Death of a Dot-Com

by Shelley Powers

In February I returned to Boston from a vacation in Tucson. I ended up taking three different flights and was very tired when I got home. I walked through the door of my apartment and was immediately met with the news: my employer,, had closed its doors.

I dropped my suitcase and stumbled back, literally, until I fell into a chair. I couldn't believe it was all over. After months of struggle, it seemed as if we were finally turning the company around--we were going to be one of the dot-coms that made it. I couldn't understand what had gone wrong.

Bright Beginnings

Skyfish started out as a partnership between a group of young, bright, and enthusiastic Australians and individuals from an established aerospace data and software company. Skyfish focused on building Web-enabled applications for the aerospace industry.

I was brought in as technology architect and senior developer some months after the company received initial funding, and I was soon caught up in the hope and enthusiasm that marked in the early days. At one point I was working such long hours that the company rented a condo across the street from the office because they didn't want me walking the streets of Boston at 3 in the morning, going to and from work.

One of the brightest moments for me at Skyfish was when the company's chief technology officer, Michael, and I sat across from each other at a neighborhood coffee shop and jointly made the decision to turn our applications over to production. Michael pulled out his cell phone and called Mauro, our systems administrator, and told him to make the switch that took our applications, then in testing, to the production box. One simple call and we were online and in business.

In the time leading up to this moment, we had worked as a team seven days a week, sixteen-plus hours a day, just to get the applications to this point. We had weathered the labor shortage in Boston during the last golden days of Internet business in the year 2000. We also managed to successfully add an unexpected application only four weeks before production, bringing the total to four applications scheduled for release on November 6, 2000.

But that moment, when Michael and I decided to turn our applications over to production, was the last time that either he or I had any control over the destiny of Three months later, the company, like so many other dot-coms, was dead.

What Happened?

Your first reaction might be, how could anyone possibly have expected so many of the dot-coms to succeed? Many had business plans that didn't show profit returns to investors for five years--if then. In fact, the average business plan seemed to run somewhere along the lines of:

  • Create dot-com business plan
  • Get first round of funding
  • Put something on the Web
  • Get second round of funding
  • Sell to bigger company for profit
  • Become investor in other dot-coms
  • Become rich and famous (hopefully by the age of 30)

I exaggerate, of course, but not by much.

Yet there were a lot of dot-coms with terrific ideas, realistic business plans, great products, and brilliant leaders. They failed just as readily as the dot-coms that were based on nothing more than a few Web pages and a meager plan. We all knew the risks, but why did a company that would have thrived six months or a year ago suddenly fail?

We lost faith. Individually and in groups, we stopped believing in the dot-com phenomena, and that left many dot-coms, small like ours, and larger, twisting in the wind, looking for the resources to contine. Hard to find when the dot-com hoopla became the dot-com bust.

The Emperor Has No Clothes

The dot-com era was fueled by the biggest hype machine of all time, and it backfired. We made a king out of Jeff Bezos at Amazon, and then someone in the crowd asked, "By the way, Jeff, when do you plan on making a profit?" (See E-Biz Cliffhanger: Is Amazon's Jeff Bezos Running Out of Time?.)

We literally ran each other over trying to buy stock in Yahoo, until someone in the crowd asked, "But how are you going to make a profit?" (See Yahoo Looks Toward Future and Yahoo CEO: Slowdown is Cyclical.)

The cry of "Cisco" sounded faintly across the land in reverant utterances, until someone in the crowd asked, "How did you do in your last quarter?" (See related article at Cisco's Chamber(s) of Horrors.)

What led up to the dot-com crash? Pretty much the same thing that led up to the dot-com explosion: the press.

Consider this: The same publication that put Jeff Bezos on its cover as Person of the Year (Time), now recounts, in loving and ghoulish detail, every dot-com failure, every technology business loss, every dropped stock market point (see Dot-Com Disaster Lectures). It reminds me of workers extolling a beloved manager who's about to retire, and then bashing him the moment he's out the door.

The press seems to have forgotten that in its mad, sad, bad rush to be a part of the dot-com phenomenon, it hyped the market until even the most brilliant economist couldn't pull success out of this media-made magic hat.

The Ride

Don't get me wrong, I wouldn't have missed the ride. Strip away the money and the stock options and even the technology, and what we had was a time of intense optimism and almost unbounded energy and enthusiasm. This was heady stuff, especially at the tail end of a recession. (Yes, believe it or not, there was a recession during the early '90s.) Anything was possible. Anything! Old ways of working were discarded, new ideas were tried, and failure really wasn't an option.

I had fun working at I didn't make money, and I didn't get a lot of sleep, but I had an enormous amount of fun. Few of us have the chance to join a company as it begins, to help it rise to greatness--or what we assumed would be greatness.

Unfortunately, there was a price to pay for good times. The last few months at Skyfish were a constant struggle to keep the company afloat and to keep morale up. Days were filled with worries about finding jobs if the company failed. Almost weekly we went in front of one investor or another, trying to show our original enthusiasm; trying not to show the quiet desperation we felt. We demonstrated our products, we found and signed-on customers, we even partnered with a major travel-industry player. In the end, all our efforts were unsuccessful: our major funder pulled the plug, and Skyfish closed.


So why did fail? Why did any of the dot-coms fail? We stopped believing in the phenomenon, and once you stop believing, there's no going back.

What made the end of Skyfish so difficult for me was I couldn't stop thinking about when everything was so hot, when everything clicked, the many perfect moments. I also regret that we never reached our potential and that we never had the chance to complete what we started.

No one walked away a winner or a loser the day the closed its doors. In the end, we just walked away.