November 15, 2000

Tech Center

What Price Glory? Tales
Of the Dot-Com Trenches

There is, of course, no single catalyst for a so-called midlife crisis -- no matter when it comes. Sometimes an event can send someone soul-searching, such as losing a job, hitting a career stalemate or realizing that a chosen professional path is all wrong. Or the trigger can be personal: A relationship dissolves, or maybe there's no relationship to lean on at all. The end result, however, often feels similar: "It's people being pulled apart limb by limb, and pretty soon they don't feel like there's anything left, and their core is burned out," says Ellen McGrath, a psychologist and executive coach.

For a segment of young professionals, the Internet boom-and-bust cycle has accelerated -- and in some cases precipitated -- this painful life awakening. A group of dot-com veterans tell their stories:

Seth Baum

Age: 29

Workplace War Story: A graduate of Harvard University and the son of an IBM veteran, Mr. Baum seemed bound for a traditional career path -- until the Internet revolution struck. He was so anxious to get on board that he rejected a $150,000 consulting job and started at San Francisco-based Petstore.com while finishing classes at UCLA's business school.

He says the decision to join a dot-com seemed like a no-brainer at the time: Not only did dot-coms hold out the lure of a quick fortune, they offered more responsibility and the promise of creating something new. "I interviewed for some normal brand jobs, but I just couldn't psych myself up to sell bleach," Mr. Baum recalls. "I'm sitting there, and all I could think is how I didn't care about the differences between fresh-scent and regular."

But even from the start, Petstore was in near chaos, firing Mr. Baum's boss before he'd even reported for his first day of work. And as online retailers began collapsing, Petstore.com's volatile fortunes forced Mr. Baum to play by rules never taught in his management classes. He learned how to avoid calls from vendors to whom Petstore owed money. He acted as if his company was succeeding wildly even as it teetered on the verge of collapse. One day, he was behind his desk, cheerily persuading job candidates to join him at Petstore.com, even though he was uncertain about the company's future. "The people I was interviewing were more excited about the company than I was," he says. "I couldn't tell them I didn't believe in the strategy. I knew we weren't going to make it."

Two months later, Petstore.com eliminated its staff and closed its doors.

Current Occupation: Mr. Baum now runs his own Internet marketing consultantancy, Feathered Fish Enterprises, out of his home in Presidio Heights, which he shares with his new puppy and two roommates. "I'm really content and happy where things are right now. I love the feeling of not being invested, not freaking out every night and waking up every morning in an environment that's so unstable," he says. "The last four to five months at Petstore.com were so depressing."

Personal/Professional Epiphany: Despite his disillusionment, Mr. Baum wonders whether he'll ever have a shot at so much responsibility and so much financial promise again. After the excitement and optimism of the boom, he finds the field of possible employers less appetizing: struggling dot-coms, big Internet companies filled with the lucky rich, and old-economy companies where he'd be relegated to minor-league status.

"My brother, who's five years younger, is working for a dot-com in Tokyo but doesn't have any expectations. His generation is going to be okay," he says. "Once you've experienced that high, everything seems gray and bland by comparison." How do you settle down to that for thirty more years? I don't know the answer. At some point you rearrange what you thought was possible."

-- Suein Hwang

Cecilia Pagkalinawan

Age: 32

Workplace War Story: In March 1998, when the dot-com world was still flush with success, Ms. Pagkalinawan opened a New York-based fashion e-commerce consulting firm called boutiqueY3K. Ms. Pagkalinawan, who was one of the Internet pioneers in the mid-90s, kept 18-hour days, networking late into the evening and struggling to stay positive when people around her lost their passion and left. "I thought burnout would be inevitable," she admits. Her boyfriend at the time was also a dot-com CEO, and after a while, they grew apart. "When you are moving 500 miles per hour, it's really hard to find time to bond, relax, slow down and share your problems, hopes and dreams," she says.

Without realizing it, Ms. Pagkalinawan sacrificed in ways she never would have imagined to keep her business afloat. On the night of her sister's wedding in late August, she left before the wedding reception to fly to an industry conference the next morning. She ended up missing the plane and sitting in the airport alone, making neither the reception nor the meeting. Similarly, about that time, she was forced to turn down the prestigious Rockefeller Foundation Next Generation Leadership Fellowship because she was too busy trying to win a multimillion-dollar account for boutiqueY3K. "If I didn't win the account, I might have had to let go of staff," she says.

But the final blow came last month, when her sister died unexpectedly. "My sister had wanted more time to talk, to go do things together, and I was too preoccupied with my own problems to help her," she says.

Slowly, Ms. Pagkalinawan has begun to make changes in her schedule, keeping weekends to herself and limiting evening outings to one or two nights a week. Recently bankers have begun suggesting that if she doubles her financial projections, she might be able to take her company public next year. So far, she's putting them off. "It's too much pressure," she says. "I'm not going to put unnecessary stress on this company we've taken three years to cultivate."

Current Occupation: Still CEO of boutiqueY3K; salary $150,000 annually plus bonus.

Personal/Professional Epiphany: In a world where work can easily become your personal life, it's critical to keep a division between the two. "What's going on in this fast-paced industry is unnatural," she says. "You can have very little patience with family and loved ones, but they're not working on your time frame, and you have to adjust to theirs. We think everyone should understand what we're going through, but that's not necessarily the case. Sometimes it's perceived as arrogance and insensitivity." As for her next romantic relationship, she says, "I'm looking for someone who's not in this space so when I do have down time, I don't have to talk about work, which is foremost in the minds of other CEOs in this industry. It's very hard to get away from it. ... You become very myopic."

-- Jennifer Rewick

Theo Song

Age: 29

Workplace War Story: In December, 1999, Mr. Song jumped from his consulting job with Bain & Co. to a Silicon Valley technology-staffing start-up. At the start-up, "everybody had high expectations that it would be analytically driven and that we'd be able to run this place in a professional manner. But there was no 'adult supervision' in the firm," he says.

He put his personal life on hold while working at the start-up. After all, everybody else in the Valley was doing it, he explains. "I made a lot of sacrifices during that time in terms of lifestyle," he admits. When the startup was sold seven months later, an exhausted Mr. Song took a breather to figure out his next moves. After he left the startup, Mr. Song's South Korean grandparents happened to be visiting him. "They don't know what the hell the Internet is. All they saw was that their grandson looked totally unhappy."

Current Occupation: Back at Bain & Co.'s Los Angeles office.

Personal/Professional Epiphany: Who you work with matters. While surfing at the beach, he happened to run into a Bain partner who had been one of his mentors. "He asked me, very informally, 'What are you thinking of doing next?' " recalls Mr. Song. "While sitting on the beach, that was kind of the 'aha' moment to go back to the firm."

At the start-up, he says, his mentality was to "defer a lot of the social things" and focus solely on work. "Everyone was working themselves to death," he says. "Now I think that model's ridiculous. It was really abnormal to be sleeping in a sleeping bag under your desk three nights a week."

-- Rachel Emma Silverman

Jason Salfen

Age: 27

Workplace War Story: Last year, Mr. Salfen dropped out of the M.B.A. program at M.I.T.'s Sloan School of Management to pursue a dot-com dream. He was one of the founders of eDentalStore Inc., a Silicon Valley online dental-tool supplier. The company had difficulty securing a third round of funding and was sold to a competitor this past September. By that time, Mr. Salfen had already decided to return to business school. "I wanted a more structured learning process," he says.

Seeing the business fold "was very depressing," he says. "I think had we been able to execute better, had we had a more experienced team that understood the pitfalls that young dot-com entrepreneurs have, who knows?" Still, his hopes were inflated beyond reason. "A year ago, I could reasonably say that my goal was to retire by 30 with $10 million to $20 million in the bank, and now that idea seems very ludicrous."

Current Occupation: Second-year student at Sloan School of Management.

Personal/Professional Epiphany: Love what you do for the work, not for the money. Mr. Salfen remembers exactly when he realized that the dot-com bubble had burst. When his friend joined a dot-com in December 1999, "we all congratulated him as the half-million-dollar man," he says. Two months later, all of the friend's options were underwater. "It made me realize that you can't base your happiness upon the value of your stock. You have to be happy with your salary and love your job. Think about your options and your future potential, but if you don't get to strike it big, you still have to be happy with life."

-- Rachel Emma Silverman

Jeanne Meyer

Age: 36

Workplace War Story: In August 1999, Ms. Meyer left a secure post at a well-established public-relations firm, Robinson Lerer & Montgomery, to sign up as senior vice president of marketing for New York-based Pseudo Programs Inc., a now-defunct Web broadcasting company. Lured by the chance to cash in on the Internet boom and expand her job skills into more powerful-sounding sectors, such as "marketing" and "deal making," she made a lateral six-figure salary move in exchange for an equity stake in Pseudo. "I knew heady days were coming to a close," Ms. Meyer admits, "but it would have been nice to have a big windfall and buy an apartment -- and in New York that costs $1 million."

It wasn't long before disappointment set in. Early this year, with the market's dot-com love affair waning, her marketing budget was slashed as the company strove to tighten costs across the board. As such, long-term planning became difficult, and she found herself falling back on the same skills she'd used in her old job.

Meanwhile, as management struggled to find a survival plan, Ms. Meyer's staff grew demoralized, and she often put in 18-hour days trying to hold her group together. The final straw came in September when Pseudo.com closed its doors, and Ms. Meyer was laid off, her equity stake in the company worthless. At that point, Ms. Meyer decided to return to her blue-chip roots. She wrote down four things she absolutely wanted in a job: smart people, great business, great backing and a great brand.

Current Occupation: ToysRus.com, vice president of communications.

Personal/Professional Epiphany: Don't get pushed into a job that's the wrong fit. "I had an epiphany that corporate communications strategy is what I'm really good at. ... The other stuff was not as great as it was cracked up to be." After significant soul-searching, she realized "it was OK to downshift a little bit. ... Why kill yourself when it's not really what you want?" For Ms. Meyer, it wasn't about going to a 40-hour week. "I'm a 70-hour-plus-a-week person no matter what, but I've learned to work a lot smarter and not obsess when I don't need to." Now, she says, "I'm at the top of my game at a point when I'm starting to think about settling down."

-- Jennifer Rewick

Justin Boyle

Age: 25

Workplace War Story: In February, Mr. Boyle was bartending in Pittsburgh when he got a call from a friend who was helping to launch NetFlip.com (NetFlip.com¹), an incentive-based marketing network in Palo Alto, Calif. Lured by the promise of wealth and the thrill of the Internet, Mr. Boyle abandoned his plans of going back to graduate school to study math and then teach and moved across the country to join the firm. He received a $45,000 base salary, equity and a performance bonus target of $20,000.

After six months at the start-up, it became clear the high-stress, fast-paced environment wasn't for him. Eighty-hour weeks were the norm, as was working Sundays. He didn't like the "competitive, cutthroat environment" of big business and says he never felt a sense of completion at day's end. "It was an ongoing process; you never feel you're getting your head above water." He thought the company would hire more people and that would help alleviate his workload. That didn't happen and two weeks ago, Mr. Boyle quit. (NetFlip says Mr. Boyle's decision to leave was based on his "passion" for teaching and adds that the company is not in "any financial difficulties and is always looking for talented people.")

Current Occupation: 7th- and 8th-grade math teacher making $36,000 a year.

Personal/Professional Epiphany: It's better to try something new than to live with regrets. "I think this was a great experience for me," he says. "If I'd gone straight into teaching, I might always have wondered if I should have gone into business."

-- Jennifer Rewick

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