Download text version HERE

Introduction

The Hypomanic American

The Hypomanic Entrepreneur

The 1990s will be remembered as the age of Internet mania, a time when entrepreneurs making grandiose claims for their high-tech companies swept up millions of Americans with their irrational exuberance, inflating the biggest speculative bubble in history. The idea that some entrepreneurs may be a little manic is hardly new. A Google search for “manic” and “businessman” yields more than a million hits. Entrepreneurs, as well as the markets they energized, were commonly described in the media as “manic.” Yet, until now, there has never been a serious suggestion that the talent for being an entrepreneur and mania, the genetically based psychiatric disorder, are actually linked. Perhaps because I am a clinical psychologist, it was clear to me that “manic” was more than a figure of speech in this case.

I called several reporters who had written profiles of these “manic” entrepreneurs and asked them, “Do you think he really was manic?” None said yes. “Not really manic; not clinically,” was a typical response. They resisted applying the psychiatric diagnosis because the entrepreneurs they had interviewed were boastful, hyperenergized, and zany, but they “weren’t crazy.” And the journalists were right. Their subjects were not manic. They were hypomanic. Hypomania is a mild form of mania, often found in the relatives of manic depressives. Hypomanics are brimming with infectious energy, irrational confidence, and really big ideas. They think, talk, move, and make decisions quickly. Anyone who slows them down with questions “just doesn’t get it.” Hypomanics are not crazy, but “normal” is not the first word that comes to mind when describing them. Hypomanics live on the edge, betweeen normal and abnormal.

For example, Jim Clark, cofounder of Netscape, was described in Business Week by Netscape’s other cofounder, Jim Barksdale, as “a maniac who has his mania only partly under control.”1 In The New New Thing, Michael Lewis profiled Clark as a perpetual motion machine with a short attention span, forever hurtling at unsafe speeds in helicopters, planes, boats, and cars. When his forward motion is impeded, Clark becomes irritable and bored. In his search for the stimulation of the “new new thing,” he quickly loses interest in the companies he founds and tosses them into the laps of his bewildered employees. His Netscape IPO is credited with starting the Internet gold rush. After that it seemed he could do no wrong. When he pitched a new company, Healtheon, a medical Web site, his only business plan was a diagram with five words. His “magic diamond” put Healtheon at the center of four vertices labeled “doctors, consumers, providers, and payers.” That was it. His magic diamond, he claimed, was going to “fix the U.S. health care system.”2 It was going to be “bigger than Microsoft, AOL, Netscape and Yahoo!” As Lewis wrote, “Any other human being would have been thrown into an asylum for thinking such grandiose thoughts.”3 Those who followed Clark had faith in his messianic mission. “There was a feeling that we were about to change the world,” said one of Healtheon’s chief engineers.

Successful entrepreneurs are not just braggarts. They are highly creative people who quickly generate a tremendous number of ideas—some clever, others ridiculous. Their “flight of ideas,” jumping from topic to topic in a rapid energized way, is a sign of hypomania. Consider Bill Gross, CEO of Idealab. Bill Gross’s job was not to build or run companies, but just to think of ideas for them. Idealab was an “Internet incubator.” On Fortune’s cover, next to a picture of a cheerful Bill Gross, was the caption “I Lost $800 Million in Eight Months. Why Am I Still Smiling?” The author, Joseph Nocera, Fortune’s managing editor, begins his article with an unusual mea culpa. He apologizes to his readers for his previous Fortune article that hyped Gross and Idealab just before the Nasdaq crash. He confesses that Gross converted him into a believer:

I believed him because I was dazzled by him. A small, wiry man, Gross had an infectious boyish enthusiasm that was charming and irresistible. He spoke so rapidly—jumping from topic to topic as if he were hyperlinking—that it was hard to keep up with him, and had so much energy he seemed constantly on the verge of jumping out of his skin. He bubbled over with irrepressible optimism.

And his brain! That’s what really set him apart. You could practically see the ideas bursting out of it, one after another, each more offbeat, more original, more promising than the last. The sheer profusion of ideas—and the way he got excited as he described them—was a large part of his charisma.

The reason Bill Gross was still smiling was that his newest new idea was “going to be unbelievably huge” and “revolutionize the Internet.” Eight hundred million. Eight hundred shmillion. Nothing could dim Gross’s enthusiastic confidence.

During the 1990s, I was paying attention to such behavior because I was planning to write a book about religious movements started by manic prophets. But I began to be distracted by messianic movements happening around me in real time, particularly because, as an avid technology investor, I was a member of one—the believers in the new economy. I was even a millionaire on paper for one exhilarating day in March 2000 at the peak of the market, before my portfolio lost 90 percent of its value. I began to suspect I was writing the wrong book.