Not so long ago, dot-com parties were spirited celebrations of a start-up's life cycle, marking milestones like Web site launches, the receipt of fat checks from venture capitalists, a move into new offices, even anniversaries. But times have changed. Welcome to the latest class of dot-com gathering: the wake.
Friday night, a handful of former employees of the Ocean Channel opened their empty South of Market live-and-work space to throw an "unlaunch" party." Ocean.com -- described as the site for "everything ocean" -- never surfaced. But plenty of mourners and partyers in search of free drinks came to lament what could have been -- and commiserate about their own job losses.
It was hard to tell that the $3,500-per-month loft -- about the size of a comfortable studio apartment -- had been home to a bustling Web start-up only weeks before. Desks, chairs, computers, printers, copiers and assorted office detritus had been auctioned off on eBay. The floor-to-ceiling shelves covering one wall were bare, save for three small boxes of now-useless business cards. Even the phones were disconnected, forcing the party's hosts to trek downstairs to let in guests who announced their arrival via cellphones.
Listening to Ocean.com's former employees describe their site's would-be niche, you can almost chart the company's trajectory from idealism to shipwreck. Describing the Ocean.com venture as "the Discovery Channel for water," Vin Diec, former vice president of operations, sounded sad: "I thought we had a sure thing," he said.
Their intentions were good. Passing a tray of toasted bagel bites from Costco, Jonathan Bates, former vice president of product development, recalled how he had joined Ocean.com following a string of go-nowhere Internet experiments, including a stint at Comedyworld.com. Before Ocean.com, Bates was just another Internet cynic: "My heart wasn't in it at all." He was considering opening up a falafel stand in midtown Manhattan when a call from Matt Comyns hooked him. "He said this would be environmental, that we'd educate the next generation about the ocean," Bates said. "We had a commitment to being pure, clean and good. It would be about educating children and doing good, not necessarily offering e-commerce at every turn."
That kind of earnestness may have moved investors in February, but by March they were singing a different tune. Venture capitalists "don't have the patience," said Comyns, a senior vice president at CNet who had served as an angel investor and board member at Ocean.com. "Before, it was the sky is the limit. Now they don't have three weeks, let alone three years, to see you get to profitability. The risk was too great."
Comyns didn't want the Ocean Channel to be another cash-hemorrhaging start-up like Space.com. "Who wouldn't love $60 million," he mused, "but we knew we had to start somewhat small."
Comyns was convinced that a tightly run content company could support itself on advertising. But before that could happen -- and before Ocean.com could acquire the $4 million in series A funding it needed to create the broadband programming its founders envisioned -- the start-up went through $500,000 in seed funding.
A sizable chunk went toward the purchase of the domain name alone. More precious cash was funneled into the production of the gorgeous bit of Flash animation that greets visitors to the expensive URL.
Apparently, only the San Francisco office has closed. The founder and CEO of Ocean.com, a marine biologist from Santa Barbara, isn't ready to give up on the dream just yet. Michael Hanrahan (who, strangely, was not invited to the wake) says he's still trying to raise money for his "ocean portal." But wooing investors has always been a challenge.
Despite the interest Comyns and Bates said they received from V.C.s, none were willing to fund the site. "It did have aspirations to be a do-good vehicle, and with certain investors it resonated really well," explained Comyns. "But it wasn't enough, at least during this time period."
It was time to cut bait.
There were no candles burning, no floral arrangements, no morose organ music. Even though almost everyone had been touched by the downturn, the guests were able to laugh at others' tales of woe.
"I just got laid off," said Jennifer O'Donnell, who until three weeks ago had been a site producer at E-greetings.com. (Vin Diec burst into laughter at that. "I interviewed there!" he said.) E-greetings executives called an all-hands meeting and told employees they'd meet individually with their managers to learn whether they were in or out. "I walked into the room and saw the box of Kleenex and a white envelope and I knew," Jennifer said brightly, as though she was describing what she had for lunch rather than her layoff. "It's not so bad because it's happening to all my friends," she said. Her next gig? She wants to join another dot-com.
One partygoer -- a principal in his early 30s at an Internet advertising firm -- related how he had been preparing a case study of one of his clients at an upcoming industry conference; it would now be a eulogy. The client? Pets.com. O'Donnell regrets its demise. "I adopted a kitten this summer and ordered a bunch of stuff from them," she said.
The Internet needs more Jennifer O'Donnells.
Despite the initial cheer, a palpable gloom set in at the unlaunch party as the evening wore on. The turning point came when one partyer started handing out brochures for a Web job-hunting resource called Flipdog.com. "A lot of us here are in between jobs," he explained. People started heading for the door.
"It's a bad time to be in the content business," Bates said wistfully. After a second he added, "It's a bad time to be in the Internet business."