Act II Generation

David Morris is a member of the ''Act II Generation.'' A graduate of the University of Pennsylvania's class of 2000, Morris entered the workforce just as the economy was going into a tailspin. Suddenly, Internet businesses had the whiff of desperation about them. The boundless opportunities and dotcom riches that had been promised to graduates of preceding classes seemed far more elusive.

The previous year, Morris says, campus recruiting events revolved around new-economy companies; very few students gravitated toward the large accounting, finance, and marketing companies that showed up looking to hire. Last fall, the tables shifted.

"When the market took a downward turn, 90% of the people interested in new-economy opportunities returned to the safety of the old economy," Morris says. But he wasn't willing to throw in the towel and go back to banking or consulting (B2B or B2C, as students jokingly refer to such old-economy moves). He still has faith that the entrepreneurial spirit that fired the past decade's economic growth is alive -- if not totally well. And he's not alone.

There are still cadres of young people who are convinced that the promise of the new economy is still a good one. Their ranks may be thinning, but the entrepreneurial spirit that fired the Jerry Yangs and Marc Andreessens of the world has not been extinguished.

Morris conceived and founded the idea for the now Boston-based Seedling Group Inc., a recruitment and networking service, in his third year of college. He and his team of Penn grads believed enough in the potential of this segment of the economy to turn down numerous opportunities in favor of moving to Boston and growing Seedling. This dedicated team works to establish long-term connections between young talent and budding companies, and between young entrepreneurs and investors. And it fosters a lifelong relationship between "seedlingers" and Seedling team agents, starting with the seedlingers' last year in college and continuing throughout their careers.

Morris's relationship with emerging talent gives him a critical perspective on the effects of the market downturn. "The crash has created a nice screening process," he says. "Now we can identify who is really committed and who is capable of striking out to create something successful."

James Gutierrez also attributes the weeding-out process to the frigid economy, which has left behind only the most devoted candidates. A 1999 graduate of Yale University and founder of an Internet recruiting company, called MagicBeanStalk Inc., Gutierrez takes the company's cornerstone event, Upstart 101, to more than 25 top colleges nationwide each year. Since the market downturn, the young recruiting company has diversified its offerings to include Consulting 101, Teaching 101, and BioTech 101, among others. However, Upstart remains its most powerful and successful event.

"The students attending our events this year have a genuine interest in the new economy," Gutierrez says. "They are more knowledgeable about the economic landscape, and they believe technology is going to change the world. Those passions don't disappear when the NASDAQ drops 500 points."

Greg Tseng is the kind of recruit the Seedling Group and MagicBeanStalk are most eager to attract. The 21-year-old Harvard senior is a math, physics, and chemistry major who started his price-comparison Web site at age 19, orchestrated a merger with Web portal Limespot, and now works as chief operating officer of the company. Tseng has appeared in the New York Times and the Boston Globe, and has contributed to The Harvard Entrepreneurs Club Guide to Starting Your Own Business (John Wiley & Sons, 1999).

"Frankly, I'm happy about the dotcom collapse and the ensuing changes," Tseng says. "Candidates, like investors, are now looking for companies with real value propositions and solid business models. That's an incredible improvement over the last two years. The Internet and startups attracted so much hype that a lot of silly ideas were funded and a lot companies without revenue models were overvalued. The true power of the Internet was completely lost in all the noise."

Though the market is flooded with recruiting services, Tseng says he gravitated toward MagicBeanStalk and Seedling Group since both were founded by rookies who strove to network with investors and connect with lucrative opportunities. As an entrepreneur, Tseng also sees real value in the personalization of a company like the Seedling Group. He says Gutierrez and Morris have a definite advantage over corporate recruiting firms: They can truly relate to their customers. So far, that strategy is working well for the companies, both of which have solid business plans, strategic growth plans, and currently operate in the black.