Damn Dotcoms!

Problems For Traditional Companies

Ouch. But Eisenbath has a point.

Sure, looking for big problems in a roaring economy where there are massive amounts of money being made is a cynical pastime. But the dotcoms do present difficulties for traditional companies-difficulties that transcend hogging all the venture-capital money and artificially inflating stock-market prices.

Consider the problem of hiring-and keeping-good help. The Internet world has absconded with some top-notch corporate talent recently. A check of some of the Internet job-hoppers highlights the crème de le crème of the Fortune 500.

It's a wholesale shift in career moves, much to the detriment of traditional companies-and other venerable institutions. Of Harvard Business School's class of 1999, only 39 percent went to investment banks or consulting firms, compared with over half in 1994. And, critics say, the dotcoms are luring potential business-school talent away before they get a chance to absorb some of the old-fashioned professorial wisdom found inside the ivy-covered walls of post-graduate business schools.

"I was intrigued by what the company was doing and by slugging it out in the e-commerce market" explains Meredith Brown, who became chief administrative officer at Bodylogix.com, an online women's health products startup, after bailing out of a similarly titled position at Merrill Lynch. "As an executive, you want the money, you want the challenge, and you want the opportunity to get involved with a company that has long-term growth potential."

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This article was originally published in the August 2000 print edition of Entrepreneur with the headline: Damn Dotcoms!.

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