Despite the Clouds of Layoffs, a Virtual Silver Lining Shines for Some Caught in Austin's Online Bust
In some circles, watching dot-coms go down in flames has become an entertaining spectator sport ... perhaps "blood sport" is a more accurate term. From the irreverent rumor-mongering and dot-com dead pool tracking of www.fuckedcompany.com to the comprehensive lists of e-commerce job cuts and closures on The Wall Street Journal's www.wsj.com, Web sites have turned up-to-the minute news about the demise and decline of dot-coms into morbid business infotainment.
Since the first of this year, in the Austin area alone, more than 4,000 people have lost their jobs. A great deal of those people worked for high tech companies. Add those to the pile of the estimated 1,500 or so Austin high tech workers let go last year, and you've got a heap of lost innocence, frustrated dreams, and stock-shocked people wondering "What's next?"
The dot-com world got plenty of attention back when folks were flaunting fresh IPO money, and many creative people left stable jobs to swing into the enticing hot tub of sexy Internet-based businesses. Now, some of them are emerging, pruned and hung over from the party that fizzled all too soon.
At its peak one year ago, Austin-based www.garden.com had about 280 employees working to sell seeds, plants, and gardening supplies online. Despite some encouraging cash flow -- venture capitalists had poured about $107 million into the company, and a public stock offering in 1999 raised an additional $50 million -- the company never made money, and after a while, you know, that becomes sort of a problem.
Banished From Eden
Toward the end, Garden.com laid off staff in stages: 100 here, 50 there, but it wasn't enough to save the ship from sinking -- much to the sadness of its employees.
When Garden.com shut down its Web site Dec. 1, 2000, a film crew from CBS's 60 Minutes captured the scene as employees gathered in the building to toast a final farewell to their beloved company.
"I've never seen anything like it," said Corrie Johnson, 32, a former manager at Garden.com. "It was large and raucous ... wake-like."
Garden.com had always celebrated the close-knit nature of its staff. "Garden was a culture," Johnson said. "Your job and your friends and your family were all mixed in together; you're not just losing your job, you're losing your daily connections with people. After so many days of carrying other people's boxes out, carrying out your own was anticlimactic."
Since getting laid off, she's had to adjust some of her priorities and expectations. At first she was adamant about not leaving Austin just to take another job. "I'd settle for [working for] Dell before I'd leave Austin," she said back in December. That may no longer be an option. "The market in Austin dried up the first week in January," she said.
For an interview for a job in Houston she "did the full-on suit and silk blouse thing," said Johnson, who spent three years living in Africa as a member of the Peace Corps and who relished the fact that she could wear flip-flops to work at Garden.com and still be respected.
Confident enough that she'd find another job, Johnson went to Granada for a little sailing and scuba diving -- her first real vacation in years. She's single, doesn't own a house, and has a master's degree and a decade of corporate experience, so she's not worried about work. She does, however, worry about some of her co-workers, the ones with kids and mortgages.
When the time came to shut down the company, Johnson said no one seemed to be angry. "People were sad and people were worried, but never was there anger. Generally people reacted in one of two ways to the closure. They either said, 'I loved it here, but would never want to go through that again,' while the majority wouldn't hesitate to jump right back in to another intense start-up situation," she said.
Johnson has kept in touch with many of her former co-workers and says they are trickling into jobs. At least half have jobs now, she estimated. "Some people are still traveling."
Johnson's plans, too, include travel -- around Texas as well as back to Africa to visit friends from her days in the Peace Corps.
She also plans to apply for unemployment, "... since I am probably not capable of laying around and not looking for a job. Anyway," she continues, "at $294 a week ... You can't live on that very long. I'm interested in having phones and heat at the same time."
Certainly the experience has left some Garden.commers a bit dazed and somewhat unnerved by the silence that now surrounds their once-busy lives. Others are seeing this forced change of life as the much-needed kick in the skirt to make some long-overdue life changes.
Election Day, 2000, 2pm, the president of www.bike.com stood with crossed arms in front of the staff standing among the cubicles in the windowless sales office. Something was up. He was either about to give the troops a pre-holiday pep talk or tell everyone game over. Another round of layoffs was out of the question; the company was already down to a slim 16.
Wheels Keep Turning
All morning, employees had taken orders over the phones and prepared the next day's content for the e-zine. Business as usual. But just a few seconds into the president's speech, it became obvious where this whole thing was going.
Bang. Just like that. Within 20 minutes, the site was shut down, people were walking out the door, and it was over. The company had tried to turn a profit selling bicycles and accessories online. The e-zine was popular, but content doesn't make money, neither does having two-time Tour de France winner Lance Armstrong on the board of directors, apparently.
The only employee not there to hear about the shutdown was staff writer Rob Coppolillo, 30. He was in Italy after covering the world road cycling championships for the site and leading a bicycle tour through Tuscany.
"Many of my readers e-mailed me asking about the 'shutdown.' I scrolled through my backlog of e-mail and found a note from my boss suggesting I call him immediately. My health insurance had lapsed, I was unemployed, and had been given no warning," he said.
"With all the dot-bomb implosions over the past few months, it didn't catch me totally off-guard," he admitted. He returned to the States a week later and immediately began looking for work, but the experience left him more interested in returning to freelance than in working for another company, dealing with another business structure and another boss again.
Since graduating from college, Coppolillo had eked out an existence as a freelance writer while competing in the lower echelons of professional cycling. "I thought it was a good move to get some corporate experience," he said of the Bike.com gig. "It only proved what I knew before: It ain't for me."
Initially, his work at Bike.com was limited to consulting on the e-zine. He stuck around and opted for a pay cut in exchange for stock options and the chance to travel around the world writing about professional cycling.
"Most of us took options hoping to snag a little chunk of the action," said Coppolillo. "I had worked as a contractor for double what my salary ended up being. In the end it was a loss, but at the time, the market was hot for fat-spending start-ups, and it was a good risk."
These days he lives in Boulder, Col., riding his bike several hours a day, and working on some writing projects, including background research for a cycling book. "The [layoff] offered me the opportunity and nudge to get this book going. I think it's a sign. I lost a friend this year and her death helped remind me that I won't always have the time."
He's also been to Las Vegas with some old friends, dropped Ecstasy a couple of times, and decided to file for unemployment benefits. He plans to make applying for unemployment a spectacle of performance art proportions.
"I'm going to file from my cell phone while sitting in my father's hot tub drinking a martini out of a 24-ounce mason jar with nine olives and Polish potato vodka."
Would he work for an Internet magazine again? "I'd get involved in another dot-com if I was solely in charge of content and the salary was commensurate with my experience and expertise. Options mean dick these days."
The dream of retiring by age 30 sunk deep into Craig McCullough's psyche. It became his mantra, a longing of nearly spiritual proportions for him and many other young tech entrepreneurs, he says.
Keeping the Faith
McCullough, 25, worked for WebTaggers from its inception in 1999 until last September. It was a company initially fueled by his fraternal twin brother Sean (not to mention Sean's amazing ability to write code), about a million dollars in venture capital from AV Labs, and a couple of charismatic personalities.
"The idea behind WebTaggers was originally to be a virtual 'Post-it Note' for the Internet," McCullough said. The company sold software that could track the patterns of individual users on e-commerce sites and then enable other sites to package individualized content and products according to that user's patterns.
Although successful in attracting an initial round of seed money, the company was unable to attract further rounds of support and shut down early last November, letting go all but five of the 32 employees.
It's a heady experience when someone gives you and your friends large wads of cash for your thoughts, for just an idea on a piece of paper, for a business plan worked up in a few weeks over coffee, Heineken, and cigarettes on the front porch. At least that was McCullough's experience.
"I don't know what [the investors] believe, but they tell you you're intelligent, that you're going places," he said. "I think everyone gets humbled eventually. Chances are they don't really believe in you; they are betting on your promise ... on your future."
McCullough is also eager to demystify the image of a loose, high-living young tech entrepreneur. "People read too many Wired magazine articles. Founders are some of the worst paid at a company. You're a start-up for crying out loud. I ate Chick-Fil-A for lunch. No Playboy bunnies, no Lamborghinis, no downtown lofts."
And now he's out of a job.
"I've never had a problem going to zero," McCullough said. He sounds like an entrepreneurial evangelist, or perhaps a man possessed. "You risk everything, for what? You don't even understand it ... It's not risk for risk's sake. It's risk for a return. Not like bungee jumping or people dancing with cobras. There's a definite payoff, a return."
He's content to chalk the latest venture up to experience. A painful one, but experience nonetheless. And while it may be priceless, it certainly won't pay the bills. Like everyone else featured here, McCullough is currently on the quest for gainful employment.
He says it's hard to say what he'll do next. For now, he's messing around with some friends at Gigantic Games, helping them with "strategic development" and "revenue models." Their three-years-in-the-making Iron Squad is making some noise in international gaming circles, but he isn't getting paid anything yet.
Still, he'll continue to throw himself in the risky arena of start-ups, partly because he's an entrepreneur to his bones and partly because he's been so close to financial success, he wants to try again.
"It's like a flavor of food that only a few are selected to try. Why are [we] selected? Who knows, but once you've tasted it, you're addicted."
And what does it taste like?
"It tastes like hope. Like the faith kind of hope, not the 'I wish' kind... Hope as a noun, not as a verb. Besides," he says, "I'd lose my religion if I stopped."
Writer Carol Brorsen was also recently laid off from a gig at a prominent dot-com.
Illustrator Susan Kare has been designing bitmap graphics since 1983, when she worked on the original Macintosh. She currently works in San Francisco and can be reached email@example.com