Joe Kraus
Cofounder, Excite.com
Joe Kraus looks as if he just strolled out of a freshman economics class at Stanford. Fresh-faced and trim, wearing a string bracelet and toting a computer bag, he doesn't seem close to 32. He certainly doesn't look old enough to have lived through the dramatic rise and fall of Excite.com, the Internet search engine he and five others founded in a garage the summer after their college graduation.
Worth more than $500 million at one moment, Kraus saw his company fall to pieces after an ill-fated merger with Internet cable outfit @Home. Kraus came out okay financially, having cashed out part of his stake, but emotionally it wasn't so easy to go from wunderkind to someone people kinda wonder about. "It's very sad to see something you've spent so much effort and energy on, a third of your life creating, and--poof!--it's gone," he says.
What went wrong? Kraus points fingers in all directions, including his own. He says the company failed in part because @Home, a joint venture of several cable companies, dissolved in infighting. But there were strategic errors, too, such as the acquisition of Blue Mountain Arts' online greeting-card company for $780 million, much of which was paid in cash. "The valuations look ridiculous, but they weren't ridiculous at the time," he says ruefully. The other error, says Kraus, was Excite's failure to see that many businesses would actually pay to be part of a search engine, as Google has figured out.
"Fried," in his own words, Kraus backpacked around the world. He got married, and in 2003 had a son. He and an Excite partner, Graham Spencer, recently decided the time was right for a new venture. Though he's coy about the details, it involves a simple way to collaboratively build documents or Web sites using only an HTML browser. "The company-creation process is the juice," he says. And it's that heady beverage he wants to taste at least one more time.
Ellen Hancock
Former CEO, Exodus Communications
At least Ellen Hancock can laugh about it now. "He told me it was a growth company with no risk!" she chuckles. She is recounting the recruiting pitch lobbed at her in 1997 by an investor in Exodus Communications, the Web-hosting startup she ran as chief executive from March 1998 to September 2001. As it turned out, he was wrong on both counts. The dotcoms that used the company to host their sites went bust. Exodus collapsed two weeks after Hancock was forced to resign.
Still, Hancock, now 60, sounds buoyant at times as she reflects on her own lessons from the New Economy. "The Internet did change everything!" she says. "But we know now that the value isn't in how many packets we send back and forth. It's the effect it has on our lives. I learned about Saddam Hussein's capture at 5:30 a.m. on my PC!"
She's also clearly humbled. She's on several academic boards, but has been unemployed since leaving Exodus. It is not a status she bears easily. Eyes faintly glistening, she says, "I'm still not sure I'm over what happened at Exodus."
By her own account, Hancock should have seen the trouble coming. A mathematician by training, she spent 29 years at IBM. When she joined Exodus, Hancock had seen more office Christmas parties than most of her employees had birthdays. And to an operating executive steeped in IBM caution and process, Exodus, full of passionate go-getters, was bewildering. "Sometimes passion gets in the way of good business process," she says.
Despite it all, Hancock says she'd take the same trip again given the chance. In fact, she plans to get back into the hosting game with a startup she's funding herself (she cashed out $12.4 million of her Exodus shares). "I'm still not happy with my last chapter," she says. "I want to do one more thing." --Carleen Hawn
Michele James
Former chief talent scout, AOL
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