January 17, 2001:
Doug Elwell, Inc. in the Chicago Tribune
The following text is reproduced from the Jan. 17, 2001 Edition of the Chicago Tribune's "Working" section.
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Options Open
By Lisa B. Song
Tribune Staff Writer
January 17, 2001
It was the sweet
smell of stock options that helped lure 23-year-old Jim
Stathopoulos to his first job out of college at Chicago-based
Internet consulting firm MarchFirst Inc.
Fresh out of
Northern Illinois University in DeKalb,
Stathopoulos took a job as a systems analyst with the company
a year ago.
MarchFirst, which had just been created from the
merging of Whittman-Hart Inc. and USWeb/CKS, was slated for
giant growth spurts, and Stathopoulos got in on the frenzy.
He invested over $3,000
on company stock. He said his family spent thousands more.
But the stock began to tumble just months later, and in
November he was laid off, just shy of his one-year anniversary
at the company.
"I think being laid off was harder on me because it was my
first job out of school," Stathopoulos said. "And it was a
double whammy because of how much I had invested in the
company."
Stathopoulos is one of droves of Chicagoans laid off from
local technology companies last year. Morale may have been
stung and potential stock-option fortunes left by the wayside,
but the legions have moved on--professionally and mentally.
Laid-off Internet workers are finding jobs on average in a
week--some even in a day--because the number of cuts still
pales in comparison to the number of workers needed, said
Diana Eagen, a recruiter at
Systems One, a tech placement firm
in the city.
Web-based technologies are still the most sought-after in
the job market, with the demand remarkably similar to what it
was at the height of the dot-com charge earlier last year,
Eagen said.
"While consumer-focused e-commerce companies may be laying
people off or even shutting down, there are an immense amount
of people needed in database-driven development and
business-to-business and business-to-consumer Web site
development," she said.
"Some of them may have to take a pay cut initially or have
to take a step backward, but the highly-skilled,
object-oriented, Web-based designers and information
architects who have experience with customers and clients are
not going to take a cut," Eagen said.
When tech stocks soured last spring, venture capitalists
grew weary, wide-eyed Internet companies were forced to
downsize in relentless pursuit of cost cutting, and the net
result was mass layoffs.
Locally, companies that reduced their workforces last year
include MarchFirst; Web-consulting firm
Xpedior Inc.;
Britannica.com;
MVP.com Inc.,
an Internet sporting-goods
retailer backed by sports icons, including Michael Jordan; and
Divine interVentures Inc.-backed BeautyJungle.com, an on-line
cosmetics store that folded last November.
The beleaguered Internet conglomerate Divine, founded by
Andrew "Flip" Filipowski, also trimmed its staff last year.
Chicago-area layoffs from Web commerce, content and
services companies last year are estimated at around 1,000,
said Shaye Mandle, president of the
Illinois Coalition,
an organization that encourages technology-based economic
development in the state.
Mandle said hard data on layoffs is difficult to obtain
since the toll is so recent. Many smaller firms also do not
disclose their numbers, he said.
Mark Koulogeorge, who specializes in Internet investments
for Chicago-based
First Analysis Venture Capital,
said the
number of local technology-related layoffs last year climbed
closer to 2,000.
"In a normal year, just in the traditional, creative
construction of companies going out of business because they
are out-competed by other folks in Chicago, [the layoffs] are
probably 1,000 to 2,000," Koulogeorge said.
"Remember it's not just the guys at Divine cutting back or
the folks at
DigitalWork.com and the venture-backed
companies," he said. "It's also some of the public companies .
. . such as
FTD.com (a Downers Grove-based online florist)
that realized they don't have good access to capital that are
cutting back."
Doug Elwell,
former creative director at Xqsite, a
Web-development start-up backed by Divine, was laid off in
November with about 10 other employees at the Lisle-based
office.
"I packed up my work belongings in 15 minutes and exited
the building," said Elwell, 32.
And he wasted little time in getting his grounding back.
After taking a week hiatus to Iowa's Effigy Mounds National
Monument, Elwell began a mission to kick-start his own
venture--Doug Elwell Inc.--a Web communications consulting
firm.
Within a month, Elwell's company was officially
incorporated.
"I wouldn't go toward another dot-com again--unless I was
the chief information officer or the president of the
company," he said.
The reward working for a Divine company was the stock
options, Elwell said, which he said quickly disappeared in
June "when the stock fell and morale at the office became
abysmal."
Elwell, who said he was paid $55,000 a year, opted to take
a 20 percent pay cut in order to get stock options at Xqsite.
"That turned out to be a big mistake," he said.
For Amy Minick, job transitioning after being laid off last
year was seamless.
Minick, 29, worked as the office manager and in human
resources at BeautyJungle.com before she was let go along with
20 other employees in November.
While serving her last two weeks at the job, Minick landed
a similar position at a Web applications service provider in
downtown Chicago. She wished to keep the company's name
confidential.
"This time I asked more questions during the interview:
`What is our funding? What is our burn-through rate? What is
our business plan?' I am savvier now and hope for things, but
I don't expect as much," Minick said.
But finding a new job quickly doesn't completely alleviate
the angst of being laid off, especially with the strong level
of comradeship often found at start-ups, Minick said.
She was passionate about her role at BeautyJungle. She had
been with the company since its inception in May 1999, where
on any given day she was a Jane of all trades.
"I worked in benefits administration, conducted new
employee orientations and even played amateur phone
technician," Minick said. "It's demoralizing to have something
you've worked on from the very beginning to just vanish into
ether," she said. "I'd rather we got bought out than to have
gotten laid off."
Although he was inundated with interested recruiters just
days after posting his resume on
Monster.com, Stathopoulos,
formerly of MarchFirst, said he limited prospects to
"companies only if they've been around for at least five
years."
"I just want to work for a big consulting company or a
manufacturing company where their sole revenue isn't from the
e-commerce," he said.
Stathopoulos took his time job hunting, spending more than
a month interviewing. Over the holidays he finally met his
match: After three meetings at
Accenture,
formerly Andersen
Consulting, Stathopoulos accepted a position as a support and
development systems analyst at the Northbrook office.
This time what drew him to the job was the company's growth
and technology training opportunities, he said. Also this time
around, Stathopoulos received a signing bonus in cash--not in
options.
Layoffs at Internet commerce and content businesses will
not be vanishing anytime soon, according to George Nichols, a
stock analyst with Chicago-based
Morningstar.com,
an online equity analysis company.
"The shakeout is not done yet," Nichols said.
"The number of layoffs might level off later this year, but
in the meantime there are plenty of precarious business models
out there and incubators and venture capitalists that are
still withdrawing their money," he said. "A lot of these
start-up companies that are dependent on them are having their
training wheels pulled off and they will have to crash and
burn."
But the crashing and burning won't nearly be as painful as
it was during the latter part of 2000, Mandle of the Illinois
Coalition said.
"We have a tremendous amount of intellectual capital and
this will put us in a position to go forward and excel. It
might not feel so good right now, but it will be," he said.
"You will see companies such as MarchFirst start adding
people," Mandle said
That would be good news for Stathopoulos, who said he
doesn't feel any resentment toward the company. The 2
1/2-month severance package, he said, gave him adequate time
and the financial means to look for a new job. And he is still
holding out hopes that MarchFirst will swim.
"I still have my shares, but they will be at a loss and
worthless for now. I could buy a pack of cigarettes with that
money," he said.
Meanwhile Elwell is busy digging a business niche for
himself, which he realizes may not be fulfilled immediately.
"I may have to wait until I'm 40--and not 35--to hit $1
million, and I may have to take a pay cut initially," Elwell
said.
In the interim, freelance work garnered through contacts
from previous jobs in the print and Web industry have been
keeping him afloat financially. And he's also putting to good
use all the skills that built up his resume over the years.
"I'm full service; I'm installing computers, consulting on
communications infrastructure and implementing advertising
strategies for clients," Elwell said.
"I would have gone off on my own eventually anyway, so in a
sense it's good that this [getting laid off] happened."
You can also view the original article on the Tribune's site by clicking
here
(you must have an account with the Tribune to view it).
Brand Warfare: 10 Rules for Building the Killer Brand
David F. D'Alessandro
Rating:
Powerful lessons on how to build and sustain your own "killer brand".
Creating and sustaining a good brand is the most complex and perilous task any business will ever face, yet nothing is as misunderstood. Under the direction of marketing wizard David D'Alessandro, John Hancock transformed itself from a sleepy old life insurer into a leading financial services giant, with a sustained 20% annual rate of growth. In Brand Warfare, D'Alessandro draws on his personal experience as a brand-builder and examples from America's smartest and most foolish corporations, developing principles that you can use in any market. At the same time, he creates an entertaining picture of the marketing business with anecdotes that convey a keen sense of the absurdities of corporate life, balanced by a tremendous respect for the consumer.
This tough-minded, funny, and refreshingly candid book gives you a proven roadmap for marketing success as you learn:
Why every business needs a good brand to compete
Why consumers need good brands as much as good brands need them
Why sycophancy from the agency and meddling from inside the company will sink your campaign every time
About sponsorship: how to avoid being taken, and how to make the investment pay for your brand
Why it's as important to market your brand to your employees as it is to your customers
Why every business decision should be filtered through the prism of the brand
Gonzo Marketing: Winning Through Worst Practices
Christopher Locke
Rating:
The coauthor of the no-more-business-as-usual blockbuster
The Cluetrain Manifesto — which basically told Net-age marketers to stop talking at their markets and start conversing with them — follows up with a book that's more a highly entertaining, nimbly erudite screed against our current mass-market, mass-media culture than it is a recipe book for e-commerce marketing success in the post-cyberboom era. Writing in a paler imitation of the profanely irreverent, freely associative "gonzo" journalism style pioneered by his obvious idol
Hunter S. Thompson,
Locke starts with the by-now-familiar idea that old-style mass-marketing "broadcast" advertising just won't work on the Web. Indeed, he says, conventional print-ad tactics as embodied online by banners and pop-ups might actually generate more ill will than sales, and that's why companies must use the Web to somehow enjoin their products and services to the quirky niche interests of the gazillion individual cybercommunities (or "micromarkets") whose greatest advantage for marketers is how freely and speedily their members talk among themselves, touting a brand when and if it's truly deserved.
The Virtue of Prosperity:
Finding Values In An Age Of Techno-Affluence
Dinesh D'Souza
Rating:
In The Virtue of Prosperity, former White House policy analyst Dinesh D'Souza offers the first
in-depth analysis of the spiritual and social crisis that has been spawned by the New Economy and
new technologies.
The chief problem societies have faced "since the time of the Babylonians," writes Dinesh D'Souza,
has been the problem of scarcity. "But now that age has passed, and America has a new problem: coping
with prosperity." It's a good problem to have, but also a serious, even debilitating, one. "The moral
conundrum of success," the author continues, means that all too often, "the body is flourishing, but
somehow the soul still feels malnourished." D'Souza is well known for his bestselling conservative
books
Illiberal Education,
The End of Racism,
and
Ronald Reagan.
On these pages, however, he seems to
set politics aside to ask deep questions about the meaning of life in a world of material abundance.
(Review by Amazon.com)
The Monk and the Riddle:
The Education of a Silicon Valley Entrepreneur
Randy Komisar, Kent L. Lineback (Contributor)
Rating:
Prospective entrepreneurs may think they know everything there is to know about starting a business in Silicon Valley. They can draw up business plans, have meetings with venture capitalists, maybe even get funded and actually launch a start-up. However, in The Monk and the Riddle, Silicon Valley sage Randy Komisar reasons that's only half the equation for success. And it may not be the important half. Komisar has worked with a number of companies — Apple, LucasArts Entertainment (the gaming division of George Lucas's empire), and WebTV among them — and has come to a rather startling conclusion: if you can't see yourself doing this business for the rest of your life, don't start it. In other words, he wants to see passion and purpose in business, not just spreadsheets and a by-the-numbers business model.
To illustrate, Komisar takes the reader through a hypothetical Silicon Valley start-up, with an eager entrepreneur named Lenny trying to get funding for an online casket-selling business. As Komisar helps Lenny find the real purpose of the business, the passion behind the revenue projections, he reflects back on his life as an entrepreneur. Komisar emerges as a master storyteller, the kind of guy you'd feel honored to share a bottle of wine with. And you believe his conclusion: "When all is said and done, the journey is the reward." It's great if you've made billions on the journey, but the important thing is that you do something you can truly throw yourself into.
(Review by Amazon.com)
Burn Rate
Michael Wolff
Journalist Michael Wolff is a recognized pioneer in the business of cyberspace, meaning he has been developing products and services for the online world since the dark ages of 1994. During the intervening years, however, not all the activities he engaged in, nor all the people he dealt with, left a pleasant taste in his mouth - although, to be sure, his cumulative adventures certainly have been very lucrative.
In Burn Rate: How I Survived the Gold Rush Years on the Internet, Wolff pulls few punches as he candidly and methodically recounts the single steps forward and multiple steps back that marked his experiences while trying to transform a fledgling print media enterprise into a towering New Media colossus. After developing a series of
"NetGuide"
books that proved hugely successful, he attempted to transfer the concept to a variety of online offshoots and in so doing connected with
Wired
magazine, Time-Warner's Pathfinder, the late Robert Maxwell's media empire,
AOL
, assorted venture capitalists, sundry competitors, and numerous would-be partners. Burn Rate is a fascinating tale
that might best be characterized by the old adage that warns us to "be careful what we wish for, for we just might get it."
(Review by Amazon.com)
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