Meet a dot-com troubleshooter

How do you rescue a struggling dot-com? Kate Hanaghan recently caught up with a technology industry veteran who might have just pulled it off...

If you're looking for job security, don't work for a dot-com. That's what common sense in 2002 tells you anyway.

Not so for Colin Tenwick, the one time boss of Red Hat Europe and now CEO of StepStone. When a three-year contract ended with the Linux distributor Tenwick considered his options. What he decided to do next was comparable to leaping into the lion's den. He became boss of StepStone, the online recruitment website just when the company was mid-tailspin.

Although ready for a tough challenge, Tenwick was taken aback by what he encountered upon joining the company.

"If I knew quite the state the company was in I probably wouldn't have gone down that line," he told silicon.com. "I was led to believe there was lots of funding in place and restructuring underway."

When Tenwick stepped into the CEO position, StepStone was on its death bed with about two weeks' worth of cash left. He describes his initial weeks at the company like watching a Ferrari hit a wall at top speed. The reason? He soon discovered there was no agreed funding process or restructuring plans in place.

"If I hadn't have joined there would have been no chance of [the company] getting the money," he said.

So what did his peers and friends think about his decision to dash into the dot-com danger zone?

"I got a lot of feedback. The overall view was it wouldn't effect my career because most people considered StepStone to be dead anyway."

The irony of a corporate old-timer (Tenwick also had stints at Sybase and CA-owned ASK Group) being called to the rescue of a young up-start isn't lost on Tenwick. But consider this: in May 2000, Tenwick told a UK newswire: "I think that the dot-com bubble won't burst. But clearly there are going to be winners and losers." Ouch - how wrong he was.

StepStone was formed in 1996 and proceeded to commit every dot-com sin under the sun. In Tenwick's words, it had "all the excesses of a dot-com including the structure of a company with a $1bn turnover and the swanky offices".

But Tenwick also claims E30m (£18m) was spent on technology that was never fully used. He refers to the company's platform and explains: "Its failure was one of the reasons why the UK company subsequently failed. The drain on cash for the group as a whole clearly was a contributing factor that led to the perilous state of the company."

Part of this huge investment was spent on a Siebel CRM system. "StepStone was once touted as the largest customer in Europe for that technology. But the system, built by Cambridge Technology Partners, was never wheeled out across the company," he said. There are also numerous Sun servers "fully paid up but still sitting in a warehouse".

He blames a number of issues ranging from ill-defined functional specifications through to bad project management and development and "ultimately technology that will not work seamlessly together".

What Tenwick faced last November was a company that was totally over-bloated. Consequently, the first thing to be slashed was jobs. It laid-off 526 staff - its headquarters alone shrunk from 160 people to 14 - and he closed unprofitable operations across 10 countries.

It was a start. At the time a company spokesman told silicon.com: "We've been in discussions about a possible sale of the company but there is nothing definite at the moment."

But by April of this year, Tenwick was in position to tell Reuters: "None of the discussions we have with others get away from the fact that StepStone will be an independent company. Furthermore, we don't need to raise any additional funds."

The company famously pulled out of the UK last year but has since returned via a partnership with Workthing. But don't expect StepStone to make a full entrance back into the country within the next nine months. For the time being Tenwick is convinced the best option for shareholders is for the company to stay focused on mainland Europe.

"The recruitment industry is on its knees but StepStone has maintained most of its marketshare throughout," he said.

Tenwick is now getting more sleep than he was six months ago but remains philosophical about the company: "The patient has gone through life saving operation and is now in the recovery room." Let's hope there's no relapse.