A-The Beer and Fags Diet-Prologue:Dotcom Disaster

Dot.Com Debacle

"Sagittarius - The opportunities presented by this week's new
developments may seem chancy or just
impractical. But whether your investment is emotional or financial,
what you begin now could have
results that are as dazzling as they are profitable."

Six-figure salaries were never meant for the likes of me. When you get
to that level it's
public school confidence and bullshit that counts, it's got little to
do with ability. Six-
figure salaries don't happen to grammar school boys from Leeds. So
praise to the Lord
for the dot.com angel. But that was then and this is now. In the now
I'm just a middle-
aged, unemployable accountant with a none-figure salary, a large
mortgage and a young
family to support. Something went wrong.

My job before last was in Swindon. I was International Finance Director
for an American
software company, looking after its foreign subsidiaries. I'd been
there for five years and
even though we'd never made any money I had things ticking over nicely.
Eventually the
parent company lost patience with us. We woke up one morning to find
that we'd been
sold to a competitor. It was obvious that they already had a finance
function and would
have no need for me. I got ready for the severance negotiations.

But I didn't go looking for other jobs. The proposed redundancy date
was still several
months away. The thought of a fat cheque and a summer watching Euro
2000 on telly
was quite attractive. Nevertheless, I did follow-up a job application
that I'd made just
before the take-over. I'd found the job in the Financial Times. The
company was called
Int-Mar and they were looking to start up an internet market research
business in Europe.
It sounded right up my street.

The first interview was with a recruitment consultant in a London hotel
room. He was a
pleasant middle-aged gentleman from Dublin who told me they'd first
advertised the job
in Ireland but had received no applicants. I must have done OK because
a week later I
found myself in another London hotel trying to track down the Chief
Financial Officer of
Int-Mar's biggest shareholder, a company called Mar-Res Inc. This
outfit was based in
New York and quoted on Nasdaq, the US stockmarket for technology based
companies.
The CFO's name was Tam O'Doyle. After waiting for an hour I was about
to leave when
he finally turned up with his three young sons in tow. He sent the kids
to their room and
we settled down in the bar with pints of Guinness. Tam was a slightly
built Irishman and
"a character". He had the upturned nose and puckered face of a
leprachaun and talked at
nineteen to the dozen in a thick accent. He was also highly
intelligent, highly energetic
and very, very charismatic. He was everybody's friend and everybody
wanted to be his
friend. I couldn't help but like him.

I didn't hear anything else for three weeks and thought they'd
forgotten about me. Then I
received a call from the recruitment consultant. There'd been some
mix-up between him
and Tam as to who should be contacting me, each of them thinking the
other was doing
it. He offered me the job.

It was a tough choice. Should I take a long lazy summer counting my
redundancy money
or a highly-paid job running a glamorous business in Central London?
Then I read my
horoscope in a sunday paper, the one reprinted above. I cleared my desk
in Swindon on
31st January and started as European Finance Director of Int-Mar on 1st
February. I had
entered the bizarre world of dot.com disaster. My life would never be
the same again.

When I walked into Int-Mar on my first day there were only three other
employees. The
European General Manager (and one of my many bosses) was a Dutch woman
called
Suzanne. There was also a loud New Yorker who was to be the UK manager,
and a
marketing manager, both female. They were installed in serviced offices
in Pimlico. Talk
about a start-up! As far as finance and admin went it was a completely
blank sheet of
paper. They'd signed contracts with customers but no-one had ever
raised invoices. Not
that they could have raised invoices since they didn't have a VAT
number. And if a
customer had been stupid enough to pay it would have created a minor
issue as they
didn't have a bank account.

I got to work. On the second day of my new career I flew to Paris with
Suzanne to attend
a Shareholder's Meeting. It wasn't an auspicious start. Int-Mar had one
majority and
three minority shareholders. The minority shareholders were traditional
market research
companies based in Europe, but their aggregate shareholdings accounted
for less than
half of the company. Sam Jamieson was the Chairman of the majority
shareholder, Mar-
Res Inc, and Chairman of the Shareholders Meetings. He also had private
interests and
was a wealthy and successful businessman in his own right. I've never
worked out why
we loathed each other on sight.

Over the next weeks and months I lost myself in the madness of the
dot.com feeding
frenzy. When I started at Int-Mar the business plan had been to open
offices in the UK,
Germany and France. In that first six months we also opened offices in
Sweden, Italy,
Spain and Switzerland. We moved into prestigious and very expensive
offices in Portman
Square. We employed anybody who wandered through the door asking for a
job. Money
was no object. In fact, if ever Suzanne and I counseled caution we
would be criticized by
the shareholders for not spending money fast enough and for risking
first mover
advantage. The whole thing was out of control, a runaway steam train
whose boiler
burned an explosive mixture of dollar bills and the almost tangible
fear of being left
behind. I sometimes questioned my sanity. Had someone invented a new
form of
economics and not told me about it? Was it no longer a requirement for
a company to
make a profit, or to at least hold out the hope of making a profit at
some point in the
future? "But why should I care?" I would tell myself. "These
shareholders are senior
executives with quoted multinational companies, they must know what
they're doing.
They keep sending me money and telling me to spend it. I must be doing
something
right."

By the early autumn things were almost beginning to settle down when
the first
bombshell came. Mar-Res Inc announced they were going to merge with
another Nasdaq
company called Apollo. Apollo also had European operations. The IntMar
management
team were given responsibility for Apollo Europe and told to run the
two entities as a
combined operation in Europe. Tam O'Doyle was to stay as CFO of the
combined
worldwide operation. His opposite number in Apollo, Jenny Waldrop, was
to be moved
to a new role outside finance. I flew to New York to meet Jenny and
learn what I could
about their European business.

For those of you who don't know perhaps I should first explain that
there is a significant
difference between the background and training of UK and US financial
staff. In the UK
the terms "accounting" and "finance" are thought of as closely related
if not synonymous.
In the UK everyone gets some basic training in the nuts and bolts of
"accounting" ie the
mechanics of preparing a set of accounts. It's then down to an
individual's personal skills
as to how far they progress up the ladder to the more rarified world of
"finance" ie
interpreting a set of accounts and acting on them. Consequently, almost
all UK financial
people have a basic understanding of the nuts and bolts of how a set of
accounts is put
together and of managing an accounts department. In the US it is very
different.
Accounting staff and finance staff are perceived as two very distinct
animals, one is
trained in "accounting" and one is trained in "finance". But Finance is
considered the
high-flying go-getters career while Accounting is perceived at a much
lower level. As a
result it's quite common in the US to find that the senior financial
person in an
organization has little experience of running an accounts department.
If you add to this
the general insularity of Americans and their conviction that only
American laws matter
and that the only way to do something is the American way, then you
have a potent and
dangerous mix when it comes to managing overseas subsidiaries.

Jenny came from a finance background. I met her for lunch in a
fashionable basement
restaurant just off Broadway. She was very pleasant and helpful but
what I learned over
lunch appalled me. I learned that there was no accounting or financial
resource in Europe
whatsoever. They had never prepared separate financial statements for
the European
business. Europe had not even got a bank account. Everything, even
things like stationary
bills and employee expenses had to be paid through New York. Imagine
how thrilled the
staff and suppliers were to know that their payment requests had
disappeared into a black
hole three thousand miles away from whence they may or may not
re-emerge in many
weeks time. When I mentioned local idiosyncracies like VAT or employee
tax returns or
even the legal status of the corporate entities in Europe I got a blank
look. I could see that
the merger of the two entities in Europe was going to keep me busy for
a long time. I
could also see why Tam was getting the senior finance position in the
merged company
and Jenny was being moved out.

The formal merger of the two companies was scheduled to take place in
September. A
few days before it was due to happen another bombshell landed. I
received a telephone
call from Tam. He told me he'd resigned. He assured me there was
nothing sinister about
it and it had nothing to do with the company or the merger. He said
he'd been thinking
about a new venture for a while and that now was the time to make the
break. He told me
that he would be replaced by Jenny who would not now be taking up her
new role as
planned. This was the same Jenny who was directly responsible for the
shambles of
Apollo Europe. I felt very nervous.

We continued to work on the merger of the two European entities. It
remains a mystery to
me why experienced business people continue rushing into mergers the
way they do. It's
well-known that few mergers deliver the planned benefits and many fail
to deliver any
benefits at all. The cultural, political, practical and commercial
problems are so great as
to be almost insurmountable. I once worked for an American software
company that had
been formed from the merger of an east-coast company and a west-coast
company. When
I joined, ten years after the merger, they still regarded each other as
either east-coast or
west-coast and there were still residual tensions between the two
groups. In the early days
of the merger these tensions had been so great that one programmer had
committed
suicide. In the merger of the Apollo/IntMar European operations my
problems were
exacerbated by the issue of ownership. We had been tasked with merging
the two entities
and managing them as a single operation yet they had different
ownerships. The Int-Mar
business remained in the ownership of the four original shareholders of
which Mar-Res
(now Mar-Res Apollo or MRA) was the biggest. Apollo Europe was
completely owned
by MRA. Consequently the jointly-managed operation had to be accounted
for as two
entities so as to fairly reflect the different ownerships. This
affected almost every area of
the accounting. For instance, how much of my time should be charged to
Int-Mar and
how much to Apollo Europe? How much of the stationary, the telephones,
the office
flowers should be apportioned to one party and how much to the other.
It was a
nightmare.

The days and weeks flew by and in October we started the budget process
for the coming
year. While this was taking place the values of technology stocks
plummeted as the
dot.com bubble inevitably and inexorably burst. The four shareholders
of Int-Mar had
always acknowledged that it would take significant investment over
several years before
the company could make a profit. As the stockmarket continued to fall
the three
European shareholders held to their promise, but MRA, whose price had
been most badly
affected by the crash, completely over-reacted. Budget parameters
defining revenue,
expenses, level of loss and headcount would be handed down from New
York and some
time later a budget submitted, only for it to be rejected and sent back
with more stringent
parameters. We entered that despondent world where you can't achieve
your loss target
without cutting costs, but if you cut costs you lose the resources to
achieve the revenue.
This in turn causes increased losses. It's a vicious circle. We
eventually got a budget
approved in mid-January by sacrificing some senior and some
not-so-senior staff. I was
embarrassed and ashamed to be sacking good people just because the
yanks had panicked
and gone back on their word. As I escorted one director from the
sacking room to his
office to clear his desk I whispered to him that he should go and find
a job with a real
company.

I was quickly losing any confidence I'd ever had in the executive
management in New
York. Exactly one week after they'd approved the budget they asked us
to revise it. There
followed an endless series of revised budgets, forecasts, and
re-forecasts, each one
separated by a round of redundancies. It was deadly and morale was at
rock bottom.

In the last week of February, just over a year after I'd joined the
company I attended a
shareholders' meeting in New York. I was exhausted and ill and I didn't
perform well. I
now know that after the meeting Sam Jamieson, the chairman, told
Suzanne that he didn't
think I was on top of the job and she should get someone "stronger" as
Finance Director.
On top of the job?. Of course I wasn't on top of the job! For a start I
was never in my
office. I'd made trips abroad in each of the previous eight weeks,
desperately fighting to
hold his disintegrating European empire together.

The following week I received the call from Suzanne. It was late on the
Friday afternoon
as I was preparing to leave the office for the weekend. She told me
what Sam had said. I
was so demotivated and demoralized even before the call that I
immediately asked if she
wanted my resignation. She said she didn't want me to resign but if
that's what I wanted
to do then she would respect the decision. We agreed I'd think things
over and get back
to her the following Monday. She made me promise I wouldn't decide
anything without
talking it through with her.

I thought about nothing else all weekend. I talked it all through with
my wife and with
my best friend. Then I sat down with a piece of paper and listed the
pro's and con's of
resignation. I was smoking myself senseless and all I ate was junk food
or heavy business
meals. I was taking no exercise, I'd become a fat bloated pig and I was
highly stressed. I
was a prime candidate for a heart attack. I began to wonder if
resigning might not put
twenty years on my life. I was making international business trips
almost every week.
When I wasn't travelling I had a four hour commute to Portman Square.
Professionally I
could only see trouble ahead, with the business continuing to
deteriorate and the partners
at loggerheads over the ever-increasing demands for funding. I
certainly wasn't enjoying
my life, I was miserable and I never saw my family. All that the future
held was a long,
slow and painful death for both me and the company. And I'd lost the
confidence of the
Big Boss. This was a man I neither liked nor respected, and I wasn't
prepared to work on
probation while I tried to win back his confidence. My position was
clearly impossible.

And why shouldn't I resign? I would only be putting myself where I
would have been last
summer if I'd taken the money instead of the new job. The only
difference was that I was
one very lucrative year older.

I called Suzanne and told her of my decision. She didn't try to talk me
out of it. I drafted
an announcement and Suzane e-mailed it to all staff in her name:

"After lengthy consideration James Andrews has decided that a four-hour
daily commute
and constant international travel are incompatible with the demands of
bringing-up a
young family. He has therefore tendered his resignation and will be
leaving the company
in due course. I will start to look for his replacement immediately and
inform you of
developments as they progress."

When I walked out of Portman Square for the last time I knew that if I
ever went back to
this world I would never break free of its choking grip. It's not even
as if I'd ever really
enjoyed it. I'd never felt comfortable. I felt like I imagine a
transsexual feels before the
operation. I felt like a creative and imaginative person trapped inside
a number-
cruncher's body. And despite professional success I'd never considered
myself to be a
particularly good finance director. This was my chance to change my
life forever. I would
fight off any fear and uncertainty and I'd try to find out whether
happiness could be a
way of traveling and not a vague destination. After all, what was I
going to miss? I would
probably miss the status and kudos of being the boss but I'd just have
to earn my self-
esteem in other ways. I would certainly miss having so much money, but
everyone else
seems to cope. I certainly wouldn't miss the commuting, the long hours
and the stress. I
might miss the glamour of the idea of international travel, but not the
reality of it. Surely
I had the mental rigour to define myself other than just through work?
Surely I was
creative enough to measure my success other than just with money? I was
not going back
to that world. Thank you and goodbye.

As I write these words the share price of MRA remains below one per
cent of its previous
high.

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