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Voyage to the New Economy

Executives are leaving the security of big companies for the Internet economy. Should you sign up for the journey? What can you expect once you arrive at your destination? Or have you already missed the boat?

Until March 1999, Shaun Holliday knew exactly what he wanted in life. At 41, he was a fast-track executive at the Guinness brewery division of Britain’s giant Diageo conglomerate, overseeing more than 3,300 people and hoping to become a big-company CEO someday. When Holliday was a teenager, his father had nudged him in that direction, encouraging him to get an MBA and then to work for a major chemical company. In his first few jobs after business school, Holliday found mentors at Booz, Allen & Hamilton and at Frito-Lay Inc. — mentors who also pointed him toward a classic, big-company career.

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But in the midst of a Colorado snowboarding trip — without telling his bosses, his mentors, or his father — Holliday strayed from the trails to attend a meeting, arranged by a high-profile headhunter and venture capitalist, with a casually dressed 28-year-old bursting with big ideas. His name was Andrew Busey. He was the cofounder of living.com, an Austin-based company that planned to sell furniture online. The three-month-old company had no revenue, barely a dozen employees, and no chance of turning a profit anytime soon. Nonetheless, Busey believed that living.com could transform furniture shopping into a faster, easier, and more efficient experience for everyone. All he needed, Busey said, was the right CEO.

As the two men talked over breakfast, Holliday’s initial skepticism began to melt away. This was a remarkable opportunity, he told himself. It might be a once-in-a-lifetime chance. Yes, there was a risk that Busey’s vision was just a mirage — and that living.com might not make it. But that sense of danger was exhilarating. “I could have played it safe,” Holliday recalls. He could have stayed on the career track that he had chosen two decades earlier. But, he thought, wouldn’t he regret, 30 years later, having turned down the chance to be a pioneer in the Internet era?

When the men parted four hours later, Holliday knew what his next step would be. He hadn’t quite said yes to Busey’s overtures, but he was headed that way. That afternoon, he asked his wife how she would feel about leaving Ireland and moving to Texas. Two months later, he informed his boss at Diageo that he was about to walk away from an enviable career to see instead what he could do at a brash Internet startup. Then, in September 1999, Holliday began his new job. Standing on a tattered gray chair in an office corridor, addressing the few dozen onlookers who constituted his entire workforce, he explained why he had left Guinness and why he believed that together they could make living.com a great company. It was the first day of his voyage to an uncharted land.

Across the United States, thousands of executives are making a similar voyage. They are abandoning prized jobs at famous companies, walking out of corner offices at the likes of Avon, Goldman Sachs, IBM, Knight Ridder, and leading law firms and consulting shops. In doing so, they are jettisoning career assumptions and personal values that were cherished a generation ago — being part of a mighty, entrenched, time-tested corporation — for something utterly different. The new goal: to prove your merits at an Internet-oriented startup with no real assets or heritage but with huge ambitions.

The phenomenon has become so big, so rapid, and so relentless that it’s the business world’s equivalent of past Great Migrations. Indeed, many of the people who make this dramatic career leap invoke metaphors from history — of Puritans crossing the Atlantic four centuries ago to make a new life in the New World, of millions of immigrants streaming to the United States 100 years ago and gazing in nervous wonder at the site of the Statue of Liberty. In a prophetic 1996 essay, Tom Ashbrook, then an editor at the “Boston Globe,” explained his decision to embark on a new career helping to build HomePortfolio.com by declaring: “Some part of the urge to jump feels almost genetic, a seed of history and blood just waiting for the climate that calls it up. In all my life, I never felt closer to the experience of immigrant forebears than I do now. They sailed from old world to new. Now it’s my turn.”

The voyage is not always metaphorical. For hundreds of thousands of people from countries such as Israel, Russia, and Taiwan, migration to the new economy is a literal description of their plane flights and ocean crossings to Seattle and Silicon Valley. For the current fiscal year, Congress has authorized 115,000 H1-B visas, which are awarded chiefly to high-technology experts who aren’t U.S. citizens. That is nearly double the quota of a few years ago, yet it still isn’t enough. This year’s batch of visas was exhausted in less than six months. Now efforts are under way to raise the quota to up to 195,000 visas. For these new immigrants, Starbucks may be a more appropriate symbol of America than the Statue of Liberty, but the voyage to a New World is just as awe-inspiring, just as nerve-wracking, as it was 100 years ago.

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Big-company executives are heading to the online economy with a wide range of motivations and expectations. They see a big, open, uncharted land of opportunity — and wonder what it might be like to live there. They like the idea, intrinsic to the Internet economy, of being able to have an impact on the world around them — of launching products and services used by millions of customers — without having to be part of the vast, impersonal, insular bureaucracies. They hunger for less routine, fewer meetings, and more energy and excitement in their day-to-day work lives. And to be sure, they read tales of quick riches and overnight fame.

For all of the excitement, though, the modern-day Great Migration can be a harrowing experience — even if it doesn’t involve stormy, monthlong journeys on packet ships. Thanks to this spring’s NASDAQ meltdown, the finances of many Internet companies — even big-name companies — seem decidedly less secure than they did just a few months ago. And the reality of life in the dotcom world has lost some of its early romance: Is it all that desirable to give up your car service, your personal assistant, and first-class air travel — not to mention a collection of seasoned colleagues who know their way around an industry — to work at a desk fashioned from a door and to call staff meetings in which the average age of attendees is 28? It’s no wonder that more than a few big-company executives have looked across the gulf that separates their current world from the Internet economy, considered several offers from well-funded startups — and decided to stay put.

Yet it’s impossible to obscure the Internet economy’s continuous pull. In the new economy, “there’s a talent shortage at almost every level,” says David Beirne, a venture capitalist at Benchmark Capital, in Menlo Park, California. Beirne spends much of every week helping Benchmark recruit top-management talent into its portfolio companies. (In fact, he was the one who helped introduce Shaun Holliday to Andrew Busey.) A few years ago, prying candidates out of big companies was a dauntingly difficult challenge, he says. Now the chance to be part of “the next Amazon” or “the next eBay” is enticing enough that practically every established company has been poached at least once.

Such massive shifts don’t just create a sense of excitement among the people making the journey; they also generate profound unease among kinfolk who are left behind. Consider the mood in what is now Germany — a country that saw nearly a million of its people emigrate in the 1860s, even as the United States was in the midst of Civil War upheaval. During this time, German painters stopped immortalizing court scenes. Instead, they turned their attention to the most poignant drama of the time, painting families at piers, bidding farewell to emigrants. “No one can tear himself away without pain,” the “Deutsche Allgemeine Zeitung” declared in 1865, even as it marveled that “it is often just the best, the most respectable and efficient people who leave us.”

For those who are considering whether to set sail for the Internet economy, the Great Migration raises a collection of rich, important questions: Should you make the voyage? What do you want to achieve once you arrive at your destination? Do you know what life will be like there? Are you prepared for stormy weather? The profiles that follow provide some answers.

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Should You Make the Voyage?

For the past five years, working from midtown Manhattan, Michele James, 38, has been encouraging people to join the Great Migration. She is a onetime television executive who helped build an online media practice for Korn/Ferry International, one of the world’s largest head-hunting firms. She coaxed Robert Bowman, former president and COO of ITT Corp., to become CEO of Cyberian Outpost, an online merchant. She wooed John Caplan from a career in advertising to join About.com, an online guidebook, where he is now general manager and chief marketing officer.

“I ask people, ‘Do you want to be at a cliff-hanger?’ ” James says. “The Web is all about cliff-hanging. There are no rules — or else you’re making up the rules as you go along. If you have a high need for respect, then you shouldn’t be working at a Web company. Employees are going to think of themselves as part owners, and they aren’t going to be very deferential. Wall Street is going to be taking potshots at the company. Any senior manager coming into a Web company has to be able to live with that.”

To make the switch, she tells people, you need to be very comfortable making rapid decisions with limited information. You must be willing to improvise every month and sometimes every hour. You need to set priorities relentlessly: There will always be too much to do, and it’s up to you to figure out what offers the best payoff and what is ultimately only a distraction. You need to be a magnet for talent, building up a small company’s workforce in a hurry. And it helps to swallow one’s pride from time to time and to do some of the grunt work — work that is usually delegated at a big company but that won’t get done at a startup unless everyone pitches in.

“Your business card may read, ‘CEO,’ ” James says, “but you may end up doing your own public relations and booking your own travel and negotiating your own real estate. There will be days when it feels as if you’ve taken a demotion.”

Most of all, she says, people joining the Web economy need to be consumed by the idea that they are building something great. Sure, the chance to get rich is part of the allure, but if people are looking for nothing more than a stock-options jackpot, they are likely to be disappointed. Startups can be emotional roller coasters with many frustrating moments. Deals falter. New recruits back away from job offers. Promised financing doesn’t come through. It helps to have a burning belief in the business mission, so that setbacks will seem inconsequential.

Until this past winter, James watched the Web migration from the sidelines, in what she wryly calls her “guidance counselor” role. But then one of her best clients called about something closer to home. Mark Stavish, a senior vice president at America Online, needed a “chief talent scout,” and he thought that James might be the right person for the job. She demurred at first: She was very busy. She was happy in her job. She didn’t want to move near AOL’s headquarters, which at the time were in Dulles, Virginia. But Stavish persisted. James didn’t want to offend him; after all, she was already doing six searches for him and hoped for even more AOL business. So before long, she agreed to fly to Virginia for an exploratory meeting.

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Michele James was about to become a character in her own play.

At AOL’s headquarters, Stavish booked a conference room and began a PowerPoint presentation all about … Michele James! One slide showed all of the areas where AOL could use more recruiting muscle. Other slides explained why James was the ideal candidate to get the job done. “It was touching,” she recalls. “It was like getting a big bouquet of flowers.” Near the end of the presentation, Stavish looked James in the eye and said, “You’d be crazy not to do this.” She blurted out, “I think you’re right.”

Over the next few weeks, James and AOL hammered out terms. She wouldn’t have to live in Dulles full time; she could split her duties between New York and Virginia. She would coordinate outside recruiting, but she would also play a big role in internal recruiting, helping AOL deal with employee turnover, career tracks, and transfers. As she got ready to start her new job in May, James vowed to help AOL with all of the small things that add up to “recruiting etiquette.”

“Remember,”she said, “this is an incredibly stressful time in a candidate’s life. When you go on an interview, there are a thousand things to worry about besides the interview itself: Will there be a car to get me to the airport afterward? Who will call to let me know how I stand? Young companies don’t always handle these things as well as they could.” At AOL, 90% of the company’s job offers are accepted, and James wants to improve on that. If Miss Manners-quality etiquette helps her do that, she says, it will be energy well spent.

What Do You Want to Achieve?

In a converted warehouse in Oakland, California, Ralph Clark is getting ready to radically overhaul a page on his Web site — a site that took him nearly six months to build. For others, this might be a sad moment. But Clark, 41, is cheerful, almost playful. “We tried something that didn’t work,” he explains. “Now we’re going to do it right.” He is a cofounder and the CEO of BigBow.com, a gift-buying service that uses a combination of Web and email technologies to help parents, coworkers, and relatives pick out presents for people they care about.

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BigBow is trying to make it the hard way. Unlike some online gift businesses, it doesn’t have lavish backing from Silicon Valley venture capitalists. It doesn’t have a multimillion-dollar ad budget or tie-ins to top department stores. BigBow is operating on $3 million of venture funding from a Chicago investor — and about $300,000 of Clark’s own money. But the company has a catchy product line on its Web site and a patent on file for some of its innovative email technologies. It also has a gutsy, multiracial management team that is determined to show that Internet success stories can happen on the “wrong” side of the San Francisco Bay as well as in Silicon Valley.

A dozen years ago, Ralph Clark would have been the epitome of the Organization Man. He sold mainframe computers for IBM in Seattle, working mostly on the Boeing account. He was part of a generation of intelligent black engineers who integrated first high schools and colleges, and then major corporations. By the standards of the time, he was a terrific success. Yet he was starting to get restless. “Big companies have great camaraderie, and they can insulate you from a lot of stuff,” he says. “But they can put you to sleep.”For the next decade, he hunted for the right next step, getting an MBA at Harvard, briefly working as an investment banker for Goldman Sachs and Merrill Lynch, and then joining a series of small California software companies as chief financial officer. He negotiated the sale of one of those companies (for several million dollars), earning a nice windfall for himself — and the chance to decide at last what he really wanted to do.

The brainstorm happened at Mama’s Royal Cafe, in Oakland, in the midst of a December 1998 breakfast with Anne French, a former Intuit marketing manager. She and Clark didn’t know each other well, but mutual friends had suggested that they meet. Both wanted to do something Internet-related. Both thought that commerce with an email twist had great potential. And, as they batted ideas back and forth, they suddenly came up with an idea for their own company: helping busy people get the right gifts as efficiently as possible.

More than a year later, Clark remembers those first few months as a magical time. He, French, and a third cofounder, Matt Strain, mapped strategy over long lunches at a few favorite restaurants that they jokingly referred to as “our virtual offices.” They drew up business plans that called for a September 1999 launch, 55,000 users by year-end 1999, and $4.5 million in revenues by the end of 2000. They were way too optimistic about everything, of course. But they pushed forward, convinced that this was an opportunity to create their ideal company — one that they had always wanted to work for.

“The ‘IBM’ me never would have done that,” Clark says. “But I made a decision: If I’m going to bet on anyone, I’ll bet on me.” He decided to draw an annual salary of $120,000 — barely half of what he had earned in his best year in investment banking. That would be enough to support his family, he figured, and it would send an important signal to his employees. Pay rates at BigBow would be reasonable but not lavish. Ownership of the company would be spread widely, and if people wanted to get rich, they would need to do all of the things necessary to ensure that the closely held company stock would be really valuable someday.

Sometimes, being the underdog helped. When BigBow needed someone to oversee its computer-programming efforts, Clark set out to recruit Maira Benjamin, an acclaimed black manager in the engineering department at Luna Information Systems, an established Internet-technology company. Clark acknowledged that BigBow was a younger company at a riskier stage of development than Luna. But if Benjamin joined, he said, she would have an opportunity to work on projects that could make millions of consumers happy — and to show that a multiracial team in Oakland could accomplish truly great things. Just one day later, he got a delicate, handmade, red card from Benjamin that said, simply, “Yes! Maira — your new director of engineering.”

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As crunch time arrived last winter for BigBow, which still needed to get its Web site up and running, a second migration drama took shape at the company. Clark and Benjamin knew that they needed a lot of computer programmers in a hurry. Rather than hire them full time, they called Vajih Khan, a Pakistani immigrant who, four years earlier, had cofounded his own Internet-consulting firm, NetPace Inc., in nearby Union City, California. Could he help? The answer was yes. Within days, a half dozen NetPace programmers arrived at BigBow’s headquarters. Most of them were Pakistani immigrants, like Khan, and the observant Moslems among them would take periodic prayer breaks. In an attempt to provide his employees with proper prayer space, Clark bought a half dozen prayer rugs and offered them as company perks.

Now Clark is trying to figure out whether he might someday be able to take BigBow public. That may have seemed a realistic goal in February. But with most consumer-oriented Internet stocks having taken a pounding this spring, an IPO is hardly assured. As much as he would like to keep BigBow independent, Clark isn’t ruling out the possibility that at some point, it may make sense to sell the company. If BigBow doesn’t work out, he says, “it would hurt really badly. But it wouldn’t be a disaster. I’d find a job working for someone else. We’d be able to say, ‘We did something really cool. We invented a new email technology. We just weren’t quite able to make it into a successful business.'”

Do You Know What Life Will Be Like?

Patrick McCue still remembers the sweaty-palm details of his first day at Blue Martini Software six months ago. At age 33, he was a well-traveled software consultant. He had worked on the information-technology team at Coca-Cola, in Atlanta, for two years. He had been a Chicago-based senior manager for PricewaterhouseCoopers. He was used to the pace of big-company orientations for new employees: some paperwork in the morning, a company video in the afternoon, and maybe an on-site tour in a day or two. “It could be Thursday before you began any real work,”McCue recalls. When he joined Blue Martini in January, he knew that he was becoming part of a young, hungry Silicon Valley company that helped clients build brands — on the Web and elsewhere. He would be running a Chicago-area field office for the company, helping to negotiate business alliances. But would that really mean a totally new work pace? He wasn’t sure.

By 10:25 AM on Monday, January 3, McCue knew that he was not at Coca-Cola anymore.

He had just stepped off of a plane and caught a cab to Blue Martini’s San Mateo headquarters. His boss, VP of marketing Bill Evans, gave him a hurried hello and then hit him with stunning news: “We’ve scheduled you to do a presentation at 2 PM to about a dozen key managers. You’re going to explain what sorts of alliances you want to negotiate. I’d give you a laptop so you could work up some slides, but we don’t have one ready for you. You’re on your own.”

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Fortunately, McCue had brought his own laptop. When show time arrived, his presentation was ready to roll. Partway through his slide show, he began making sense of his audience: Here were the sales specialists who could be his allies. There was the finance specialist who would need more detail on the numbers. When the talk was over, Evans took McCue aside and told him that he had done just fine. “I knew right at that moment that I had made the right choice to come here,” McCue says.

Like swarms of other consultants, McCue has made the leap to a Web career partly out of hope — and partly out of frustration. “I wanted to be part of a get-things-done culture,” he says. Blue Martini is young enough that each new business success — even just a small contract award — is celebrated with a companywide email lauding the managers and salespeople who made it happen. “You’d never see anything like that at Coke,” he says. “A companywide email would crash the server.”

When he joined Blue Martini, McCue took a modest pay cut but received a hefty stock-options package, which could be valuable if the closely held company completes an IPO. That’s a big contrast with Coke, where he participated in a much tamer employee stock plan, or with PricewaterhouseCoopers, where, as a nonpartner employee, he didn’t have any direct stake in the firm’s fortunes. At Blue Martini, “I get excited about what the stock could be worth sometimes,” he confides. “But I try not to do any calculations. I call it ‘spreadsheet masturbation.'”

Parts of McCue’s new career have been tougher than he expected. He thought that being at a smaller company might give him more time to see his three small children and maybe even to refine his golf game. Not so. “When I’m in California, I work at least 14 hours a day,” he says. “And back home, I start at 6 AM, take a dinner break at 5:30 PM, and then go back to work at 8:30 PM and work for a few more hours. This isn’t as easy as people think.”

At first, McCue says, he thought that he would miss the cachet of working at one of the world’s largest companies. “Five years ago, you would have had to explain what you were doing,” he says. “If you were with something small and new, people wouldn’t respect your organization right away. That definitely would have been a frustration. In Atlanta, people would always say, ‘Wow, you’re at Coke.’ But now, the whole culture has changed. Today, when you say you’re with a startup, people’s ears perk up. They’ve heard the buzz. It’s much cooler to work for Blue Martini than it is to work for a big-five consulting firm.”

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Is It Really So Hard to Stay Behind?

Young guns Michael Laub and Nick Stowe had expected a hero’s welcome. Ten hours earlier, they had set foot on Stanford’s business-school campus during a recruiting trip, convinced that swarms of first-year MBA students would plead for the chance to be a summer associate at Bain & Co. After all, when Laub, 31, and Stowe, 30, joined Bain just a few years earlier, they had needed to outshine hundreds of other promising candidates.

But this time, something was wrong. Some of the best students didn’t even show up. Those who did come for interviews spoke of Bain as, perhaps, a backup choice. What these students really wanted, they confided, was a chance to work at an Internet startup. As Laub and Stowe drove back to Bain’s San Francisco offices in March 1999, they decided that it was time for drastic action. Like many consulting firms — and, for that matter, like many investment banks, law firms, and other service firms — Bain had somehow lost allure with talented twentysomethings. If Bain didn’t react, it would have trouble attracting and keeping the best talent. And, as Laub and Stowe came to realize that spring, it wasn’t just the Stanford students. A young analyst had left Bain in early 1998 to join eBay, just before the online auction company went public. Now her eBay stock was worth maybe $3 million — far more than she ever could have earned at Bain. And in April 1999, one of Bain’s brightest young consultants, Mark Vadon, left to form an online gem-retailing company that later became known as BlueNile.com. He took a couple of Bain colleagues with him, and, when asked why he was going, he said something that unnerved Bain veterans: “I’ll know in a year whether this will work or not. And whatever happens, I think I’ll learn more by doing this than I would by staying.”

Within weeks after the downbeat Stanford excursion, Laub, Stowe, and their colleague Brian Krim, 28, had persuaded Bain’s 40 San Francisco-based partners to make the “Internet challenge” the main topic of their office’s annual off-site in July. And in a stunning reversal of form, the three young men were told that they could run most of the meeting, while partners listened. So at the elegant Auberge du Soleil resort, in California’s Napa wine country, the junior consultants got their chance to shake up the old order — while managing director Steve Ellis helped them devise solutions.

They began the meeting by asking, “Why do talented people come to work at Bain?” Fundamentally, they said, recruits join because they think that the consulting firm offers extraordinary learning opportunities. They think that learning will translate into “career compression” — the belief that two years at Bain equals five years in the industry and that any ambitious person can accomplish more, faster, at Bain than on the outside. Ultimately, that is supposed to translate, too, into superior pay packages. But Internet startups are suddenly shaking apart that relationship, they said, by creating a new learning-and-career channel that seems to be moving even faster than Bain does.

But Bain could get back in the game, they contended. It could give young consultants greater chances to work with startups, instead of dealing only with giant, old-economy clients. It could negotiate more actively to take part of its fee in startup equity, rather than insisting that small companies pay in cash for Bain’s services. And Bain could give younger employees who were below the partner level a chance to share in that equity pool. If things went well, that stock-participation package might be worth as much as $1 million per consultant over four or five years. It might not match the bonanzas at the most spectacular Internet startups, such as eBay, but it could be very competitive with the realistic prospects at 80% to 90% of all startups.

Within eight months, all of those changes were implemented — not just at Bain’s San Francisco office but at the entire firm worldwide. And to the delight of both Bain’s older partners and its younger rebels, the company’s rising stars began to see the consulting firm as the right place to stay, even if Web-based companies kept wooing them.

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“There was a time when I asked myself, What am I missing by not making the jump to an Internet company?” Krim says. “Am I stupid? Or am I just too risk-averse?” Lately, though, Krim feels better about staying at a long-established consulting firm. The progress reports from Web-minded friends haven’t been nearly so upbeat lately. Some of them are struggling hard to raise more money amid serious losses. In other cases, companies that were supposed to have filed their IPO registration statements by now are many months behind schedule and haven’t even launched their Web sites yet.

Meanwhile, says Krim, “I’m building experience. I’m working on everything from a dotcom’s business plan to the reorganization of a multibillion-dollar company. I’m not stuck holding a single lottery ticket with a label that reads, ‘I hope it works out in four years.’ “What’s more, he says, at Bain he hasn’t had to move bookcases, string phone wire, or endure other indignities of getting a startup under way. “If you’re stuck doing that at a startup,”he says, “you probably didn’t raise enough money.”

Do You Thrive on Change?

Karla Walsh didn’t like change at first. In the late 1980s, she actually thought that she might stay forever at MCI Communications, where she worked as a Chicago-based marketing manager, pitching cheaper long-distance phone service to the public. “It was a great opportunity,” remembers Walsh, 36. “Great people, great product, and all of this room to invent the rules as we went along. “But over the next 10 years, she switched cities three times and employers twice, moving to Phoenix, Los Angeles, and San Francisco on behalf of first Citicorp and then the American Automobile Association (AAA). Those moves weren’t her idea. They were made necessary as her husband got a series of partner-track promotions — and transfers — at his consulting firm. But as Walsh packed her belongings into one moving van after another, she discovered something unexpected about herself.

“I realized that I could thrive in organizations with significant change,” she says. “After being plucked out of all of these positions, you get to be pretty good at reinventing yourself. “In a way, it was almost fun. Learn a new industry’s jargon. Mine through customer data in fresh ways. Promote a different brand every few years. Change stopped frightening her. Instead, she became refreshed and outright enticed by it.

So in 1993, when Walsh’s AAA job moved her to San Francisco, where she found a home in Silicon Valley, she laid the groundwork for her most daring reinvention to date. She got increasingly involved in the association’s Web site and became an early customer of E.piphany Inc., a Web-site-development company. In early 1999, E.piphany’s founders introduced Walsh to Doug Mackenzie, a partner in the renowned venture-capital firm Kleiner Perkins Caufield & Byers. They chatted, and Mackenzie came away with the clear impression that if he could find the right job for her, Walsh might be ready to jump to an Internet startup.

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Over the next few months, Walsh periodically visited Kleiner’s offices to do the career equivalent of window-shopping. One startup struck her as intriguing but focused on too narrow a market. Another was too far along in its development work; the really gutsy, early creative steps had already been taken. But Mackenzie kept urging her to come back. “She got the Internet right away,” he recalls. “She was a marketing talent. And she had a real sense of urgency that I hadn’t expected.”

Then Walsh met Bippy Siegal, a 32-year-old entrepreneur who had just gotten a first round of funding from Kleiner to create an online barter exchange. Walsh liked his plan from the start. “It was a big idea,” she recalls. “It was going to be a complex-transaction environment, which meant that you could create a deep, broad customer base and mine the data. Plus, there was a lot of energy around the company. If I was going to leave corporate America, I wanted to get in at a startup early. I wanted to create a brand.”

In June 1999, Walsh started working for Siegal’s company, then called Doublebill.com, and discovered just how early she was. She was employee number eight, in a company that had just leased 65,000 square feet on the edge of Silicon Valley, in Redwood Shores. Her office abutted a vast, bare floor that someday would either be filled with coworkers — or become an embarrassing, empty testament to everyone’s excessive optimism. Even the company’s initial name didn’t sound right. She quickly got Siegal’s approval to hire a naming consultant to come up with a more-enticing alternative.

Gradually, Walsh started rearranging things to be the way she wanted them. She recruited a half dozen marketing aces whose work she admired. Among them was John Faville, a longtime ad-agency executive, who found her enthusiasm so contagious that he quickly told her, “How can I say no?” She researched alternative names and finally recommended that they call the company BigVine.com, a suggestion that Siegal and the board embraced. And she struck a vital partnership with American Express, which took an ownership stake in BigVine and agreed to promote the barter service to its 2.1 million small-business cardholders and merchants.

After about a year at BigVine, Walsh says, she’s found the excitement that she was looking for — and occasionally even more of it than she expected. New recruits’ cubicles now pack the once-bare carpet outside her office. The BigVine logo is becoming a recognized brand, and, to her delight, the company was mentioned in an American Express annual report. Web-site traffic is brisk enough that company engineers have disconnected a short-lived gong that used to go off every time a customer bought or sold something. “It was making too much noise,” Walsh explains.

But in an unexpected switch, Walsh says that she sometimes has to tell her CEO and her board that the world just won’t move as fast as they want it to. That’s especially true in negotiating alliances with long-established companies like American Express, she says. In the can-do culture of the Internet, executives sometimes expect everything to be done in hours. It isn’t that easy. Throughout the multimonth American Express negotiations, for example, Walsh became the voice of caution, reminding everyone, “American Express is bigger than we are. We have to move at their pace.”

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Are You Prepared for Stormy Weather?

It’s 11:30 AM, and living.com CEO Shaun Holliday is about to get his third surprise of the morning. That’s typical of his new life — a life in which 300 employees are building an online furniture, gardening, and home-decorating store, improvising feverishly as they go along. First Holliday learned that version five of living.com’s Web site was due to launch in 24 hours, with some crucial elements in different places than he expected. Then his merchandising chief told him that efforts to include Waterford crystal on the site had stalled — and that his help was needed to get the plan back on track.

But the morning’s most startling moment comes when Holliday stops to chat with living.com’s team of Web writers and asks what they are working on. At first, they cover all of the things that he expects: new copy to promote gardening supplies, perky descriptions of sofas and the like. But then, with an impish grin, Web writer Roger Munford confesses that he has been creating the latest installment of “Dead Men Don’t Decorate,” an elaborate Raymond Chandler spoof in which a slinky female detective chases furniture counterfeiters. No one asked Holliday or anyone else in senior management for permission to launch the story; the writers just decided to sneak it into an unnoticed corner of the “magazine” section of living.com’s Web site.

Another CEO might have fired the rogue writers on the spot — or at least asked them in ultra-intimidating tones to justify this use of time and resources. But Holliday just smiles. “Ah, you writers!” he says. He lets them carry on with their mischief and heads back to his office for a strategy session with his chief financial officer.

Such adventures are all part of running a Web business — and perhaps even part of what attracted Holliday to living.com in the first place. “I love change. I love chaos. I love ambiguity,” he says. “As soon as the road is clear, I need to do something different. Even if I’m looking at a golden path, I get bored.” He pauses for a moment and then whispers, “I have a history of this.”

In 10 months on the job, Holliday has surrounded himself with other big-company refugees who also came looking for excitement. His chief marketing officer, Janet Mitchell, used to work at Duracell. His financial officer, Jay Shreiner, was at Kellogg Co. His chief Web officer, John Clendening, arrived from First Union Corp. And his head of merchandising, Helaine Suval, was recruited from Avon.

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To Holliday’s delight, wooing top talent to a small, unprofitable Austin company has proven to be far easier than he had predicted. He managed to pry human-relations chief Peter McCue, for example, out of a top job at Motorola with just one phone call. “I had been trying for years to get Peter to come work for me at Guinness,” Holliday says. “I couldn’t quite land him. But in living.com, he saw an opportunity to create a model company for the 21st century. We had the outlines of a deal within an hour of our first conversation.” In some cases, Holliday acknowledges, he is helped by a public belief that there isn’t much time left. If people want to make a big splash in the Internet economy, he suggests, they had better get started now, before most of the best jobs are taken and most of the industry-defining companies are fully staffed.

From the start, Holliday and his team have made decisiveness one of their cardinal virtues. Job candidates typically are given a week or less to decide whether they want to work at living.com. At many Web-team meetings, managers begin by “time-boxing” a decision. They give themselves a 30- or 90-minute period to decide what to do, agreeing to make some decision — any decision — before that interval expires. Staff debates become terse and even caustic, but that’s just fine. Even junior employees are allowed to interrupt a long-winded speaker with a two-word epithet — “Rat hole!” — when they believe that time is being wasted.

“Speed matters in this business,” says John Clendening, 37, living. com’s chief Web officer. “We’ve learned to focus enough on what’s right” — even if more time and more data could lead to a more finely crafted alternative weeks later. Better to take some action fast and recalibrate later than to let precious time tick away.

The belief that change — and decisiveness — can be good for their own sakes harkens back, in some ways, to the popular beliefs of the mid-19th century, when westward migration was at its peak. Social commentator Horace Greeley, who popularized the phrase “Go West, young man,” wrote in 1871: “Most men are by migration rendered more energetic and aspiring; thrown among strangers, they feel the necessity of exertion as they never felt it before. Needing almost everything and obliged to rely wholly on themselves, they work in their new homes as they never did in their old, and the consequences are soon visible all around them.”

But such enthusiastic commitment to change always sounds a little better from a distance than it does up close. On the whole, people crossing the Atlantic or populating the American West in the 19th century did find a better life. But during any given week, they might be battling hunger, disease, flooding, or a thousand other problems, big and small. In much the same way, the pioneers of the Web economy aren’t always cushioned from the shocks of the wider world — or from human temperament.

Shaun Holliday says that he sees the bumpier side of this migration in two ways. First, he acknowledges that knitting together a harmonious team is tougher than expected. In some ways, it’s as if he has thrown together dozens of total strangers for a long ocean or train journey. And even if they want to work together, they aren’t quite sure how to pitch in without seeming either too pushy or too timid. In the most immediate flash point, Holliday is already refereeing tensions between his merchandisers and his Web-development team. The merchandisers have big, bold ideas about how items should be displayed on the Web site. The Web developers must balance such requests with dozens of other demands on their time. They want each major upgrade to be carried out with military precision, so that it doesn’t crash the site or impair performance by overburdening living.com’s data servers.

Holliday’s other challenge is thornier still. When he joined living.com, financial markets were enchanted by companies like his. Even before the closely held company launched its Web site, living.com was able to raise nearly $40 million of venture capital on terms that valued the business at approximately $300 million. In March, Holliday was able to talk about extremely ambitious financial goals for the company to meet by 2003: $1 billion in sales, $100 million in operating profits, and a $10 billion stock-market valuation.

Now, with Internet stocks having been pummeled this past spring, the stock-market goal seems highly optimistic. In May, bowing to tougher circumstances, Holliday and his team of directors approved a belt-tightening program that, among other things, reduces the number of executives reporting directly to Holliday. Such pruning changes the career paths of some recent recruits, but Holliday defends the move as the best way to position living.com properly in today’s harsher environment.

Rank-and-file employees are mindful that times have changed, and their concerns surface quickly. At a recent staff lunch, Holliday asked a dozen living.com employees what was on their minds. The first question came from a recruiter who joined living.com in late 1999. “There was a Forrester Research report that came out recently,” she began. “It said that many electronic-commerce companies might run out of cash. My grandmother saw a newspaper article about that report, and she called me to say, ‘Girl, you’d better leave that company. Dotcom isn’t good anymore.’ So what am I supposed to tell my grandmother?”

Holliday took a swallow of his soda and did his best to calm her. “I do think that there has been a permanent shift in the way that many of these companies are going to be valued,” he said. “There was a huge flood of cash that went into e-commerce companies last year, almost indiscriminately. There will be significant fallout, and this will be a hard year for us in some ways. But the good news is that we’re already the industry leader in our category. There might be just two to three companies left playing in every category, but that’s good for us. It’s going to be survival of the fittest, and companies like Amazon, priceline.com, and living.com will do well.

“Someday, when we look back on this year,” Holliday declared with conviction, “we will remember it as the most important and the most successful year in our company’s history.”

Senior editor George Anders (ganders@fastcompany.com) recently migrated to Fast Company after a 20-year career at the “Wall Street Journal.”