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Dot-com fever

Players, consultants and recruiters look back on dot-com mania and ruminate on its repercussions.

By KRIS HUNDLEY

© St. Petersburg Times, published February 12, 2001


The player:

Tony Ibarguen, former president, Tech Data Corp. of Clearwater. Now managing partner at Internet Capital Group, a Wayne, Pa., business-to-business incubator whose stock has dropped 96 percent in the past year:

"Great businesses will continue to be built on sound fundamentals and great management. Don't underestimate the impact the Internet is going to have on how business is conducted in the future.

"It might take longer than some of the original forecasts, but its impact will be felt. There just may have been some irrational exuberance about the speed with which new business models would be adapted and the valuations they'd bring.

"It's likely to be a slow implementation process, but the endgame will be incredibly profitable. It just becomes a question of how long it takes and who has the capital to see it through."

The dot-com entrepreneur:

Mike Davis, founder and president of Tampa fishing Web site, Eangler.com:

"I feel like I'm in a meteor storm. Every day you pick up the paper and read about another dot-com going under.

"But when you look at the reasons they failed, I think it boils down to the topic and the passion of the customer interested in that topic. And I think we're in a pretty strong niche, well-focused and on the road to profitability.

"We got $9.1-million in venture capital in June and we've got a lot of capital remaining from that. I'm glad I'm not looking for money today because if you talk to the venture community, business-to-consumer is dead. If there's any consumer appeal behind your company, the venture community doesn't want to hear about it."

The recruiter:

Warren Rodgers, president and owner of Tampa technology recruiting company, Computer Specialists Inc. Has helped place veterans of dot-com failures:

"There are two problems that dot-com people have when they go looking for work at major companies. The dot-com experience raises a question about where they're trying to go from a career standpoint and if they're really geared to a corporate culture. How do employers know that if they hire you, in a year-and-a-half you won't leave all over again?

"Also, some people who've been in the dot-com world for two years or so have lost the leading edge technical skills they would have had if they'd stayed in a more sophisticated IT (information technology) environment. If you were an employer looking at someone coming out of a dot-com and another from a major company, who are you going to take a closer look at?"

The consultant:

Marty Donsky, manager of PricewaterhouseCoopers Technology Practice in Tampa:

"We've been fortunate; only one of 30 early-stage companies we have as audit clients has closed its doors. It was an Orlando ASP that wanted to provide accounting services to small and midsize businesses. The company had some strong people, including an ex-Microsoft e-commerce expert, but funding sources just dried up.

"Start-ups that understood that the Web is an information and communication tool first and foremost will continue to succeed. By and large, start-ups that saw the Web as an independent platform for commerce won't succeed.

"I think we'll have thousands of Web sites that barely survive. . . . They'll make a little money here and there and might have some growth, but these sites will never be the investment home runs envisioned by their founders and backers."

The networker:

Lawyer Marty Traber, chairman of the corporate finance and securities group, Foley and Lardner in Tampa:

"Now we can't get an investor to look at anything unless the entrepreneur is experienced and has got some skin in the game. Investors want to see an idea that's gone through proof of concept. They want entrepreneurs who can say, 'I've solved Problem A.' Or better yet, 'Somebody has paid me to solve Problem A.' If they can prove they can sell it, then I can do something with it.

"During the boom time, 24 months was a long time. But when the market stopped harvesting, investors had to become more realistic and get a longer-term horizon, like five years.

"The metrics have changed. Investors want to have a lower risk profile, so they'll be more selective on investments. They also want to take a bigger chunk of a company for less investment.

"The big question today is: When are you going to go black?"

Recent coverage

Deflated dreams (February 11, 2001)

From bandwagon to near bust (February 11, 2001)

Different century, different bubble (February 11, 2001)

A tale of two venture capitalists (February 11, 2001)

Day trading temptations tempered (February 11, 2001)

Here today, dot-gone tomorrow (February 11, 2001)

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