Golden Age of the Internet Startup

Y2K was a weird time for many in technology fields.  For my part, I was in charge of an e-commerce team at the time that many companies were just beginning to realize the importance of having a presence on the web at all.  Revenues for my brick-and-mortar company were just topping $1 billion…  then overnight, one of our biggest customers made a few dramatic changes, and as a company, we had to shrink to about a quarter of our size to match our wildly decreased revenues.

As the fledgling wing of the business, the e-commerce team bore a disproportionate amount of the downsizing effort, so I laid off most of my very large team.  Another round later, most of my considerably smaller team were laid off.  By the third or fourth round, I’d decided it would be better to taste the riches of the dot-com era than preside over a rapidly-dwindling department, and laid myself off.

Within a week, I had about a dozen job interviews lined up — the availability of dot-com money was in full swing, companies were paying a premium for barely-competent java programmers, and my Vice President of e-Commerce title placed me in demand.  I rejected most of them for various reasons:  I didn’t think much of their technology, or their business, or didn’t have enough control, or just plain didn’t like the interviewer — within two weeks, I settled on a company that seemed to have everything going for it:  supply chain software, capital provided by a consulting business, a foundation for a product, domain skills, and a fair (but not exorbitant) salary.  Perhaps even more important was the contagious enthusiasm exuded by the founder, whom we’ll call “Bill.”

Bill hired two people right away — me, as the Chief Development Officer, in charge of building and supporting our products, and “Jeff,” as the Chief Technical Officer, in charge of infrastructure, IT, and everything else.  Jeff showed me the clause in his contract that included a foosball table in the lounge — something I neglected to ask for — but presumably, we’d have the same lounge, so I wasn’t about to complain.

Our first offices were temporary space with Regus.  We had four desks or so, reception, internet service — a whole office presence.  Since it was shared office space, we rubbed elbows with other Internet startups, cheap lawyers, and a handful of dismal people doing god-knows-what, whom I’d notice carrying a paper lunch bag into their office, and sitting at a desk all day by themselves.  I never saw them with computers or on the phone, so I imagined them spending their waning years pretending to go to a job that no longer existed.

A few years earlier, when I worked for a company on behalf of the CTA, I was shown an empty room with four older people in it with computer printouts and those old adding machines with the crank handles.  It was explained to me that due to their seniority, they effectively could not be laid off, nor could they be forced to train for other jobs, but their skills were utterly obsolete.  So they were put to work verifying account spreadsheets printed by the mainframe, which was deliberately pointless and mind numbing work.  They were not allowed to read books, and had to be strictly on time every day and take only prescribed breaks, or be fired.  Meanwhile, they carefully ran their crank machines, their work destined immediately for the trash bins, waiting out their retirement clocks.  I couldn’t help thinking I might go insane first, or at least beg to be retrained for something.  Anything.

I was reminded of this every day at Regus as I walked past the office of a little guy with a moustache, who didn’t ever have anything on his desk but his lunch, and seemed to spend most of his time looking at a spot on the desk.  I’d flash him a sunny smile and wave, and I might get a half-hearted smile in return, if I was acknowledged at all.  I called him “Willy Loman” and looked forward to days when his door was closed.

We didn’t have dedicated connections or server hardware, so I set up web and email servers in my basement, which had pretty decent connectivity.  The old consulting wing of the company was based in California (with a few employees there) and a few more scattered around.  I managed to marshall these few people into building something we were able to sell to a large retailer, to manage their shipping process.  We didn’t have health insurance yet, but paychecks were regular and covered COBRA payments.

While Jeff and Bill sought funding, I used the few resources we had to build what we could, and put together increasingly ambitious plans based on our ability to secure funding, and our ability to sell what we already had to the burgeoning Internet retail market.

To put this in context, this is an era where a company could boost their stock price by putting an “e-” or a “.com” in their name, where startups would spend millions on waterfalls in their lobbies, Webvan and were in full, inexplicable swing, along with Kozmo and Flooz demonstrating that startup capital and a dot-com model were the fast track to corporate success.

On the other hand, we were a down-to-Earth, hard working company, were careful about our spending, and didn’t yet have funding.  What we did have was part of a product, a handful of competent employees, and an office that after a while, nobody bothered going to.  After all, the servers weren’t there, the employees were remote, and venture capitalists were elsewhere — as nice as Regus was, it was clearly temporary, shared office space, not the place you’d bring venture capitalists to impress them with your waterfall, and god knows you wouldn’t want Willy Loman around.

The CEO called and said we’d leased permanent space — it was time to move.