've got access to that kind of data, you don't want that getting out, but here's the kicker - Very few in this country today even care. Nothing in this country has changed that I'm aware of. GCHQ still spies on us and passes the info to the NSA. The NSA still spys on everyone and the Brits and passes the info to GCHQ. Austrialia and NZ  and Canda still spy on whoever and pass the info on to whoever wants it. It's craziness. 

At the same time, as Chris and others have pointed out, we're bombing people (ISIS/Al Nusra/AQ) we supported ('moderate rebels) before we bombed them (AQ)  after we bombed Sadaam and invaded Iraq. Someone please tell me the strategy other than the "7 countries in 5 years plan". Yup, sounds a lot like Yahoo!. 

I'm looking forward to Christmas this year because I get to spend 5 days with my wife's family again. My father-in-law is a smart man, but thinks the government is still all powerful and has everything under control. It should make some interesting conversations and debating. 

Thanks for the article Adam, interesting parallel between TPTB and Yahoo!.

should refer back to its mission statement more often.
"Liberty and Justice for All"
Otherwise, this experiment is not going to end well.


And yes, sticking to one's principles and mission statement is something that organizations should do.