What Was, What Is, What Will Be—Part One

I was cleaning out my shed recently, going through piles of things that have been pushed from one corner to the other for years, until I finally got tired of tripping over them. I wasn't conscious of how long some of that stuff had been piling up until I started emptying out a box full of odds and ends and found a copy of the Boston Globe from August 22, 2001, before I even lived in my current house. I imagine this box came from some obscure corner of the garage in the old house and got tossed into the moving van at the last minute, then was tossed into some equally obscure corner of the new house and just sort of shifted around over the years without anyone ever looking to see what's in it. I'm bad about that sort of thing. I'm not a hoarder, but I am kind of an accumulator.

That paper looked like it had never even been read, curiously enough. The edges were a bit ragged, like they had been gradually harvested by mice for nesting material, but all of the sections were still there, just as they had been delivered over a decade ago.

I enjoy looking at old newspapers, seeing what the important stories of the day were years ago, thinking about what was happening in my own life at the time. This one from late August 2001 was an interesting find for a lot of reasons. It represented a time of major changes for me personally, and imminent changes for the country as a whole. Glancing at the date on that front page, I found myself immediately lost in contemplation of the events that had transpired in the year leading up to the date of that paper.

In August of 2000, I returned to the US after more than a decade living the expatriate life in Germany, along with My Favorite Wife and two young kids. It was the height of the dot-com boom and I was taking a job with an Internet consulting company in Boston. I'll call it XYZ Corp. XYZ provided soup-to-nuts Internet strategy and technology consulting. They had a whole list of top-tier Fortune 500 clients as well as a bunch of fairly well-known dot-coms, and a huge wad of venture capital funding, and it looked like a pretty reasonable proposition at the time I signed on. They offered me a decent salary, plus a relocation allowance that more than covered the cost of moving my family and all of our accumulated stuff across the Atlantic.

From the first day I was at XYZ though, I began having second thoughts. I had interesting projects with good clients. I had colleagues whom I found to be extremely creative and competent in their respective areas, whether it was visual design, technology implementation, business strategy development or whatever. But at the same time, I couldn't help but notice that there didn't seem to be any grown-ups in charge of all these smart and capable people.

Not to blow my own horn too loudly, but at the time I joined XYZ I had undergraduate and graduate business degrees and twelve years of pretty solid work experience under my belt, a third of it in a Big Eight consultancy (back in ancient times when there was such a thing…) and the rest in an international bank. I had run a department of 12–15 people and managed million-dollar budgets and project teams that were distributed across the globe. I had connections with peers in major corporations throughout the country and the world. I had to develop budgets and manage to them, hire and motivate staff and interact with people at fairly high levels of the company. I don't think I was even conscious of how much business experience I had accumulated until I worked at XYZ and observed how the company was being run.

To me, it looked our management was engaged in some kind of race to the bottom, in which the objective was to see who could shovel the most cash out the window before it all ran out. Crazy amounts of money were spent on stocking the kitchens on every floor of every building, from which employees could help themselves to unlimited quantities of cereal, soft drinks, cookies and other treats. There were pool tables and foosball tables and other toys. People who had been with the company for half a year had piles of company-branded clothing and trinkets. Food was ordered in for every lunch meeting, of which there were plenty. The building I worked in, which had been remodeled from industrial space at a cost of millions of dollars, was home to hundreds of office chairs, none of which had cost less than around $800. People flew at the drop of a hat all over the country for pointless meetings, staying in the finest hotels and eating in classy restaurants. Nobody seemed to notice that projects were staffed with way more people than could have possibly been profitable. Nobody seemed to know or care what a budget was. Clearly this was going to end in tears.

That's not to say that XYZ was necessarily run substantially differently than a lot of the "hot" companies of the time. I never really accepted the concept that seemed to be prevalent at some of the major dot-coms, namely, that giving things away is somehow a promising business model. I kept hearing phrases like, "It's about the eyeballs, man!", meaning that people looking at your web page would somehow translate into a large and constant stream of cash into your pocket, through some magic that nobody ever really satisfactorily explained to me. The epitome of this kind of thinking for me was a company called Kozmo.com that operated in some larger US cities, from which you could order things like CDs or snacks and they would deliver it to you for free; I didn't see how a service that would cart a pack of gum halfway across New York City for free could possibly be making money, unless maybe they were charging you $10 for that pack of gum that was making its way to your door without any delivery charge. Hearing about this crazy scheme left me scratching my head and thinking that maybe the Internet joyride was approaching some kind of climax.

Of course, there was plenty of funny business going on throughout the economy back then; it wasn't confined to dot-com start-ups. I remember one meeting we had with representatives of Enron who were trying to sell some new technology service to one of our clients. I subsequently advised our client that what the Enron guys were peddling looked to me like some very expensive vaporware that could not possibly deliver the level of service they claimed it would, given the underlying technical infrastructure they described to me. Little did I know at the time that this was not some anomaly, but rather the way the whole company worked. It was not long after that that Enron spectacularly imploded.

It was fun while it lasted!

So end in tears it did. The first tears came in the spring of 2001, when a number of my coworkers came in one day to be met by security guards who stood over them while they packed up their personal stuff in a waiting cardboard box and then escorted them out the door, never to return. Following the exit of our now unwanted colleagues there was a company-wide meeting in which one of the company founders announced to the remainder of the now somewhat disoriented staff that we had to do an unavoidable "reduction in force" (RIF) in order to get leaner and be competitive, but the rest of us had nothing to worry about; we had been suffering a bit from the loss of clientele from the dot-com sector, but we still had lots of big projects with major clients from more traditional industries and this would shield us from the recent "downturn in the market", and so forth and so on blah blah blah. Later that day the same guy came to chat with the project team I was working with and asked a few of us if we wanted to join him in XYZ's VIP box in what was then the Fleet Center to watch the Bruins play hockey. I politely declined, thinking there is clearly a problem of priorities here and I don't really care to be part of that. I was reminded of the old saying that a fish stinks from the head down.

I think there were six or seven RIFs (or mass firings, as I preferred to call them) that followed in the ensuing months. The second one was somewhat less traumatic than the first, though not by much. By the fourth or fifth one a combination of resignation and gallows humor was the order of the day, and nobody seemed particularly surprised to come to work one day to learn that his number was finally up. People just sent a last farewell email with their private contact info, gathered up a few things and left. By then the company had long since dispensed with the whole security guard thing.

The first people to go were mostly the younger ones with the prominently displayed, ridiculously elaborate tattoos and the geek-as-fashion-icon horn-rimmed glasses. One could feel the median age and experience level of the company drifting steadily upward as the hipness quotient declined somewhat. But even if you were one of the older and more experienced consultants, if your latest project came to an end and you didn't have a new one to start on, i.e., you were "on the bench" in consultant-speak, the chance that you would be out the door fairly soon was high.

I would like to think that it was due to the indispensable quality of my own skills and experience, although I'm sure sheer dumb luck played a major role as well, but for whatever reason I somehow managed to hang on until the bitter end. That came when XYZ finally threw in the towel and declared bankruptcy in August of 2011. Even then I was actively engaged on a project for one of our remaining clients. It was entirely unclear what was going to happen next. I probably never got around to reading that August 22, 2001 edition of the Globe because I just had other things on my mind at the time, one of them being the fact that as my one year anniversary at XYZ approached, it was clear that there was not going to be a two-year anniversary.

But just like in the movies, when it looked like the situation had reached its most desperate, help arrived to save us. In this case the movie was Seven Samurai. Or more like Seven Sararimen, I guess.

We have come to save your company.

Let me explain. At some point senior XYZ management must have realized that if they were going to keep the party going, they were going to have to find some new dupes investors. Somehow they managed to get a major Japanese industrial company (I'll call them J Corp.) to take a minority stake in XYZ to the tune of an eight-figure investment. As XYZ went belly-up, J Corp. bought out the remaining assets of XYZ and founded a new, wholly owned subsidiary which I shall call Phoenix (because it rose from the ashes of XYZ… get it? Clever, huh?). So along with a little more than a hundred of what had been 800 employees in XYZ's Boston office at the time I joined, now I was a happy, or at least relieved, employee of Phoenix.

To be continued (whenever I get around to it)…