I spent several years riding the dot.com rollercoaster in the late ‘90s, at one point working for four companies in four tumultuous years. This story was originally purchased by a tech magazine but it, too, went bust!
It is the natural impulse of all dot-coms to conquer the world, and my company is no different. In our short existence, we have squandered sums that would make the defense department blush: an astounding $50 million, all of it from hopeful venture capital backers. There are no caveats attached to this money, nor any accountability. In the surreal environment of the Silicon Valley, profit is superfluous; speed is the currency of our trade.
As a former magazine editor suddenly charged with editing an e-commerce web site, I find this speed and energy infectious. I am intoxicated by it all, and have some vague send that I am engaged in one of history’s epic land grabs-where the real estate is not terra firma, but the bits and bytes of the Internet.
But I also have these lingering questions: Can I keep pace with it all? Can a father, career changer, and Internet novice find success and fulfillment at a pre-IPO, 24/7 dot-com job?
That is my challenge. That is my story.
July
In my former profession I was a paragon of hard work: the first to arrive, and the last to leave-a steady 10-hour-day man. I was the ambitious young professional on a steep trajectory toward the top of his trade. I managed people 10-15 years my senior. Promotions came with yearly regularity. My salary grew in leaps.
But seen through the peculiar lens of the dot-com world, my job growth has been positively glacial. Here I find myself a relic at 40, being managed by 20-year-old millionaire college dropouts. I am a dinosaur.
The pace is dizzying. All around me, I see lives put on hold in the hope of an early million. In the economic cauldron that is the Silicon Valley, 14-hour days are the norm. Food is subsidized, and beds are supplied in the office to eliminate the need for an actual home. We are engaged in a war, in which the lucky winners can lay claim to a piece of the merging Internet landscape. Seen in this light, the office is our battle station.
Unfortunately, for me these lofty thoughts wither in the face of mundane obligations. I am a father, and a husband, and am accompanied by the usual baggage that comes with that station in life: soccer games, parent/teacher meetings, a mortgage, house chores. From the first, this disparity between my co-workers and me is apparent. Though I am at my desk at 7:30 am, I sheepishly pack my briefcase and am out the door at 5:30 pm-a pitiful 10-hour day.
No one seems to object, but I feel all eyes are upon me as I make the long walk to my car at the end of the day.
August
The mission of our web site is to sell garden supplies over the Internet. But by year’s end, we hope to forge in to any number of other product areas. And why not? Venture capital money continues to fall from the sky at an astounding rate. In our first rounds of funding, we have garnered almost $50 million. In the Internet economy as a whole, close to $25 billion is being invested in startups each quarter. This windfall is accompanied only by these simple instructions: grab as much Internet landscape as possible, as quickly as possible. Any notion of profit is discuss only in the vaguest terms-a mundane concern that will be left to future generations of management, presumably after we have departed with our millions.
So profuse is the funding that, if any task must be done more than three days in succession, we simply hire someone to do it full time-at a six-digit salary. Every invoice is blithely signed by accounting, with hardly a glance at the figure. We don’t just hire an ad firm; we hire the best ad firm, at a cost of millions. No expenditure is too great-from new supercomputers, to e-mail software, to phone systems, to after-hour “beer bashes” for the full staff. We exist in a world of near perfect financial freedom. Expenditures are measured with a yardstick known only as “burn rate”-a term that succinctly describes the fundamental economic principle of the Internet. Money only goes out-it does not come in.
September
Today we passed a benchmark: more than $100,000 in business in a 24-hour period. Our site continues to expand exponentially. Our coffers are full, and there seems to be no limit to what we can do. With some pride, I realize that my writing and editing, and the work of my growing editorial staff, are partially responsible for this growth.
But there’s more: When I come home at the end of the working day, I’m smiling, flush with accomplishment. My wife says I am a changed person-she can’t remember when I have derived so much pleasure from a working day.
It’s true: In between the moments of hopelessness and frustration, and after the peculiar madness of an Internet day has subsided, I realize I am as happy in a job as I have ever been. Amidst the endless phones and faxes, the ubiquitous meetings and bleary eyed days, is a wellspring of optimism-the irrepressible and addictive energy of an Internet startup. It is unlike any corporate culture I have ever experienced-and it is intoxicating. I’m beginning to understand why so many workers say that once they’ve worked in a startup environment, they can never tolerate a conventional, straight-salary job again. This business gets in your blood.
October
It turns out I have a great relationship with my boss. He respects me, and trusts I will do my work, and so grants me a large degree of independence. In part, this is because he is working 16-hour days, and is too busy to care. But I like him. He is humane, and despite his hours, lacks the frenetic pace of some others here.
This makes it all the more surprising when he is abruptly pushed aside to make room for new management. With 48 hours notice, I have a new supervisor. Not only that, but a new COO, CFO, and five VPs-all brought over wholesale from a dot.com down the road.
Almost overnight, the atmosphere changes. If we were spending recklessly before, now we are entirely profligate. Within weeks, we have cemented plans for the new building, and hired one of the most expensive ad agencies in the country to produce television ads to be aired on national TV. Our staff continues to balloon at an alarming rate.
What makes this particularly unnerving is the simultaneously, new stories are emerging about the exodus of this new management team from their former company. It seems they spent and hired recklessly, quickly exceeding their means. And now, we have inherited their unrepentant senior management team.
If there was an air of unreality about this business before, it is even more unreal now. How can it possible continue?
December
‘Tis the season for dot.coms. It’s the Holidays, and all around, the e-commerce world has reached a fever pitch. For hundreds of web sites such as ours, the Holiday season is pivotal-time to prove that we, and the Internet as a whole, are a viable alternative for millions of holiday shoppers.
Our office fairly hums with activity. People are now working the longest hours I’ve seen since starting six months ago-coming in early, staying late, heaping sacrifice upon sacrifice. Dozens of sales initiatives and new web site features are launched in record time–all with the admonition that this is a “make-it-or-break-it” moment in our short history.
Fortunately, the news is all good. By the end of the Holidays, we have broken all previous sales records for the company, in one month amassing revenue equal to that of the entire previous two years.
With this news, the venture capital community, our eternal benefactors, are ready to unleash even more millions in our direction. The party atmosphere continues.
March
Suddenly, these last weeks, the juggernaut we call e-commerce has shown signs of slowing. Indications are all around. Today, the NASDAQ dropped more than 150 points. In the coming weeks it will fluctuate wildly, plummeting almost 2,000 points. Almost overnight, dot.coms are revising their business planes to include a formerly forbidden word: profit. The VCs, meanwhile, want to see a “P to P,” or Path to Profitability, before they invest more money.
Beginning now, there will be no more windfalls. The money is still there, but it comes with strings attached. For the myriad dot.coms in this Valley, and for my own company, this has poisoned the euphoric, seemingly boundless growth of an industry. Shockingly, we are being asked to conform to the same standards as other, more conventional businesses. Our backers want to see a business plan that ends in the black.
Ironically, I consider these subtle signs of slowing to be good. All along, this profligate atmosphere of the dot.com world has made me slightly uneasy. And fortunately, our company remains healthy. We need only make a mid-course correction. At least, this is the hope.
April
Though we continue to do record business, there are signs of duress. The small frivolities that are the trademarks of the dot.com culture have begun to evaporate. For instance, we no longer have free cereal or other breakfast foods. The subsidized candy machine, in which everything costs a quarter, is empty for days at a time. While the absence of free bagels may seem inconsequential, to frightened employees gazing into tea leaves for signs to guide their futures, these small changes are everything.
Then, suddenly, my new boss quits. Ostensibly, he was taking a week off to recover from the rigors of overseeing a faltering business. But after two days, he called from Florida to say he wasn’t coming back. He’d had enough.
One by one the senior managers, including me, are call into the COO’s office to be told the news, probed for clues to his departure, and to be asked for suggestions for his replacement.
It is a remarkable meeting. I immediately notice a change in the COO’s demeanor. This man-once confident to the point of being cocksure, with a buoyant stride that bespeaks millions of dollars and a flourishing career-is now a shadow of his former self. He appears sallow, beaten, and has difficultly making eye contact during our five-minute conversation.
During the time we meet he is jittery, jumping at the phone each time it rings. He notes my puzzlement at this, and confesses: the call from the last remaining VC could come at any moment-the call that could salvage his job, and his company.
Two months ago he was rendering decisions in the assured way of one whom is backed by limitless resources. Now he was rudderless, casting about for solutions, and running out of money-fast.
May
Our cavernous office, once a gleaming testament to our great good fortune, now emits a giant sucking sound, to the tune of $1 million/month in rent. Inside, the atmosphere is dead, like a city vacated in the wake of an earthquake or natural disaster. Dozens of cubicles lay empty, and the remaining employees have taken to riding bicycles and using in-line skates inside the building, rattling about in the immensity of it all.
The exodus of employees continues at an alarming rate-and none of them are being replaced. This constitutes a gradual downsizing of the company. When I came on board, we were a staff of 100, and soon ballooned to 150. Now we are back to that original number, and falling-fast.
So far, the departures have been confined to those hired in the last year-mercenaries who are willing to quickly and easily seek their fortunes elsewhere, and have little emotional stake in the company. But today, one of the founders resigned. This strikes me as a particularly ominous sign, like a parent giving up a child for adoption.
The outcome of all this is inescapable. With revenues of barely $1 million a month, and expenditures many times that, the result is inevitable and cruel. Any fourth grader could do the math.
We are going down.
June
Today we were summoned to an all-staff meeting. With the entire staff sitting cross-legged on the floor of our near-empty building, our COO confesses that we have not been paying bills for several months. I can’t help but notice that this once cherubic man now has sagging shoulders, as if burdened with an unfathomable load. Through his excesses, and those of his general, he has put himself in an untenable situation: money only goes out–it does not come in.
He goes on to say that our construction firm is owned more than $1 million and that we might, if we’re lucky, make paychecks next week. After that…who knows? Only one interested VC remains-our only hope of meeting payroll after another two weeks.
But in the coming days and weeks, the VCs will remain ominously silent-as they will for so many e-commerce startups throughout this Valley. The e-commerce world, once a wellspring of optimism, seems to exist in a pall.
Within weeks, the entire staff will be asked to make a remarkable concession, and work for 65% of their former salaries. With Valley unemployment running at about 2%, few will elect to take this hit.
July
My position here is a fortunate one. After all, I’m a member of the team that produces the web site. Without editors, designers, and HTML coders, there would be no site. So far, this has made me largely immune to any downsizing efforts.
It has occurred to me, however, that I might be asked to let go several of my staff. And so it comes as no surprise when I am summoned to the office of the COO and a VP this morning. I have been preparing for this most unpleasant task for weeks-no one likes to dismiss employees, but in the current climate, it seems inevitable. I have even been rehearsing the dismal message.
I enter the office, and even light of the events of recent weeks, the two men before me seem exceptionally downcast. They lift their heads to deliver a shocking message: Geoff, we’re going to have to let you go.
It occurs to me that before me sit the two primary architects of our demise-the men most responsible for our profligate ways-and now they are dismissing me, one of the longest-standing employees. How can this be? But I am not alone. By the end of the afternoon, a quarter of the workforce will be let go.
I go to my office, pack a few things, and hop on my motorcycle, speaking to as few people as possible on my way out. I decide I will take the long way home, over the mountains, to the yawning expanse of the Pacific and the small beach town where I live.
Initially, the dismissal elicits a sharp pain in my gut. How can they do this to me, after having given so much to the company? And now I have been cast away, a piece of dot.com detritus.
But after 50 miles, with the scenery rendered in a fine blur, I realize I am smiling. After 100 miles, with the ocean to my right and the bike’s motor emitting a staccato rumble, I am positively euphoric. It feels good to be out of there. It was a great ride while it lasted. But no one likes to participate in the gradual disintegration of a company.
It’s time to move on, literally and figuratively.
Epilogue
It’s two weeks later. I’m at 8,500 feet, fishing by an Alpine Lake in the Sierras with my 12-year-old daughter. Somewhere on the distant horizon, 150 miles away and 7,000 feet below us, is the cauldron of activity known as the Silicon Valley. As I cast for trout, I realize that what was once an insult has now turned to amusement-and sadness.
The dream is over. In the ensuing weeks, the company flirted with bankruptcy. The remaining employees-less than 50-were asked to accept a huge salary cut. After a while, I stopped wondering what had become of the company. It hurt too much to know.
Looking off to the distant peaks, I am thinking about our COO, who has gone from one failed enterprise to another, with the buoyant demeanor of a lottery winner. I am imagining where he will go from here. The Internet community, desperate for upper management, will forgive him his sins, turn a blind eye to his failures, and exonerate him with the blessing of a six-digit salary and stock options. Within months, he will be employed at another dot.com, on another short-lived but euphoric trajectory. This time, just maybe, it will work out for him. For his sake, I hope so.
In a way, I am not unlike our COO. Like him, I will capitalize on the collective amnesia of the Silicon Valley, and within a month will have found a job building an ephemeral product for an ephemeral industry. As before, there will be no loyalty-no ethical code to bind the employee and employer. But this is the way I prefer it now. Like so many, I am addicted to the volatility of this Valley, and I want more. Never mind the risks.
This is the nature of the new economic order, where the winners can become multi-millionaires, and the losers are relegated to the trash heap of history. It is a place where fortunes are made overnight, and 20-year-old college dropouts build trophy homes and own a stable of German automobiles. Stock options are bestowed like lottery tickets, and janitors and secretaries waltz off with a million dollars in the aftermath of a successful IPO, never to be heard from again.
With are drunk on our successes, blind to our failures. We only face forward, confident in what is to come, while behind the world inexorably crumbles. Through it all remains the slimmest chance of immeasurable success. That is what keeps us going. We are dot.com workers, and we wouldn’t have it any other way.