Chasing the nouveau riche
Internet players measure their success against the windfall wonders
08/02/99, By Allan Hoffman, FOR THE STAR-LEDGER
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Just five years ago, Theresa Quirk was struggling as a single mother, not knowing whether she could make the mortgage payments on her Ringwood home. She worked in sales for a company specializing in pre-press equipment. "You lose accounts, you win accounts," she recalls. "You never know how much you're going to make."
Then the Internet happened. Things moved fast, and soon she had left her job and started a Web development company, QuirkWorks. In her first year, she broke six figures.
"This year is probably going to be another big year," she says. "I picked up Sony as an account."
Those mortgage payments? Not a concern: The house is paid off. In fact, she's buying another, "a huge house."
Things could not be better for Quirk, but in these wildly entrepreneurial times, with endless troops of twentysomethings turning dorm-concocted business plans into millions (to exaggerate, just a bit), Quirk has her doubts, now and then, about the route she's taken. A six-figure income doesn't seem so special, when you read about start-up kids worth $40 million just a few years out of college.
Quirk hears the stories. Yahoo!, with a market valuation in the vicinity of $30 billion. Its two founders, now in their 30s, were Stanford grad students with a list of favorite Web sites. Or theglobe.com, a site offering free home pages, started by two Cornell grads in their mid-20s. Market value: close to half a billion. Or countless other tales (or so it seems, reading the business news).
"To be perfectly honest, it makes you kind of jealous," Quirk admits with a laugh. "I remember DoubleClick when it was someone like me."
Just a few years ago, DoubleClick -- an online advertising firm -- didn't exist. In mid-July, it announced that it was acquiring a rival for about half a billion dollars. Market cap: about $4 billion.
As for Quirk, 41, she focuses on her clients -- something she speaks about with genuine enthusiasm. "I have never set time aside to myself as a client," Quirk says. "I could very well have had a Yahoo! or an Amazon or something of that style if I had focused on myself as a client." And it makes her think: "Maybe I should have focused on getting a Web site off the ground."
Consider this brand of angst a particularly late-90s phenomenon, a psychological byproduct of the Internet boom. You see others making it big, and you wonder, "What am I doing with my life?" And you think these thoughts even if you've got a more-than-respectable salary, a sporty car, and other trappings of success.
Not long ago, the routes to success -- and the meaning of success -- were much more established. For those with top-tier educations, there were careers in investment banking, law, and medicine, with clear paths -- often requiring years of work and study -- to six-figure salaries and security. Even if you were starting a technology-related business, the value of what you owned was determined, for the most part, by what you sold. Microsoft played by those rules, as did Apple, Dell and others in the vanguard of the PC revolution.
Now, when viewed through the prism of the Internet boom, those paths to success seem dated, a walkie-talkie next to a wireless Palm handheld organizer.
"For my generation, the benchmarks were so clear," says career counselor Beverly Baskin, 50, executive director of Marlboro-based Baskin Business and Career Services. "All I had to do was go to college and I was considered very successful."
These days, it's an era of "self-starters," she says, and it "isn't as good for the slow and steady."
One client of hers was 23 years old and making about $60,000 in a job computerizing the administrative department of a school system. He had friends in the same field. Some moved out to Seattle, the home of Microsoft, Amazon.com, and countless Internet start-ups; they started to make double what he was earning (in a region with sky-high home prices, it should be noted).
"He really was very disgruntled," she says. " 'What am I doing in a school system?' " he asked himself. " 'I'm not on the cutting edge.' "
Maybe not, but a $60,000 salary when you're 23? Not bad.
"He wanted immediate gratification, immediate success, immediate money," Baskin says.
She hears the same thing from others, and not just from those working with technology. Wall Street and investment banking professionals sometimes envy the quick success of friends who have made it big with the Web. Still, they themselves have achieved financial success, right?
"They don't know it," Baskin says. "They don't think they're successful. They're using these technical whiz kids as a benchmark."
Self-esteem suffers, she notes. People feel vulnerable. And that's unfortunate, as a certain amount of luck is involved, when it comes to getting involved with the right start-up or technology.
And the reality of the start-up, in fact, isn't quite as glamorous as many imagine. Success is not assured, though it's clearly an attraction. Csaba Szakolczai, who is 40 ("I'm an old man," he jokes), joined Actinic Software of East Brunswick, a provider of electronic commerce software, last fall.
In looking for a job, he wanted a start-up: "I don't feel like a cog in a machine here." Now, it's a matter of "building a company," and for Szakolczai, who grew up in New York and spoke Hungarian as his first language ("I learned English watching James Cagney movies"), that means bringing in revenue.
Down the road, who knows? "The long-term goal," he says, "is to have an IPO and have that billion dollars fall into our lap."
He realizes the risks. The technology news, he notes, doesn't focus as much on the failures as the high-flying Web companies. "For every one they tell you about that made $23 million, there are probably tens of thousands who are going broke or just keeping their heads above water," he says.
Those with knowledge of what things were like before the Internet boom have a different perspective than their younger counterparts -- though their goals may be the same. "Can this be real?" Mahesh Muchhala, 52, president and CEO of CertifiedMail.com of Springfield, sometimes wonders.
The frenzy over Internet companies "adds to our entrepreneurial outlook," he says. He started CertifiedMail.com, which provides, as its name implies, a virtual version of certified mail (for e-mail, of course), with an eye toward an IPO. He and his partner met with lawyers, hired professional auditors, and incorporated in Delaware. He works 16 or 17 hours a day, cutting back to 6 or 7 hours on the weekend, when he spends time gardening or listening to classical Indian music.
Even as some wonder whether they should join an Internet start-up, others find themselves part of something with bigger possibilities than they ever imagined. That's the case with Joseph Grueter, treasurer and founder of Intell-A-Check (www.icheck.com) of Belleville.
Grueter, 37, owned a collection agency. A software company grew out of the agency, from the need to accept check payments over the phone. Now, with its software capable of accepting checks over the Web as well, the company sees itself as taking a chunk of the transaction fees involved in Web commerce (now paid to credit-card companies). With forecasts for online commerce projecting revenues of trillions of dollars in several years, that chunk could be exceptionally valuable.
Back in 1994, when the software product launched, did they sense its huge potential?
"Absolutely not," Grueter says. "We just thought it was going to be a debt collection tool. The Internet is what made all of this possible."
Grueter owns a house on Lake George, and now one of his partners is thinking about buying a nearby house. They talk about buying a sea plane to get up there. Or, down the road, the Intell-A-Check corporate jet.
For young people involved in technology, such stories -- and the allure of hooking up with a start-up -- can be hard to ignore. They see the hot new business magazines, with cover stories like this one, from Business2.0: "Billionaires of the Web. Last Year: 1. Today: 14. How They Made So Much So Fast." Or job ads, now accessible on the Web, touting stock options. That's an attraction, when the headlines at a technology news site, like News.com, include "China.com more than triples on trading debut," "Liquid Audio sizzles on trading debut," and similar stories -- all within a couple of days.
Companies now have extremely tough competition for qualified information technology workers. Quirk hired a programmer when he was 20 years old, paying him $30 an hour. Then it was $65 an hour, and eventually, he got a full-time job, earning about $130,000 at 24.
"Finding people is probably my biggest problem," Quirk says, "and probably the biggest problem for all of my clients."
Of course, not everyone expects a six-figure salary at an early age, or wants to start a business.
"While everyone may have an entrepreneurial streak in them and dream of great opportunities, our undergraduates all know what to expect: a good job with a starting salary of (roughly) $40,000," says Miles Murdocca, a lecturer/assistant professor at the computer science department at Rutgers University.
Murdocca sees both undergrads (in computer science classes) and older students (at the university's Internet Institute continuing education program, which he runs as its educational coordinator). "Making a big kill with a startup venture is not a driving motivation for either population," he says. "Who wants to retire at 23? It's more fun being in the mainstream."
Maybe so, but for some, success is only real if it's quick and lucrative. You want to be a millionaire by the time you're 30? Why not. To anyone who grew up in a time when jobs were not so easy to find, such claims have an aura of unreality. "Where is people's patience today?" says Baskin, and then catches herself, adding, "I'm not the one to judge."