By Stanley Reed
The past 12 months have been the nastiest in a decade or more for people in business. That is just as true for Europeans as it is for those across the pond, even though Europe's economic downturn may not be as advanced. European tech startups, for instance, have proven even more ephemeral than their American counterparts, and their founders are just as far out of favor. Chiefs of more traditional companies, too, have come under barrages of verbal tomatoes.
With the economic climate in powerdive, it should come as no surprise that some of those BusinessWeek dubbed Stars last year have already crashed. Each one's tale is different, but there are some common themes. The most prevalent is the bitter ending--or is it just a pause?--of the romance with any business associated with technology. Then there's the ill-advised or bungled merger. That has proven an all-too-frequent trap for CEOs who were pressed by bankers and even shareholders to do deal after deal in merger-crazy 1999 and 2000.
HALF-MAST. Of course, he can take comfort in the fact that it's hard to find a European tech-startup chief who hasn't been hurt. One of the brassiest of the breed was Karl Matthaus Schmidt, 32, founder of Nuremberg online broker ConSors. Supreme in his confidence that he would eat the big banks' lunch, he hoisted black flags in mourning for the banks to mark his initial public offering two years ago. Now that Germany's once lively Neuer Markt has become a junkyard where few investors want to venture, ConSors is in the red, with losses of $13.7 million in the first quarter of this year. He would be looking for a sugar daddy if he didn't already have one: His father runs ConSors' Nuremberg-based parent, SchmidtBank.
Schmidt is not the only one in tech hell. Many upstart telecom entrepreneurs have ended up there, too. One of the best and brightest was Stefan Krook of Sweden's GlocalNET. A year ago, at age 27, he was a charter member of Stockholm's tech brat pack, sticking it to ex-state telecom giant Telia. But Telia is getting its revenge. With GlocalNET's stock down 90%, Krook is scrounging for cash to keep his dream alive.
While the tech sector is the best place to look for wrecked dreams, it's not the only one. Ernest-Antoine Seilliere, chief of France's employers' association, known as MEDEF, is a humbled guy these days. He thought he saw a window to lead key reforms of France's labor and welfare systems, and business leaders cheered him on. But some employers distanced themselves when he demanded action on politically sensitive pension reforms. Seilliere is keeping up a brave front, but he has found that politics is a rough game--especially for amateurs.
SHIFTING WINDS. It's tough for pros, too. Last year, Angela Merkel, chief of Germany's Christian Democratic Union, seemed destined for stateswomanly greatness. But now, the odds have lengthened against her ever becoming Chancellor. She hasn't had much success in pulling the party out of its funk since the money scandal emerged that has besmirched the legacy of former Chancellor Helmut Kohl. The betting now is that she will eventually lose out to Bavarian premier Edmund Stoiber.
Of course, Stoiber is unlikely to make much of a splash against Chancellor Gerhard Schroder's Democratic Socialists in 2002. Like Britain's once-dominant Tories, the CDU appears doomed to spend years in the political wilderness. In politics, as well as business, today's stars can often be tomorrow's fallen.
Reed covers European business from London.