Tales From the Dotcom Darkside Harvard's Class of 2000 had the world in its hands.for a while. But what was it like to <I>work</I> at a dotcom--not start one--during the Net's heyday? HBS grads dish the dirt.

Coveted by Fortune 500 behemoths and courted literally fromtheir first steps on campus, the graduates of the Harvard BusinessSchool have historically enjoyed the dizzying spoils that come fromearning a spot in the nation's most prestigious MBA program.Matriculation at HBS has historically been the gateway tohigh-profile positions in investment banking and consulting.

It's a de facto farm system for producing talent that topfirms court the way a professional sports team trades up in thedraft order to grab an all-American. Contact between those in theprogram and potential employers and recruiters is closelyregulated, and the Fortune 500 have traditionally enjoyed theadvantage of name recognition and deep pockets in landing HBSgraduates upon graduation.

The Internet revolution changed all that. Buoyed by the dizzyingprocession of fast wealth and a subversion of the time-provenparadigms of business, the HBS Class of 2000 stood for more thanjust the numerical symbolism of a new era. Their post-graduationstrategy was a wildly different one than that of theirpredecessors. People were getting rich, small dotcoms were enjoyingunprecedented stock valuations, and the buzz was hitting the HBSgrapevine with all the aplomb of a new kid in town taking the placeby storm, with the Old Economy and its prospects suddenly relegatedto the agate type.

Their stories have both a common thread and unique elementsamong them, and the lessons learned will endure, even if the dotcomrevolution didn't.

RememberWebvan?
As a former Army captain with a background in production, DanKrehnbrink, 31, hardly fits the stereotype of the downsized dotcomdreamer. He entered HBS with a desire to get exposure to differentareas of business and augment his business skills--not an unusualcriterion, nor a foolhardy one. As his graduation date approachedin June 2000, Krehnbrink couldn't help but notice the deluge ofnew ideas and concepts among his classmates.

"Everyone was walking around with four or five businessplans in their pocket," Krehnbrink says. "It was obviousthere was a lot more excitement about what was going on and thingsto be learned."

Still cautious as graduation loomed, and having reviewednumerous dotcom opportunities, Krehnbrink took a program managerposition with Webvan's operations wing. His decision was basedon the merits of a business plan that seemed relatively robustcompared to most in the industry.

One of the more relevant ideas of the dotcom boon, Webvanoperated a catch-all home delivery service for groceries and was afitting metaphor for the fast-paced climate that spawned itsinception: Those who didn't have time to shop could simply havesomeone else do it for them, obviating the nettlesome problem ofthe 8 p.m. run to the store after a 12-hour workday.

"Our long-term plan was to [start] out with groceries, andthen branch into electronics, pet foods, etc.," saysKrehnbrink. "I saw a lot of flaky business models, then lookedat Webvan and said, 'Here's a company that has a lot ofassets.' In retrospect, the problem was too manyassets."

The company's notable linchpins were its enormousdistribution centers, located from Chicago to Los Angeles. Once thehome delivery business caught on, these high-tech distributionspheres would form the backbone of a nationwide network to help thecompany sustain the projected growth.

"It was an incredibly big plan, and a product of the marketat the time was to get big fast. There were hundreds of thousandsof square feet in these distribution centers," Krehnbrinkrecalls. "Somebody had done the analysis that we could breakeven by selling so much, but the costs were much higher thananticipated."

Fittingly, the day Krehnbrink arrived in California to startworking for the company, Webvan acquired HomeGrocer, a chiefcompetitor. Already feeling the bite of a rapid expansionpunctuated by soaring infrastructure costs, his position in theoperations department was further complicated by the directive frommanagement to identify and implement HomeGrocer's bestpractices in an effort to streamline costs: "Their facilitieswere much more streamlined, and their technology platform was notas complicated. In retrospect, I wish we could've started in asimpler format like HomeGrocer and added complexity as we addedprofitability."

The company, feeling the financial crunch of not meeting itsgoal to raise $1 billion to reach its operational goals, laid offKrehnbrink, along with 2,000 other employees, in July 2001. YetKrehnbrink speaks positively about his experience and evidenced noill will about his 13-month whirlwind ride.

"Webvan recruited a lot of people with a consultingbackground, and I have a tremendous respect for the talent that wasthere. Perhaps we hired people who were too talented," hesays. Currently in bankruptcy proceedings with numerous creditors,Webvan is still operating with a skeleton staff to sift through thefallout of the post-boom aftermath.

At this article's writing, Krehnbrink was waiting for anoffer on a program manager position from an established firm."I don't want to name names," he adds, onlyhalf-kidding. "But I don't have dreams of working for adotcom. I've been talking to more traditional companiesthat've been around for 10 or more years. I still feel there istremendous industry in the concept, though." His future goalsare geared toward getting more experience in technology platformdevelopment.

Another One Bites the Dust

Compared to the relative sensibility of Webvan's model,Kibu.com was the classic case of a highfalutin dotcom thatdisintegrated as the industry entered its revaluation phase inmid-2000. Hired as director of technology, Arcadia Kim liked theconcept of marketing exclusively to teenaged girls. AmongKibu.com's oeuvre of marketing strategies were chat rooms, Website personalities that gave advice on everything from school tomakeup, and an accompanying retail and entertainment venturedesigned to capture and convert teenage girls into loyal users.

"My job was probably the most interesting one I everhad," Kim says. "Once a month I would get dressed up anddo a photo shoot and write a column. There was a lot of high energyand shifting goals. Almost immediately upon being hired, I startedquestioning the business model. My responsibilities were toimplement core technologies on the site to connect to teens, withcontent, community and commerce attached to it."

Kim's sense of alarm, which started "almostimmediately" upon being hired after graduation, was compoundedby the fact that virtually everything at Kibu.com flew in the faceof what she'd learned at HBS and in the business world:"When you're on the outside looking in, all you see is thehype. The whole Internet bubble was about dreamers being about todream, and when you want to believe something, you will takeeverything in your heart to believe it." Kim was laid off inSeptember 2000 along with most of Kibu's staff, and the companyreturned nearly half of the $22 million in venture capital thefollowing month, a rare act of probity in an industry where OtherPeople's Money was burned through as fecklessly as it wasventured.

Now happily ensconced in Silicon Valley, of all places, Kim, 29,landed her dream job 18 months ago as a director of developmentwith Electronic Arts. A longtime video game junkie, she's doingwhat she's always wanted to do, and she's working on aLord of The Rings video game for Playstation 2. "Mywhole dotcom experience has turned into the cornerstone of myexperience. Managing risks and learning how organizations work isjust sort of ingrained in me now," she says. "I talkedabout it a lot while I was interviewing with EA. I took anentry-level position with them on the production side, where therearen't too many MBAs. Ultimately I learned what was reallyimportant was setting expectations about what can happen inone's career."

The Road Ahead

While Kim was lucky enough to bounce from a dotcom misstep to anideal job, other HBS grads are still milling in the wake of thelayoffs, trying to retool their approach and find the shoe thatfits. Maya Dani, 29, started with Gorefer.com in August 2000, andimmediately was waist-deep in the ensuing organizational chaos thatultimately led to her leaving the company in December 2000.

"Gorefer.com was building technology for people to use theInternet as a platform for sales leads. They wanted to target everymarket, and for various reasons we began on the home improvementside," Dani says. "We would pay people $2 for leads, andthen a partner would pay us twice that."

Like all HBS alumni, Dani's business acumen didn't jibewith the frenetic positioning efforts and constantly changing focusof the company. Four years' experience in investment bankingdidn't help her achieve the suspension of disbelief that seemedso readily available to coworkers.

With a '95 HBS grad also working at Gorefer.com, herreservations were only compounded by a fellow alum trying to makesense of the situation. The two were in constant conversation withthe CEO--they tried to sway him to adopt a more centered, prudentapproach, but it didn't take. The repercussions of the 2Kslowdown were immediate, and 20 percent of the staff was laid offtwo weeks after her arrival. "I was hired as director ofbusiness development, then I sort of became director of marketing.I was whatever I wanted to be," Dani adds, a whimsicalrecollection underscored with the clarity of hindsight. "TheCEO was spending more time in-house when he should have beenpounding the pavement."

Gorefer.com closed for good in February 2001, after havingraised $12 million in venture capital--a relatively small figure bythe industry standards at the time. Meanwhile, Dani took a job inbanking, left that, and then worked as a consultant for fivemonths. She's still looking for that proper mix of structureand entrepreneurial spirit.

"I ended up quitting the banking job after six months. Idecided if I was miserable, I should just leave," she says."The decision to leave Gorefer was the beginning of severalcascading events in my life. I really felt like many of myclassmates at HBS, and I felt we could think up the next great ideaas opposed to thinking out a long-term plan.

"I think my expectations were really high coming out of Bschool. I talk to headhunters, but quite honestly I am not putting100 percent into my job hunt. I am really nervous about picking theright thing. Just this last week I've really startedlooking."

"What was interesting," says Kim, reflecting on thedotcom effect on the Class of 2000, "was that HBS was areflection of what was going on in the market at thattime."

With hard roads behind them and lessons learned, the Class of2000 is taking the road back, one that is uniquely theirs.

Jason Probst is a freelance writer in Southern California. Hehas written for ESPN, maxfighting.com and Gridlockmag.com, amongother publications. His next project is comprising a dotcombusiness plan written entirely in Haiku.