Dot-com blues 

Exiles from Atlanta's new economy rethink the dot-com dream

The call came just after noon on the last Thursday in May.

After four years of covering the "New Economy," digitalsouth magazine was a victim of it. "I'm shutting down the magazine," the in-house lawyer for our bankrupt parent company, LocalBusiness.com Inc., informed us.

In fact, little did the five of us know that out in the hallway lurked two computer technicians, awaiting their cue from that same lawyer. No sooner did we hang up than they moved in, accompanied by an Atlanta cop, and started confiscating chairs, desks, computers, power strips and staplers.

It felt like a drug bust. But we were no criminals. We'd busted ass for two and three years putting out a damned good technology business magazine, with limited resources. We were proud of it and of each other. It was the only job I ever had where I liked and respected all of my immediate co-workers and felt completely comfortable with their work.

And this is how it would end. There would be no severance pay. Our health insurance would last another two days. And because a single company laptop was missing, corporate was threatening to withhold our last paycheck, never mind that we'd already earned it.

Thanks for the hard work.

My story is hardly unique. As the Internet balloon has deflated, thousands of workers have been sucked into the vacuum of unemployment and uncertainty. Today, they gaze wistfully at back issues of Fast Company and share war stories at pink-slip parties. Some are disillusioned. Some are angry. Some are rolling with the punches, while others have abandoned the field altogether.

One thing is constant, though: While economists insist this is not a recession, it sure feels that way to those of us scanning help-wanted ads. Twenty years ago, it was factory workers who took it on the chin; today, it's white-collar's turn. Thought you weren't expendable? Think again.

It wasn't supposed to be this way. The Internet revolution was supposed to put people first. You could bring your dog to work, listen to Radiohead and get rich in the process. It was fantasy, fueled by investors and entrepreneurs drunk with optimism and a press that glorified it and egged them all on. And in few places was the party more raucous than in Atlanta.

In 2000, according to the accounting firm PricewaterhouseCoopers, investors poured $2 billion of venture capital into privately held Georgia companies -- virtually all of them in metro Atlanta. That's nearly triple the amount for 1999 and seven times as much as in 1998. Almost all of this money went to technology companies in 2000. The single category that claimed the biggest share included dot-coms, which took in 31 percent of the $2 billion, or about $600 million.

But as it turned out, the New Economy wasn't exempt from the Oldest Truth -- the relentless demand for profit.

In the last year, tech firms big and small have been shedding people like a magnolia drops leaves. In the past seven months alone, tech companies have notified the Georgia Department of Labor of plans to slash 4,058 jobs in metro Atlanta, according to Federal Worker Adjustment and Retraining Notification (WARN) Act filings with the department. Companies must file WARN notices if they plan to cut 50 or more jobs. Thus, these figures don't include the droves of startups with 20 or so workers that have failed during the same period. That adds at least a few hundred more jobs to the scrap heap.

The list of Atlanta tech startups that have closed, or been gutted and sold at fire-sale prices is long: RealEstate.com, Derivion, WebMD, Home Wireless Networks, eTour, Figleaves.com, Everythingdecor.com, Epanacea, SideTalk, Vet Exchange, eGulliver, hSupply, Ultigo, Nexchange, Fibermarket.com, Changeaddress.com. There was even one called Myfavoriteshoe.com.

Where'd all those people go?

Chris Mangum, who runs an Atlanta consulting firm for tech startups called VentureX Group, says many entrepreneurs who had started IT firms here have gone into hibernation.

"They're joining the Peace Corps or going back to big corporations if they can," Mangum says. "So you talk to the VCs (venture capitalists), and there's no deal flow." No deal flow means few companies are being formed for the venture capitalists to invest in.

And at least one dot-com entrepreneur, Changeaddress.com founder Graham Balch, really did join the Peace Corps after his company collapsed. He traded his funky Spring Street offices for the jungles of Guatemala.

One former colleague of mine was laid off by a local tech company late last year, then found a new job, only to be laid off again and then rehired again. What's worse, he thinks the ax is about to drop again. Along the way, he's seen one executive betray another and get him fired by investors.

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