For love and stock options

Mom.com: When an Owings Mills start-up hit the financial reality wall, some employees stayed on without paychecks, trying to save the company

July 20, 2000|By Neal Thompson | By Neal Thompson,SUN STAFF

On a recent Tuesday afternoon, the 28 employees of fledgling Owings Mills-based Internet company Mom.com filed into the conference room for an impromptu staff meeting.

Tom Loveland, their gangly CEO, looked down at the speech he'd written before dawn and broke the news: "We don't have enough money to pay everybody anymore."

A few people laughed. But as Loveland continued speaking, his voice shaky, they realized it was no joke. Mom.com was in trouble.

The stock market plunge several months earlier had scared off investors. The well was dry, and Loveland could afford to keep only four employees.

Many had given up stable, higher-paying jobs to work in an office where dogs and kids were welcome, where shorts, T-shirts and sandals were the uniform, where the hours were long but the lure of stock options was strong.

Loveland asked the staff to decide: What should we do next?

"This is just marketplace and money," he told them. "If you have to go, you have to go. But we still want you all and love you and wish you would stay."

For a company that came about by accident and has yet to see its first birthday - or its first profits - the weeks since that June 20 staff meeting have been an agonizing, sometimes tearful exercise in downsizing, dot-com style.

But an odd thing has happened. Even without paychecks, people keep showing up for work.

The employees of Mom.com shared an appetite for risk and riches. Many had worked for start-up tech firms or run their own companies or switched careers once or twice. They were lured to Mom.com by its cozy atmosphere and the chance to quickly see the results of their toil.

Stephanie Citron had taken career chances before, including a stint 10 years ago at a new magazine called Spin. She preferred the culture of a start-up, the lack of rules and protocol that can promote free thinking.

And, typical of a Internet firm, Mom.com offered employees stock options that could someday turn to gold.

But there was something else about Mom.com, its vision and its mission, that made working there more than just a job. Citron started out intending to work part time as an editor and eventually found herself working 50 hours a week, expanding beyond her job description into sales and marketing.

"For me, this was not just launching a widget," said Citron, 39, one of the company's first staffers, who would bring her children, ages 10 and 6, to the office to ease the strain of her long hours. "As a mom, this was something so real to me."

Others felt just a strongly. And it all began with an acronym.

In 1987, Loveland had founded Mind Over Machines, which developed computer networks and software for such customers as the U.S. Army and Baltimore Gas & Electric. In 1994, he decided to create a Web site for the Timonium-based firm and registered an Internet address - www.mom.com.

Then, the dot-com phenomenon began changing Wall Street, the modern workplace and many workers' lives.

Companies selling goods, services or information over the Internet seemed to prosper before earning a cent of profit. Employees could cash in stock options and retire as millionaires in their 30s.

Loveland, who was "clueless" at the time he had registered the name, realized he was sitting on a prime piece of Internet real estate.

Mom.com rhymed. It was easy to spell. And unlike Amazon.com, Monster.com or Google.com, it was obvious at a glance what the site would be all about.

Loveland considered just selling the name, but with two partners - Michael Teitelbaum and David Egli - decided instead to create a company that would provide information to mothers over the Internet. In September, they began hiring programmers, Web designers and editors.

On the night of Dec. 15, in its temporary offices at Loveland's Timonium company, the small staff gathered around a computer screen as Mom.com was uploaded onto the Internet.

Filled with parenting advice, facts about pregnancy, shopping links and chat rooms for working mothers, Mom.com joined the millions of other sites linked across the World Wide Web. The staff of 17 celebrated by smashing a bottle of champagne against the building.

Seed money - much of it from the family and friends of Loveland and his two partners, along with some equity investments from a handful of other Internet companies in Baltimore, Chicago and New York - reached $1.3 million.

More staffers were hired in January and Mom.com moved to new offices outside Owings Mills, next to Poetry.com and Picture.com. They threw bean bag chairs, books and toys in one of the rooms and encouraged new employees to bring their children to work. They worked late into the night, energized by the thrill of getting more "hits" on their digital community.

Along the way, friendships bloomed. The young staffers - the average age was 33 - met each Wednesday for lunch, went bowling and visited each other's homes. With pets and children in the office, they all got to know each other's families. They became a family.

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