Dot Com Sector Faces Long Day's Journey Into Night
Part 1 - Take Us to Your Leader
By Andrew Goodman, June 5, 2001
Eugene O'Neill's classic American play Long Day's Journey Into Night chronicles
the unravelling of the Tyrone family into bickering and solitary self-pity. Images
of light and darkness are used to convey the difference between truth and "hiding
in the shadows." A relentless theme is that weak-kneed means of
escape from reality - morphine, alcohol addiction, self-congratulatory delusion
- offer only temporary respite and simply exacerbate life's unpleasantness
when it comes time to face the cold light of day.
Few families can match the utter weakness and consistent reality-avoidance exhibited
by the Tyrones. But since we've entered the land of metaphors, would it be
too much to compare the spectacular boom and bust of the dot com economy
to the troubled, delusional family portrayed by O'Neill?
Come now, it wasn't that bad, I hear you saying. True - technology is the driving
force of growth and productivity, and the fast pace of business will come
back eventually and keep impressive numbers of people gainfully employed.
But some parts of this economy won't come back anytime soon. The denial is still
there, and the healing has not even begun. The first step must be to acknowledge
that norms of conduct - personal and business ethics - became warped so severely
at the height of the bubble that what would have been thought of as lying, cheating,
and stealing in other times was dismissed, or even celebrated, as competitiveness
Lest we forget how addicted this economy was to the denial of plain truth, and
to the creation of elaborate fictions, this Long Day's Journey series will present
for your consideration several examples in the coming weeks, beginning with Exhibit
Exhibit A: The Mad Genius Spawns an Army of Consultants
High-end Internet-strategy "consulting" was the pumped-up late 1990's
version of what began as "web site design." The build-and-run habits of expensive
web designers - who convinced clients like radio stations and florists that they
absolutely needed a Professional Web Site Designer to design their soon-to-be-obsolete
brochureware sites - simply got inflated near the end of the boom as e-business
strategies took hold with larger enterprises needing advice from the Cool Kids.
What might have been $5,000 or $10,000 down the toilet in the middle of the decade
became six and seven figure megaprojects handled by teams of designers and strategists.
Perhaps the largest of these consultancies - pumped up into a multibillion dollar
(on paper) enterprise through mergers and acquisitions and rampant stock market
speculation - was USWeb/CKS. After its last merger, this behemoth topped out under
the company name marchFIRST. It bottomed at 11 cents a share before
a bankruptcy reorg was initiated.
By "normal" business standards, USWeb/CKS founder Joe Firmage (long gone when
everything collapsed) would be considered a raving lunatic. I'm not
referring to the usual lunacy of ambitious, hyperfocused moguls such
as Bill Gates, of the breezy, rumpled visionary in the Steve Jobs
mold, or even the nastiness of a chainsaw-wielding bully like Al
Dunlap. By business standards, Firmage seemed even curiouser than any of these
folks. And curiouser and curiouser all
As the boom wore on, the price tags for web consulting jobs grew, and so
did the web strategy gurus' arrogance. When things turned, a lot of more
conservative corporate clients were only too happy to tell the marchFIRSTs of
the world where they could stick their overpriced services.
But forget Joe and his company for a moment. Companies like this employed
thousands upon thousands of software engineers, designers, and business analysts
of varying skill levels. It's not hard to see why so many contented, productive
young professionals were lured to join gigantic, publicly traded web-builder
firms that sprouted like so many mushrooms. They believed that they were going
to get rich from stock options.
And don't think that people even understood the concept of options until they
were some way along the path, either. I was advised by a friend to take a job
with Big Company X, in part because his friend had a job there for a
short time and was able to buy a house in San Francisco based on the soaring
value of this stock. "But those are options," I insisted. "If the stock is
in a downtrend, as it is now, I'll never see a dime." My friend wouldn't
hear of it. "Dude. My friend bought a nice house with his stock." A lot of
people didn't get the concept of options. They do now.
This is an easy one to heal, in some ways. The competent employees amongst
the ranks of the big consultancies may return to their roots - small boutique
firms that connect with clients, tell the truth, deliver value, and follow up.
Knowing they're chasing cash flow and not racing against the clock to dump stock
when options vest (or don't) will be a much healthier environment for business
- and customer satisfaction is bound to improve.
Some companies won't be cut out for this kind of environment. When companies
like Yahoo, AOL, and Lycos came to that fork in the road - in one
direction, the harsh realities of competing in the high technology sector;
in the other, the Fantasy World of Big Media - it was an easy
decision. Ironically, in the phony world of big media, the profits are real.
more articles by Andrew Goodman