Depths of Denial, Cries for Help

This industry has major denial issues. Serious problems. Bigger problems than even Oprah could solve.

The problem is not that the telecommunications industry is in really bad shape – most of us already know that. The problem is that too many people bustle about in a constant state of denial, failing to acknowledge that the industry has collapsed. We can help educate them and make them well. Let’s start today! I’ve compiled a list of things to watch for in such cases. I hope it can be used to help readers spot warning signs and early symptoms – a handy guide to industry denial, if you will.

    1) Debt Denial Syndrome This syndrome most commonly afflicts executives at large telecommunications carriers. In its formative stages, it begins something like this: Overeducated accountants explain complex new financing options as if they are forms of art. There's a grim fascination in the way some carriers speak of their debt as if it were a personal treasure: “Hey, have we got more fancy, complicated debt than anybody, or what?!”

    Be careful when dealing with DDS sufferers. When you actually do some homework and point out how much this fancy, complicated debt costs and how the combination of interest payments and shrinking revenue are resulting in massively escalating losses, the spinmeisters at such carriers are prone to angry outbursts: “Hey, don’t talk about our debt as if it’s something bad!” they say. “That’s not fair!”

    Just about everybody in the telecom carrier market has demonstrated these symptoms. For some strange reason, it is very hard for anybody with this syndrome to realize they are losing truckloads of money.

    I’ve thought of an interesting experiment that might bring to light the consequences of such behavior. Next time you’re out with a new date, try this line: “Hey, did you know I’ve run up a $38,000 bill with Visa?” See how far it gets you.

    Debt Denial Syndrome often evolves into...

    2) Deluded Bankruptcy Syndrome Also known as What, Me Worry? Why can nobody admit that filing for bankruptcy is bad? Period. If your team scores fewer points than your opponent in a basketball game do you say, “On many levels, we’ve actually won!”

    This is a common affliction that strikes nearly all outgoing CEOs of bankrupt companies. It becomes particularly acute in the case of venture capitalists who back such companies. Admit you lost, for goodness sake! What’s the big deal?

    Take Jerry Parrick, the former CEO of Yipes. Parrick spoke of filing for bankruptcy as if it were like going to the corner store to pick up some milk. "Bankruptcy gives us another vehicle with which to restructure our balance sheet,” said Parrick. A week later, he was unemployed. Restructure that!

    Here’s a handy rebuke for somebody afflicted with DBS: “Hey, if it’s so great, why is the stock worthless?”

    Common warning sign: Look for shocking displays of wealth and name-dropping in the face of financial crisis. Hobnobbing in Beverly Hills with Hollywood celebrity friends is a sure sign that this syndrome is entering its last stages, which are often crippling.

    3) IPO Denial Syndrome This syndrome is common among bubble-era optical IPO companies. Typically, the onset of the syndrome precipitates the delusion that just because you had an IPO, you are massively successful. Wrong!

    Victims of IDS have never quite adjusted to the fact that an IPO is, in fact, an event in which you take millions of dollars of other people’s money. You’re supposed to use that money to make more money and give those investor folks something back. If you burn other people’s money – rather than making more money with it – those investors get very, very angry. It’s amazing how few people can grasp this basic concept: Public investors aren’t often thrilled by the fact that you’re flying a Gulfstream bought with money from their 401Ks.

    This syndrome is quite common, found among the executives at just about any optical systems startup that has completed an IPO (but still hasn’t earned a penny of profit).

    Proposed solution for dealing with people afflicted by this syndrome: Tell them to just shut up and make some money. In such a scenario, recovery is full and prosperous.

    (A dangerous and potentially lethal financial situation results when you combine this syndrome with syndrome #1.)

    Common warning sign: Long strings of expletives laced with references to the stock price (commonly confused with Tourette's Syndrome).

    4) Engineering Denial Syndrome Here's the good news: There's proof that the various denial syndromes can be fought with a little dose of economic reality.

    At one time this Engineeering Denial Syndrome was widespread. It arose when a superbly financially engineered company built a crack marketing staff, spent all sorts of VC dough on neat parties and staff, charmed the trade press into writing puff pieces... only to realize that they had forgotten to develop a product, or worse yet, that somebody might not want to buy or use their nonexistent product, even if they had successfully developed it. This was by far the most common affliction in the industry. Studies show it struck more than 70 percent of optical networking companies.

    These days, many of the victims of such syndrome have moved on to work in the fast-food industry. In other cases, the victims have become aware of their EDS and have sought rehab. There is mounting evidence that former victims can go back to work and lead productive lives after treatment. For example, take a certain former IPO startup that has gone quiet on the marketing front and is now back to working on its product with customers.

    Still, EDS exists in pockets, and several startups remain plagued by this crippling disease today. And even if the threat of an EDS epidemic has largely waned, it's sure to emerge in the next VC investment binge.

    Common warning sign: Look for absurdly effervescent comments in the face of obvious bad news: “I think the fact that our next-generation optical crossconnect burst into flames and killed three people is a serious demonstration of our customer traction!”
In conclusion, I’d urge readers use this guide to watch for, and possibly head off, potential cases of denial. These folks are our colleagues, and they need our help! Denial is not helping the industry. Let’s lend them a hand: Stamp out denial and get us all on the road to recovery!

— R. Scott Raynovich, US Editor, Light Reading
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Danniella 12/5/2018 | 6:23:51 PM
re: Depths of Denial, Cries for Help The real question is what syndrome is the preferred. I like the marketing syndrome where people are posting shit in their comments even here on LR.

20 comments in this post and 10 of them contains shit like "My sisters business is not profitable and i think it never will be! Told her never to become a beautician and kosmetolog" with an embedded link to an obscure european or india website.

The other syndrome is the "Im the best i know it all syndrome" where nobody actually takes the time to read and understand where the other guy (or girl) is coming from and what he is trying to relay.

The shear bullshit of messages and comment that are really SEO related and have no meaning is incredible.

I rest my case!
fieldengineer22 1/25/2018 | 5:26:41 AM
Re: Depths of Denial, Cries for Help Nice article Scott!

So great to hear various symptoms which are helpful in industry denying.

I would like add another syndrome of  find the engineering talent which makes the industry complex because of  finding the field engineer with right skills, in the right location, and who is completely adept and accessible now is getting to be harder.

Platforms like Field Engineer and others trying to bridge this gap but still there is lot of mismatch between the demand for talent and supply.
dietaryfiber 12/4/2012 | 10:40:13 PM
re: Depths of Denial, Cries for Help
Buy out Denial Syndrome (BDS) - Cisco (because Nortel and Lucent are too messed up at the moment) will come in and buy our cool new product for lots of money and save us. This has a lot to do with Engineering Denial Syndrome and its cousin CLEC Denial Syndrome (The RBOCs must buy products designed for the CLEC's right?).

Warning sign: Your CEO starts looking for strategic alternatives.

IPO Denial Syndrome II (IDSII) - I am a startup in telecom and think I can IPO while losing money. Alternatively, my IPO will be bigger than a $100M. This is related to people thinking that products are the problem at the moment and that channel is of little value. Also, people forget that they are going to be dilutive if they are not making money. This is related to Synergy Denial Syndrome (Layoff) where people hear about Synergy (read Ciena and ONI) and forget that the only way to cut OPEX meaningfully is to lay off people.

dietary fiber
optigirl 12/4/2012 | 10:40:12 PM
re: Depths of Denial, Cries for Help # 1, The Blame Game:

The reason we are not doing well is the fact that our customers are cutting back. The fact is that people are still spending money. Ignore the fact that we overestimated the demand for our products (with a little bit of help from the analysts we paid off) or that we didn't listen to what they wanted or that we have really proved that we don't know how to run a business......

#2, See Corvis.....

Nice article, Scott.
StartupGrunt 12/4/2012 | 10:40:03 PM
re: Depths of Denial, Cries for Help Man you guys are all so MEAN!
let-there-be-light 12/4/2012 | 10:40:01 PM
re: Depths of Denial, Cries for Help The exact inverse of Engineering Denial Syndrome:

Market Denial Syndrome.

Warning signs:

Great success in getting papers published at OFC, especially postdeadlines...

Firm belief in "build it and they will come.."

Extremely famous experts on payroll who think they are still at Bell Labs, or similar institutions..

It takes more than one hour and at least 200 equations to explain the advantages of the system ...

OK, I think I've said more than enough.
filet mignon plus 12/4/2012 | 10:39:51 PM
re: Depths of Denial, Cries for Help Not suprisingly, you left out yet another:

Optical Tabloid Journalism Syndrome...as a result of repeated editorial over exposure to Engineering Denial Syndrome at Lightreading, a legit startup with shipping products and real customers comes to visit Lightreading, only to get needlessly trashed by a brash young jr editor of limited knowledge and experience, leading to much agony and wasted energy for the company, who is a potential part of an industry that needs to grow in a healthy way in order for you and others in the telecomm ecosystem to survive.
bitdropper 12/4/2012 | 10:39:47 PM
re: Depths of Denial, Cries for Help "Optical Tabloid Journalism Syndrome...as a result of repeated editorial over exposure to Engineering Denial Syndrome at Lightreading, a legit startup with shipping products and real customers comes to visit Lightreading, only to get needlessly trashed by a brash young jr editor of limited knowledge and experience, leading to much agony and wasted energy for the company, who is a potential part of an industry that needs to grow in a healthy way in order for you and others in the telecomm ecosystem to survive."

Jeez! Lighten up, already! This article is great satire. It makes people (some people anyway) laugh at themselves. I'm inclined to believe the benefits of self-deprecation, far outweigh blowing off steam by writing run-on sentences of complaint. I appreciate Scott and LR taking the time to try to find a little humour in this somber industry. And just for the record, LR doesn't even HAVE any Jr. Editors. Come to think of it, they don't have any Columnists, Contributors, or even any Jimmy Olsen-Cub Reporters either. They are ALL Sr. Editors, and I'll thank you to address them appropriately in the future. Otherwise, we'll have to come up with a Pickle-up-the-Butt Syndrome for you, and wave our private parts at your aunties. Phhhrrrrt!
dietaryfiber 12/4/2012 | 10:39:45 PM
re: Depths of Denial, Cries for Help
This leads to the Self-Importance Denial Syndrome (SIDS)

Any startup that believes anything its doing is important for the industry to grow in a healthy way. This is caused generally by overzealous views of its own technology and by the presumption of greatness of it.

Warning Sign: Your company is not profitable.

bitdropper 12/4/2012 | 10:39:43 PM
re: Depths of Denial, Cries for Help "This leads to the Self-Importance Denial Syndrome (SIDS)"


This serious affliction is usually followed by the next stage of SIDS:

Sudden IPO Death Syndrome

Warning sign: While partying in the next room with abandon, you fail to notice that your staff and customers have inexplicably stopped breathing.
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