Surviving After the Dot-Com Collapse
By Reid Goldsborough
How can you make money on today’s lean-and-mean Web? Ever since the dot-com collapse of 2000 and 2001, with thousands of Internet companies shutting down their sites and billions of dollars lost in new-economy investments, people have been asking this question. Many have tried to answer it.
Some of the best answers come from a new book by Bill Lessard and Steve Baldwin, one-time Net entrepreneurs themselves. NetSlaves 2.0 is a follow-up to their first book, NetSlaves, which chronicled dot-com workers who put in interminable hours for the pot of silicon at the end of the rainbow that for most never materialized.
Their new book is more than yet another Internet revolution postmortem. It’s the story of what became of the foot soldiers who worked the trenches in the Net economy, from those who survived the collapse with varying degrees of damage, staying in the game as best they can, to those who have given up on the industry entirely.
Lessard and Baldwin put their own Net stake down, creating a Web site by the same name as their books where dot-com workers could commune in cyberspace. In June they ceased operations while keeping a shell of their site still online — as a “floating monument to failure,” said Lessard in a phone interview. They recently took this down as well.
At the end they were charging $4.95/month for subscriptions and running banner ads. They were getting 700,000 page views per month at their peak, but ultimately, like so many others, they “didn’t make money,” Lessard said.
From their own experience and that of the Net workers who used their site as a virtual water cooler, they learned some good lessons, which they share in their book using the style of the online world — informal, energetic, brash, funny, sometimes confrontational or disjointed, often engaging. To succeed today after the bust, “just do the opposite of what everyone did during the boom,” they write. “Anything less, and you’re toast, pal.”
For those wanting to make a go at e-commerce, they write, success will “belong to the scrapper who watches every penny and bends over backwards for customers. (Radical thoughts indeed for an industry notorious for putting the customer last, wasting billions of dollars of investors’ money, and foisting junk products and junk IPOs on the unsuspecting masses.)”
Lessard and Baldwin have coined the term “bootstrappers” for those who run small, profitable technology companies on a shoestring budget, depending largely on themselves for both capital and creativity. “Bootstrappers are the crusty mom-and-pop storeowners at war with the local mall.”
“With all the stupid money long gone from the technology business,” they write, the watchwords are “think cheap, think small and think really, really hard.” For boostrappers, the company’s perks “consist of heat, electricity and a non-broken chair.”
Bootstrappers “pit wide-eyed, cash-starved vendors against one another to see who will slash prices (and their throats) the most to satisfy your pathological obsession with getting the ‘best possible deal.’ ” The closest a bootstrapper ever comes to obtaining venture capital is “borrowing $20 from an employee to buy sandpaper-grade toilet tissue for the company bathroom.”
In all seriousness, Lessard and Baldwin write, “Even with their bottom-line, cost-cutting approach to business, many bootstrappers are finding it very difficult to keep their tiny companies afloat.”
When I asked Lessard what the key lesson of the dot-com bubble was, he said it was to maintain perspective. “Learn how the Internet can enhance your core business. It’s not a solution to all business problems, not a magic bullet. Take small steps. Grow your business organically.”
Speaking to those who survived the bust and are still hanging in there, Lessard said, “Don’t fall victim to irrational gloom. We went from irrational exuberance to the complete opposite. If you went to a cocktail party in 1999 and said you worked for an Internet company, people would look at you as if you had $2 million in your pocket. Now they look at you with pity.”
“We seem to forget that Net workers changed the way people live, work and play in a very short period of time. You can research any possible subject, read different news outlets, shop efficiently, and meet business partners and friends from all over the world.”
Lessard worked previously in marketing and project management for Time-Warner. His next project is a book on “how people are using the Internet to combat the consolidation of the media and give themselves a voice.” He currently has no plans to create a companion Web site.
Reid Goldsborough is a syndicated columnist and author of the book Straight Talk About the Information Superhighway. He can be reached at firstname.lastname@example.org or
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