NEW YORK — Last week marked five years since the stock market
bubble finally began to burst. The Nasdaq hit its all-time high on
March 10, 2000, and then began a steady plunge that marked the
birth of a long bear market.
The long bull market that preceded it was a remarkable time, but
also a costly one. On the plus side, we got a technology whose
transformational effects can’t be overstated. On the down side, the
dawn of the Internet also spawned the dot-com craze, one of the
loopier periods in American business history and proof positive
that so long as there are human beings, we will remain vulnerable
to the Utopian impulse.
I know: I was there. Well, sort of.
In keeping with a lifelong habit of boarding trains just as they
are leaving the station, I joined a Manhattan-based dot-com in
March 2000. The company was actually not a dot-com strictly
speaking, in that its product was not a website hawking goods or
distributing content, but its fortunes, such as they were, relied
on the continued boom of what was then called the New Economy.
Like most dot-coms, the company had no profits to speak of, and
it had been trying longer than most. The leadership was not
concerned, however. On the contrary, when I joined that March the
mood was euphoric. Convinced they were in the vanguard of a new way
of doing business and that naysayers just didn’t “get it,” the
leadership instituted a massive hiring plan.
“Right now, the priority is to get big,” the CEO told employees
at my first company meeting. “We need to ramp up the hiring
process.”
I wondered how more hiring was going to help us get to
profitability sooner, but then I was pretty new to the business
world and figured I was being small-minded. No one else seemed
concerned about profitability, and they were all so bright. Most
company meetings were spent mocking our competitors or old-line,
established companies that any day now would wash up on the rocks
of obsolescence. Profitability was not mocked so much as
ignored.
The HR department instituted a lavish employee entertainment
program, with regular company parties, cruises, and a raft of perks
and benefits. Fortunately, it never got to where employees were
playing foosball in the kitchen, or bringing their dogs to work,
but hey, we were New Yorkers, not San Franciscans.
Still, self-indulgence was the rule: to this end, employees
generally chose their own job titles. As Manager of Corporate
Communications, I managed no one and reported to a Director of
Corporate Communications, who directed me and not much else except
an occasionally sharp British wit. We worked with a VP of Marketing
who would have been fired for sexual harassment before lunch at any
reputable company; he supervised a Marketing Director, who did all
the real work in the department. Weekly marketing meetings were a
frontal assault on stale old concepts like project management and
accountability, along with extensive discussion of new movies. When
it came to work, efforts were modest.
“I’m sending out an e-mail a day on this,” the VP said,
referring to whatever spontaneous initiative we were pursuing that
week on company debt. He could only fit in one e-mail a day because
the rest of the time he was web surfing (a popular employee
pastime) or ogling women half his age. When some in the marketing
department couldn’t get out of bed in time for our 11:00 meetings,
he helpfully moved them to afternoons.
Our ostensible mission was to “brand” the company and increase
visibility, but this was a tall order because none of us was
entirely sure what the company did. We were struggling because the
CEO kept changing his mind about that, and also because, all in
all, the company really didn’t do much. Given this vacuum, others
in the company were free to define what they did almost however
they wished.
MY FAVORITE SELF-APPOINTED fiefdom belonged to the 24-year-old
Director of Software Architecture. He was in charge of the
company’s “technology platform,” which was, of course, a half-baked
nonstarter designed to burn cash. He heard that I had been assigned
to write some copy on the technology and took me out to lunch,
wherein he ambushed me with geek questions, shaking his head as I
demonstrated my ignorance of APIs and the changes to human
consciousness that were just around the corner.
“How can you write about the platform when you don’t understand
it?” he fumed. “We’re trying to change the world here.” The
Architect, as I came to view him, saw himself as a new mandarin of
the digerati, and he was dancing on my analog grave. I wondered why
I’d ever left the nonprofits.
Another fiefdom was inhabited by a lovely Spanish woman who came
in at 11 and left at three every day. She always dressed like she
was going out to a very upscale after-hours club, which in a sense
is what the company was, except it kept shorter hours. No one
really knew what she did. She was in charge of competitive research
one month, quantitative analytics another. All anyone knew was that
she was beautiful and had a hypnotic voice, and for a very long
time, this more than sufficed. Some colleagues liked to leave her
voicemails just so they could hear her outgoing message.
“I think she was the most beautiful woman I’ve ever seen,” an
old colleague told me recently. “What did she do, though? Was she
in marketing?”
When the market started hemorrhaging, the leadership was very
slow to react. Hiring continued for a time, and the delusional
company meetings persisted for much longer. Morale remained high
since the CEO steadfastly refused to lay off anyone, thereby
upholding the company’s core value, immunity from consequences. We
staggered through the rest of 2000 as the dot-com collapse became
first a trend and then a fait accompli. But the values of the new
utopian capitalism died hard.
Finally in early 2001, the layoffs began, first in a surgical
strike that the CEO promised was a one-time event, and then in
ongoing, and often unannounced, waves. People finally began to lose
faith, and they scrambled for soft landings, but the job market was
none too hospitable. Those of us who remained took on more
responsibility, at least in a manner of speaking. I began managing
a graphic designer who reported to work sporadically, with excuses
for his absences ranging from apparently ongoing deaths in the
family, to a sudden marriage, to troubles with the INS. HR was very
supportive of me in making clear to him that if he messed up for a
seventeenth time, he was really going to be in trouble.
The new realities were most bitter for the company’s legion of
younger employees, many of whom were working their first job after
school. For them, the dot-coms had been a glorious extension of
college, with salary and benefits thrown in. Now it was all
crashing down and they would have to get real jobs. It was
reminiscent of the 1960s, when the student radicals had to traipse
off to graduate school once the fun was over burning flags and
slandering soldiers.
By the time the planes hit on September 11, 2001, the company
was down to about half of its peak size. The events of that day,
and their devastating effect on the economy, accelerated the
shakeout. I knew that my own days were numbered, but I wasn’t
having any luck in the job market. I managed to hold on at the
company for another six months.
AS DIFFICULT AS THAT PERIOD was for everyone — the recession may
have started with the dot-coms, but it didn’t end there — I
couldn’t help but find pleasure in seeing the guilty punished. The
many industry magazines devoted to Internet coverage shrunk from
200-page, ad-laden manifestos, to 80-page, elegiac husks.
Underlying the post-mortems was the barely-contained rage that the
house party had ended, and that accountability had returned like a
couple of angry parents. I thought that this must have been what it
was like to read Ramparts after Nixon was re-elected.
Now it all seems so much further away than five years. Our
culture purges dead wood and elevates upstarts with such ruthless
rapidity that the dot-com euphoria hardly seems any more relevant
in 2005 than the pet rock craze of the 1970s. It was just one of
those moments in time when a group of people — Investors? Venture
capitalists? Journalists? All of us? — went a little mad, but the
spasm passed.
The technology marches on, and god bless it. The culture is
gone, and good riddance. Or, as one of my colleagues used to say at
the end of every vaporous marketing meeting: “Whatever, dude.”
