Though he's only 24, Philip Kaplan's already been through the anxiety of seeing his company's stock plummeting and its product not selling, of hearing investors grumbling about a lawsuit. It's a bad gut feeling, one more and more people working for Internet start-ups are getting these days. You signed on to a dot-com business for the excitement of working in a revolutionary medium and the thrill of getting rich through stock options. But now the rumors of impending layoffs are circulating the office, and you're idling at your desk, just waiting for the boss to tell you to shut off the computer and hit the road.
New Yorker Kaplan is webmaster for Fucked Company (www.fuckedcompany.com), a "dot-com deadpool" charting the impending demise of the thousands of struggling Internet start-up companies. It's a macabre site for all those who bought the hype about the mad money to be had in e-commerce. Kaplan started the game in February as a way to pass the time with six friends, all of whom looked askance at the venture capital being invested in what seemed to them to be dubious business plans. It would have remained a peer-group amusement had not Kaplan, over the Memorial Day weekend, set up a pool page done up as spoof of the wired-world business magazine Fast Company, with actual news items detailing all the various start-ups that have hit hard times.
"Word of mouth caught on," Kaplan says, understating the matter considerably. Within a few days, 20,000 people signed up for the monthly pool; within a few weeks, the number had risen to more than 70,000. Players pick five companies they think are having trouble making it and rack up points based on the severity of the news emanating from the flailing firms. According to the guidelines, a company is chosen for inclusion in the pool when it does "something that signals -- or attempts to correct -- impending doom." Points are assessed for a range of such signals, from "general bad news to minor layoffs to all-out corporate slayings."
Kaplan says the site gets a lot of visitors from people who work in the Inter-net industry who are feeling anxious about their fates. Kaplan himself now runs his own e-commerce company, PK Interactive, but previously he worked for ex-MTV veejay Adam Curry's ill-fated THINK New Ideas, an advertising agency that specialized in interactive media.
The tide is definitely shifting. In its March 20 cover story, Barron's listed 207 Internet start-ups in order of "burn rate" -- how fast they would go broke if they kept spending their investment capital at the rate they were doing so. The news section of Fucked Company confirms dire predictions with one tale of woe after another: LookSmart.com employees are leaving en masse. Fashion500.com cancels all employee vacation, personal and sick time until the site's debut. Music distributor/promoter SpinRecords.com lays off 40 employees.
And you're kidding yourself if you think their demise won't have an effect on the rest of our buoyant economy. As Barron's re-ported: "America's 371 publicly traded Internet companies have grown to the point that they are collectively valued at $1.3 trillion, which amounts to about 8 percent of the entire U.S. stock market."
What's going wrong? Kaplan likens the web to a small-town market. "There is really a need for only one or two stores," he says. "Once you have Amazon, you really don't need any more bookstores. ... Of course, that store will make gazillions."
Not helping matters was that, in many cases, nobody involved was thinking about how these start-ups would actually make money. "It seems that the traditional rules of business do apply after all," Kaplan says. "We all look at these sites and wonder, ‘Well, how do they make money?' And that's the point -- they don't."
Kaplan foresees a long and happy life for Fucked Company, though. In some weirdly aggressive, survival-of-the-fittest mindset, some dot-coms have agreed to sponsor the prizes for future "deadpool" rounds. Kaplan doesn't expect to profit from the site, but he figures it could be self-supporting; his expenses aren't that high. "I have," he explains, "a burn rate of $35 a month."
