Online Extra: Q&A with Razorfish's Jeff Dachis
As one of the so-called Fast Five, a group of young consultancies -- including Viant, Scient, ixl Enterprise, and marchfirst -- that caught the first wave of the Internet, Razorfish rose high before plunging just as dramatically. With the drop-off in IT spending and increased competition from traditional consultants like Accenture (formerly Andersen Consulting) and EDS, Razorfish is fighting for its life. From a high of $57 last February, the company's stock is now treading water at around $1. BusinessWeek's Heather Green spoke with Jeff Dachis, Razorfish's once-flamboyant chairman, CEO, and co-founder, who is trying to change the company -- and his reputation for arrogance.
Q: How do you think the company got where it was in the fourth quarter? Was it because the company was young or did too many acquisitions? A:
Q: How do you think the company got where it was in the fourth quarter? Was it because the company was young or did too many acquisitions?
A:I can't seem to think it's anything specific to us, per se, in that we got whacked right along with everyone else. I know that I have to stand up and take responsibility for what has happened. I will always take criticism, and I have the ability to learn from my mistakes and I am interested in hearing what we could have done.
Someone could have said, "You shouldn't have done those acquisitions." Well, then I wouldn't have been the size we were. Who is to say that we weren't preparing for what I believe to be the market opportunity that we all saw. Any private conversations you would have had with me six or eight months ago, you would have heard me say: "You know, typically, when you have acquisitions, you take out half the staff." It's not something we hadn't thought of. At every acquisition, we should have laid off a third of the people to take out the redundancies.
Q: Having come through all this, what do you think the other lessons were? A:
Q: Having come through all this, what do you think the other lessons were?
A:So, lessons learned: The numbers are the numbers -- they don't lie. The macro point on that one is, basic business sensibilities need to be adhered to 100% of the time. When you know that your client hasn't paid after 30 days, you have to collect that money on the 31st day.
In this time of greed and hype and 21-year-old kids expecting millionaire status in 10 days, all that stuff raised salaries for everybody. So, you see, in the second and third quarter, my salary base went up because the dam broke. My point is hold the line. Lesson learned is, we know how to run a business. For a brief moment, we didn't follow our guts. Another lesson learned is -- I don't want to say this with it coming out in the wrong context -- being more humble.
Q: What do you mean by that? A:
Q: What do you mean by that?
A:I mean, in my youth, I learned this from many wiser, older people than me....Act on the side of humility in every instance. Tell about how you feel to your friends, but be humble about what is going on out there, because in success, humility will win, and in failure, humility will win.
Q: What are you thinking of? Anything specific? A:
Q: What are you thinking of? Anything specific?
A:I never thought of myself as an arrogant person, but people tell me, you come off sort of arrogant. So I say to myself, "Well, what am I doing that makes people think that? I am just being myself. I am just being who Jeff is, and if Jeff is confident, sometimes that comes off as arrogant. If Jeff is opinionated, sometimes that comes across as arrogant."
So I realize that people can interpret that in different ways. I have always thought of myself as a humble person. I send my mom nice birthday cards. I am good friends with my dad. We're mellow....I come from an environment where we do the right thing by everybody. We created a company that carries some of those values through. Somehow what we did got misinterpreted...So we have to go out of our way to be humbler.
Q: Did you have an epiphany or something? A:
Q: Did you have an epiphany or something?
A:No, it's growing up....I am so much calmer inside -- my core is mellow, clear. I sleep at night, where I didn't before. I was up for four years straight before, worrying about our survival. I am still worried about our survival, but I feel like I have shifted into second gear...That perspective enabled me to view things in a way that said that I don't have to wave the big sign. Maybe I was trying too hard before...Maybe being insecure about certain things and overcompensating...I don't even know exactly what I was doing. Where I am now with it is, I am cooler and calmer.