wsj...
June 5, 2000
Tired From a Frenzied Start,
Internet Leaders Get to Work
By KARA SWISHER
Staff Reporter of THE WALL STREET JOURNAL
PERHAPS IT'S TIME for some chilling out in Silicon Valley.
Once-darling Web companies are getting hammered by a Wall Street turned cruel. Start-ups hungry for cash are finding that funding is drying up faster than a California creek bed in a drought. These days, having a dot-com at the end of your company name is like having three scarlet (as in profitless) letters.
The tedious Microsoft trial is adding to the gloom. Listening to the minions of Bill Gates and Joel Klein endlessly arguing is like being trapped in your seat during a particularly boring high-school debate. By the time both sides are done trading legal briefs in response to responses to responses, we'll all be surfing the Internet telepathically and only about 16 people will be using the Windows operating system.
People are re-evaluating their options -- literally and figuratively -- in the wake of this new reality. No wonder so many in Techland are looking a bit tired around the edges.
You can see it at the parties where once-swaggering teen-age phenoms are suddenly talking about having to accept "down rounds" (getting funding that values your company at lesser amounts than before). VCs, who nonchalantly used to brag about "10-bagger" returns, are wearily insisting that merely doubling your money is still pretty good. Job-hopping tech employees are suddenly looking a lot more carefully before they leap. And without easy access to capital, a multitude of sins -- overspending, not-so-thought-out business plans, lack of consumer interest -- have been laid pretty bare.
"At your first start-up, your eyes get big and you expect big returns so that you will eventually not have to work," says Matt Wolfrom, a former Excite At Home executive who recently went over to another start-up that promises a saner pace. "A lot of people like me are not just going off on ideas now, or jumping at the hot and burning thing, but looking at a more sustainable path. ... I think we all realize that you have to pace yourself or it eats you up."
Today, the old "the-world-is-our-Palm-Pilot" euphoria is being replaced by the realization that it's time for the real heavy lifting of building businesses. "We're in a marathon, not a sprint," says Michael O'Donnell, chief executive officer of Salon.com, the online magazine.
The problem is people are worn out already by the fast-dash portion of the race: late nights hunched over computer terminals, fueled by caffeine and sugar; a need to grow as quickly as possible, sometimes staffing a company in a week; shifting business strategies faster than it takes to change a light bulb. And it was all done just to stay barely ahead of rivals doing the same thing.
The frenzied behavior was embraced over the past few years because of the instant wealth that so often followed in its wake. Many insisted they weren't in it just for the money. But the big impetus was the promise of winning the Web lottery -- becoming the next Jerry Yang or Jeff Bezos -- and getting there fast.
This new era, however, demands endurance, which requires a different set of skills altogether.
Ask someone who knows, like Rosanne Siino, employee No. 19 at Netscape Communications Corp., the legendary browser firm whose fast rise was followed by a swift decline in the face of bruising competition from Microsoft Corp. until it was bought by America Online Inc. last year. After the sale, Ms. Siino, like many Netscape employees, quickly departed the company, exhausted from the effort and rich enough from stock options to allow for a pause.
"It wasn't only the intense pressure, because every business has that; it was the compressed time frame," she says. "And one key thing that kept you going, along with creating a whole new industry, was obviously the possibility of a big payoff."
Now that it's gone, notes Ms. Siino, all the hard work will be harder to bear. "I hear from a lot of people that they find it hard to know what to say when asked if they are ready to put their all into trying to hit it big again," she says.
A number of Internet CEOs and other top-ranking execs have been stepping down of late as the management landscape changes from a visionary mode to that of a sustainer. All have offered good excuses (from "My work is done here" to "My talents are better suited for an entrepreneurial setting"), but it's clear they needed a break.
Some are welcoming the change. "I think the meltdown marks the entry to the healthy phase of the Internet," says Halsey Minor, the founder of CNET Inc. who stepped down as the company's CEO in March. "For all of us, it had all gotten a little frenetic over the last year and I think we are probably thankful the hype is over and we can all settle down."
Likewise, Lise Buyer, the Credit Suisse First Boston Internet analyst. She says she has been thrilled to be living at ground zero of the Web whirlwind that has swept up everyone in its path. She has been in some of the better positions to partake in the merrymaking of money, mojo and momentum. She started out covering the fledgling industry as a buy-side Internet analyst in the Baltimore office of T. Rowe Price (helping its fund managers make stock-purchase decisions) and then switched to the sell-side at the bank (giving investors advice on stocks).
"It's been the thrill of a lifetime, if you don't mind me using that old clich‚," she says. "Quite the ride."
Nonetheless, she is getting off, moving to a new job at a small venture-capital firm, Technology Partners, that will allow her to work more closely with entrepreneurial companies at a longer-term pace. "I think this new phase is going to be about building businesses over time," she says. "Which is actually the hardest part."
Write to Kara Swisher at kara.swisher@wsj.com
|
