Review of “Optical Illusions: Lucent and the Crash of Telecom” by Lisa Endlich

Recently I finished Optical Illusions: Lucent and the Crash of Telecom. Optical Illusions is the first book that I read on the Kindle app on my wife’s iPad, and it was a very pleasant reading experience. It also was a good reading experience, forming a sort of triptych on the history of Bells Labs (along with Crystal Fire and Inside the Crown Jewel. Lucent, for those too young to remember, was perhaps best known for its logo, the coffee cup stain of quality.

The first thing to realize is that Lucent Technologies was built on a lie. The original tag line was “Bell Labs innovations,” the original advertising emphasized continuity with Bells Labs, but Lucent was not Bell Labs – it was a renamed Western Electric, a ‘thick necked,’ unimaginative legacy equipment manufacturer. The company line, that Bells Labs was too expensive to maintain, was nonsense — Bell Labs was a tiny fraction of the company’s overall expenses, and Lucent lost factors of 100s more on bad acquisitions than they did on Bell Labs.

Rather, the mission of Lucent’s leadership was to turn Lucent into any other kind of company than what it was. The leadership was aware that Lucent’s core business was a dead end, and they had no interest in using growth-oriented parts of the company (such as Lucent Microelectronics or Bell Labs) to develop new products over time. Lucent printed bubble-value stock in an effort to buy other, profitable, companies, in the hope it could use money the market was giving it for free in an effort to become a viable company.

It failed. The company, which increased its value ten-fold by the peak of speculation, eventually lost 99% of its top value. The CEO was fired, and lives and research careers were crushed. America lost a top line research organization, Lucent shareholders lost their savings, and the bubble burst.

Lucent is no longer an American company. Alcatel-Lucent it now owned by the French. The Telecom bubble has not. And because Lucent did not have a friend in Tim Geithner, it lost almost all its money.

The end.

6 thoughts on “Review of “Optical Illusions: Lucent and the Crash of Telecom” by Lisa Endlich”

  1. A long time ago, I loved their Managed Firewall System (“The Lucent Brick”). I could never seem to get Lucent to actually close a sale on it and went with Checkpoint based devices instead.

    Years later I was setting up a managed security service for an NSP and was looking to buy 100-2000 firewall/VPN devices over three years. I couldn’t get them to send me a unit for a testing/evaluation bakeoff with a few other vendors. In my mind, they were the default “winner” I was going to judge other devices against. The sale was theres to lose. They decided to not even try. Oh well.

    Nowadays, because of my past experience with the sales organization, I would never under any circumstances go with a Lucent product.

  2. What year was this in?

    Much of Optical Illusions concerns the sales force, so I am wondering if your experience overlaps with the book…

  3. Hello. I’m sorry to bother you like this. I have a question for you about blogspirit, can you let me know your e-mail?
    thanks.

  4. Purpleslog,

    The first exp would coincide with chaos in Lucent marketing. The company was breaking SEC rules by creating unwritten side-contracts with customers to inflate earnings. This was partially necessitated by the non-integration of acquisitions and the collapsed IT structure of the combined firm, which meant that occasionally customers would receive multiple competing Lucent offers, occasionally Lucent would lose track of the customers, etc.

    Paulo,

    To answer your question, I first downloaded the site with SBWCC, and then wrote a perl script to extract the posts and comments into a SQL command script that I uploaded, and injected into the wordpress database.

    Some people simply maintain the blogspirit site ‘as is,’ and simply post new stuff elsewhere.

    I met some fun people on blogspirit, but was very happy to get out.

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