Requiem for a Dot-Com
The Baltimore resident's company, CycleShark, was an online seller of motorcycle accessories: helmets, leathers, gloves, boots, etc. The firm employed 23 people. Meisner and co-founder/tech whiz Paul Feldman had raised more than $3.5 million in start-up capital. Yet a mere four months after going online, CycleShark shut down, becoming perhaps Baltimore's first dot-com casualty.
After the fall, I met Meisner at the Mount Vernon Donna's for a late-afternoon lunch. Neither of us had much to do that day, so we chatted over spinach salads--a dish he'd grown fond of while dining regularly at the Donna's in Canton's Can Company complex, which also housed CycleShark. A lean 6-footer with jet-black hair, dark eyes, and a wide salesman's smile, Meisner resembled a respectable David Johansen (aka Buster Poindexter). He drank decaf, a switch from earlier, more caffeinated days. He still possessed that salesman's boyish enthusiasm, but also an air of hard-bitten experience not usually found in 31-year-olds.
He comes by it honestly--for Meisner, the last two years have been a hell of a ride. The idea to start an e-commerce shop came to him in late 1998. He was working in sales and marketing at a motorcycle-accessory company when he got a call from a friend who's started an Internet company. "I'm worth $38 million," his pal taunted. Suddenly Meisner's $2,000 Christmas bonus didn't seem so hot. He quit his job, moved with his wife back to his parents' place in Columbia, and wrote a business plan for a Web-based cycle-accessory shop. By the following summer, he had caught the interest of New York-based Sandler Capital Management, a venture-capital outfit looking for fledgling companies to invest in, companies considered by banks to be too financially risky.
Meisner had what looked like a good model. The motorcycle-accessory market is run by independent dealers with limited stock and mail-order companies with six-week delivery times. Meisner, himself a bike enthusiast, envisioned creating an Amazon.com of the cycle world, a one-stop shop for everyone from road-track kids to the executives who ride Harleys on weekends. "We were going to be the player for the motorcycle market," he asserts between bites of spinach.
CycleShark got off to a good start--Sandler Capital had invested a cool $2 mil to get the ball rolling--but the company quickly piled up debt: a couple hundred thousand to advertise in motorcycle magazines here, another couple hundred grand on inventory there, salaries for customer-service people and editorial staff, down payments to Italian leather companies to make high-end CycleShark gear . . . all before the July 2000 launch.
Trouble was, the firm needed more money to keep going after that. A couple of years ago Meisner might have easily found additional capital, but by last summer the stock market was tanking and investors were leery of dot-coms. Despite strong initial sales, Meisner says, he was never able to secure a second round of financing. CycleShark stumbled on to the end of October before closing in bankruptcy.
Talk about frustration: Imagine spending six months to build a Wal-Mart-sized store of your dreams, only to have it close a few months after opening. Usually it takes years for a company to pay off its initial investment, but these days dot-coms don't get that kind of leeway. In early November, everything in the CycleShark office was hauled off to auction, including Meisner's own PC, which he'd brought in from home. "I walked out with nothing--handful of pens and that's it," he says. Not that any of the company's 23 employees--some of whom moved here from the West Coast for their jobs--fared any better; they were let go with a week's pay.
"Looking back, I would have done it differently," Meisner says now. He searches for what-ifs. He should have partnered with a high-profile cycle shop. He should have been more selective about advertising. He should have . . .
But perhaps CycleShark's failure was beyond his control, a function of a change in the climate beyond everyone's control. Once Internet investing was cast as foolish, venture capitalists, always a fickle bunch, swore off the dot-coms and moved on to fiber optics and wireless technology. Even e-tailers as big as Pets.com and Finance.com are finding themselves shy of both enough investors and enough customers to stay afloat.
Certainly, the Internet party is over and the baby fat is being burned off. But just as investors may have been irrationally exuberant before, perhaps they're being too cautious now. Sure, there are bad Internet business models. But there are also ones that might actually work. And CycleShark might have been one of those.
At least that's what was gnawing at Meisner as we lunched. He's moved beyond the grandiose dreams, looking for work and pondering ways to resurrect CycleShark on a much smaller scale, but in the back of his mind the thought still lingers--what might have been with just a little more money or a little more time.
"Everything was going great," he says. "It is brutally frustrating not to know how things would have turned out."
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