In 1985 Toni Sikes started a small publishing company in New York City. The Guild published sourcebooks - essentially catalogs - that architects and designers could use to survey the works of artists who created pottery, stained glass windows, or any other craftwork. In 1990, she moved to Madison, Wis., and took the business with her. 'It was a nice little publishing company,' she says.'I was interested in growing the company larger and reaching out into the retail market on behalf of the artists we worked with.'
Then came the Internet. In 1998 Sikes raised $700,000 from investors and launched a major online initiative. The Guild soon became the Guild.com. In the next couple of years, Sikes raised more than $40 million to fund her growing company. But in the current downturn, Guild.com fared no better than any other company with that three-letter albatross attached to its name. In January, Sikes sold the company to Ashford, a public luxury-item retailer, in order to satisfy investors. Six months later, she bought her company back.
While Sikes and other entrepreneurs were jumping the dot-com train, other small businesses watched with amazement, skepticism, and perhaps a little envy. What does Sikes think about her contemporaries who chose to sit out the wild ride? 'That might have turned out to be a good thing,' she admits. 'They should pat themselves on the back. We all need to be more tech-savvy, but it doesn't hurt to be conservative.'
Sikes' company has slimmed down operations and expectations. She no longer considers herself a 'dot-com.' 'We are a company that sells art through a variety of means, one of which is the Internet,' she explains. Even the name will be changing. 'The new company - and that's what we are, a brand-new company - is called Guild LLC,' Sikes explains.
'LLC' is an organizational description, not (as '.com' sometimes seemed to be) a religious affiliation. The company has 33 employees and no full-time IT staff. In other words, it's just like any other small business.
What Have We Learned?
When dot-coms were in their heyday, we at SBC struggled with the problem of how to write about these companies. In many cases, they fit right in with our vision. Sikes and many others who started companies were not technological experts. They simply believed technology could give their business an edge. The start-up ethos of the boom also meant many dot-coms were quite small - the little guys finally making good.
Many of these 'small businesses' were horribly mismanaged. Others quickly inflated into mid-sized or even large companies. And most had access to a pool of investment money that most people don't. Throwing money at a problem was never good management advice. Everyone by now has had a hearty laugh at people who believed, as Sikes put it, 'the Internet was going to change everything.' But it's time to take these companies seriously, to figure out exactly what small business owners - including Sikes - can learn from them.
In some ways Sikes' business may look similar to the one that existed ten or even five years ago. The company had always maintained its traditional publishing business, and that has helped it weather the shakeout. 'We came out of this craziness with our traditional business intact,' Sikes says. 'A lot of companies like ours jettisoned theirs.'
But there have important changes. During the past few years, the company also launched a catalog, which it uses to drive business to the Web site. And while employees at The Guild were never particularly technology-conscious, just about everyone at Guild LLC has Palm Pilots, Blackberries, and cell phones hanging off their hips.
The changes at Sikes' company mirror changes in the culture at large. We've become more knowledgeable about IT - whether we wanted to or not. We've made bad investments and found a few things we can't do without. 'I still believe in the Internet, and I do think that it's going to change our lives,' Sikes says. 'But it's not going to happen overnight. It's going to happen person by person, bit by bit.' That's a cautious, hopeful statement we might all agree with.
David G. Propson is senior editor for SBC.