New Economy Profiles: Where Are They Now?

December 11, 2001
By Hal Lancaster

It's the holiday season, a time for visiting old friends, so I thought I'd dial up some of the die-hard New Economy folks I've written about in recent years. How are they doing? Has Santa been good to them in this most difficult of years? And what have they learned through these turbulent times?

First stop, Chicago and Ken Gaebler, who has seen the highs and lows of an Internet career. When I first chatted with Mr. Gaebler in 1999, he was basking in the glory of the successful sale of Vream Inc., a maker of data-visualization software. He had been the company's chief operating officer, the nose-to-the grindstone operations guy to his partner's flashy, charismatic outside man. He was struggling with a career dilemma: Should he launch his own start-up, or was he strictly an operations guy, destined to help others build their empires?

It's a critical career question for anyone. The glory of leading a company can be tempting; but not everyone is suited to be Jack Welch.

Mr. Gaebler eventually decided to join his former Vream partner in another venture, again as COO. BeautyJungle was a high-profile Internet cosmetics retailer, and Mr. Gaebler oversaw many of its key departments -- from marketing to human resources, a management education in itself.

But like many dot-coms, BeautyJungle collapsed. Mr. Gaebler says the business was a hit with customers, but it made the mistake of building an infrastructure for a level of revenue it never achieved. And it ran out of cash at a bad time, when nobody was interested in pouring more money into a dot-com. “Given more time, we could have built something interesting, but we never had that luxury,“ he says, ruefully.

Again, Mr. Gaebler had to do some career soul-searching. Should he put in some time with a mainstream corporation to build his resume? Should he dive back in with another risky start-up venture?

Mr. Gaebler feared he had once again buried himself too deeply behind the scenes. He felt he could have used the position to gain more visibility for his accomplishments and to build a bigger network of contacts, both of which would make his career transition easier. He had counted on the company being so successful that he wouldn't have to worry about what he would do next. “It's so time-consuming,“ he says, “you just don't have much time for networking.“

Plus, the market for someone with his skills, once booming, was starting to diminish. “So many people left consulting companies to be dot-com execs that the credentials you thought would be really differentiating turned out to be not-so-differentiating,“ he says.

And the mainstream companies weren't so quick to build up staffs of Internet gurus as the economy soured, budgets dwindled and the competitive threat from dot-coms vanished. Mr. Gaebler also sensed some residual bitterness among them. “It was like, 'you guys thought you were so great and now you're trying to come back,' “ he says. “It was a little harder to make that jump back than I thought it would be.“

In the end, he decided to stay in the start-up world, where, as a manager, he felt he could have more of an impact. But his focus has definitely shifted. Instead of a splashy start-up, Mr. Gaebler has started an incubator of sorts, Gaebler Ventures. So far, it has launched three decidedly unglamorous companies -- a public-relations firm that targets high-tech clients, a firm that helps venture capitalists conduct due-diligence research and an executive-search firm. “I could probably find a tech venture, but it doesn't seem the right time,“ he says.

Still, the itch remains. It isn't a coincidence that all three businesses support the kind he's used to managing. “They all get me out there meeting people,“ he says. “The hope is that I'll grow my network to find the next Vream or BeautyJungle.“

His lesson? Learning where he fits into the New Economy. “I'm a good business person, but I'm not inventing the next Instant Messenger,“ he says. “But if I stumbled across people who were doing that, I would jump in with all my energy.“

* * *

Raymond K. Lemire, who was mentioned in Career Corner's debut column in September 2000, has learned the importance of flexibility in the New Economy.

Mr. Lemire joined the Internet rush six years ago with a small purveyor of everything pasta, The Flying Noodle Pasta Club. And despite the ferocious winds that have swirled about him, his little company has remained standing -- and profitable.

It hasn't been easy, with the economy weakening and customers wondering whether the Pasta Club would join all those others in the dot-com graveyard. But Mr. Lemire has survived by sticking to solid, conservative business practices. He never went after the big venture-capital bucks, and now, he has no backers pushing him to grow unwisely. He has kept his costs in line, choosing to cut back on risky advertising as the economy weakened, and increased affiliate marketing, where the company doesn't pay out commissions until sales are made. “We didn't spend crazy dollars on online promotional efforts to acquire customers,“ he says. “The people who stayed in business, like ourselves, stuck to the fundamentals.“

But he readily admits that he couldn't have done it without the support -- emotional and financial -- of his wife, Lisa, a food-industry executive. “She's been a major bread-winner,“ he says.

So, what would the Lemires do when Mrs. Lemire got an offer to become director of strategic planning for Pepsico's Tropicana Products unit earlier this year, which would require a move from Duxbury, Mass., to Sarasota, Fla.?

They ran through most of the career possibilities. “Do we move the company, close it, sell it?“ he says. The only thing they didn't consider was turning down the job. “Her job offer was really good and that had to weigh very heavily into it,“ he says.

Three months ago, they moved. Since then, he has become a virtual CEO, visiting his Massachusetts offices only once. He has been relegated to managing by activity reports and communications technology -- cell phones, e-mail, instant messaging and faxes. “It's a management challenge,“ he concedes.

Still, the move reinforced one of the company's prime management philosophies. “One of the things we've always done to attract people is to have flexibility,“ he says. “We hired people and said, what hours do you want to work, and worked around that.“

In the end, the move may make Mr. Lemire a better manager. He is learning the importance of hiring well, putting in place a staff of self-guided self-starters. And he is being forced to trust in them, to delegate more. “When you go through tough times,“ he concludes, “you get new ideas.“

* * *

When I talked to Joshua McCarter last year, he was extolling the virtues of hanging on through the storm. While many were jumping ship at struggling Internet companies, he had decided to hang in as vice president of international sales at Autobytel, an Irvine, Calif., company that serves as an online go-between for car buyers and dealers.

The company was having problems, like most Internet-based companies. The competitive field was too crowded, car buyers didn't rush to buy cars online as quickly as many had anticipated. But Mr. McCarter felt the company had a sound business model and enough money in the bank to ride out the storm, and he believed his career would benefit from the experience.

Since then, the company acquired an online rival, AutoWeb. That company's management came with it (AutoWeb's CEO recently took over as Autobytel CEO). In the process, the company's emphasis shifted. The attempt Mr. McCarter headed to build a vast network of international partnerships was curtailed as the company focused instead on building its domestic business.

In June, he decided it was time to leave. He had been there five years, in a variety of positions. “I had a great growth experience, helping to raise $100 million building joint ventures,“ he says. “It was really just a feeling that I had had every position I wanted to have. I wanted to start over and see what I could build.“

Autobytel's founder, Pete Ellis, beckoned. He had started a small investment firm, Jubilee Investments, and Mr. McCarter joined as a partner.

The company invests in firms that want to use technology to update inefficient and outmoded distribution systems, much as Autobytel aimed to do to the car industry. Mr. McCarter has been named interim vice president of business development for the firm's biggest current investment, Spafinder, a niche travel agency focused on the spa-resort industry. He is currently building a Web presence for a company whose previous Internet exposure was a Web site that directed customers to a toll-free number.

Mr. McCarter sees this as the first step to a new career in venture capital. If the small fund is successful, he can grow with it. If not, he feels he is gaining both the investment and operational skills that are prized by venture capitalists he has spoken to. “What I'm doing now is a good platform for developing additional skills that I can bring to bear in that kind of organization,“ he says.

His is a good lesson to learn in this New Economy. Nothing is forever. What counts is building the contacts and skills that will prepare you for whatever happens next.

© 2002 by Dow Jones & Company, Inc.