Other stars of the dotcom boom have also kept a low profile. Founder of the failed youth portal K*Grind, Jon Peters, was involved in another online entertainment venture which stalled called Dallus. Tribe founder Milt Barlow is the owner of Integrated Travel Holdings.
Several other dotcom pioneers have left the country or are working for offshore businesses, including Graham Bristow, the founder of the online media company LibertyOne (which featured Nicholas Whitlam as its chairman). Bristow is now chief executive officer of the Delaware-based holiday time share company the Island Residence Club.
LiberyOne’s assets included a grab-bag of internet properties, including Patrick Rafter’s website and the web development house Zivo. It debuted on the Australian Stock Exchange in October 1998, and was at one time valued at more than $1 billion. It chewed through around $100 million before collapsing in early 2001, while Zivo was sold to rival Australian internet company Sofcom in December 2000 for less than $50,000.
Zivo’s arch rival in the web development space had been Spike Networks, which was founded by Chris O’Hanlon, Ruby Blessing and Stephen Murphy. That company also went public and saw its share price soar, only to be caught in the tech wreck.
O’Hanlon left the company in April 2000. These days O’Hanlon describes himself as reclusive. After leaving Spike he spent several months recovering his physical and mental health in the US, before taking up the position of creative director of global brand marketing for Mazda Motor Corporation in Hiroshima for three years until 2003. For the past six years he has had little to do with mainstream business.
O’Hanlon has written several articles and advised artists and arts organisations on creative use of online media, and has taken an interest in the debate over seasteading (creating permanent dwellings at sea outside of the territories claimed by governments). He has also invested in designs for very low-cost micro-housing and micro-communities both on land and the water.
“Perhaps because of the practical, real world issues encircling these initiatives, I’ve found myself gripped by an increasingly dystopian vision of where new media and communication technology is taking us – to a degree that makes me deeply regret my ardent evangelism of it in the 90s,” he says.
Murphy went on to found a highly-successful search marketing company, PayPerClick, while Blessing is working part-time with the NSW Government on its web strategy, and dabbling in other start-ups.
One of the most prominent debates during the tech bubble was whether online retailers would harm the likes of Coles Myer and Woolworths. Names such as dstore, 131shop, TheSpot, Chaos Music and Wishlist.com.au shot to prominence, but failed to justify the panic they caused.
dstore was established in January 1999 and raised more than $30 million, which was spent on technology and an extensive media campaign. It even attracted former NSW premier Nick Greiner as its chairman. The company burned through its cash and was sold to Harris Scarfe in November 2000 for a reported sum of $3 million.
When Harris Scarfe was placed in administration in April 2001, dstore’s brand was acquired by the Queensland company Hotshed Retail, which continues to operate it today.
dstore’s founder, David Gold, moved on to the Hudson Conway-backed WiFi hotspot start-up Azure Wireless, where he stayed until December 2006. He continues to invest in web-based companies including Aconex and RedBubble, but the majority of his time is taken with the healthy fast-food company Igloo Zoo, which has opened a handful of companies around Australia.
He sees the irony in being involved in a bricks and mortar retail company, but says his goal is to integrate the sorts of technology that were developed at dstore into a regular retail business to improve efficiency.
“It’s quite different for me – it’s a business where you have revenue coming in day one, which is quite good,” he jokes. “But it is also frustrating. With technologies we talk about things happening in minutes or hours. With traditional bricks and mortar stuff it takes weeks or months, or even years.”
Gold says with hindsight it was not surprising that so many executives who were in their late 20s in the dotcom boom got caught up in the euphoria.
“The whole dotcom boom was our first entree into the business community, and it was impossible for us to appreciate how unique those circumstances were,” Gold says. “And yes, we knew there was some irrationality about it, but you still saw value that could be created from nothing quite quickly. Nowadays that is a much harder slog.”
Gold says the collapse of dstore has not had a significant impact on his reputation. Igloo Zoo is backed by the Lieberman family and others who also backed him in dstore.
“I’ve been quite fortunate in that regard,” Gold says. “I’m not sure if Australia has moved on from that, or if I’ve been lucky, but I am sure there are people out there who wouldn’t back me now because of dstore. And I think people look back on that time for what it was.”
Gold’s former boss from LookSmart, Evan Thornley, resigned as CEO of his company in 2002 and stood down from its board in 2004. He was elected to the Victorian Parliament in 2006, but resigned unexpectedly in December 2008 to take the role of chief executive for Australia at the electric car company Better Place.
Of dstore’s contemporaries, Chaos Muisic and Wishlist.com.au continue to trade, although the latter’s founder, Huy Truong, is now a partner at Yarra Capital. 131shop is no longer trading, while TheSpot was sold to David Jones in 2000, having burned through an estimated $12 million in the 18 months after it was launched.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
