Kiwi in dot bomb wonderland

What's it like working for a company that burns through $US100 million in its 15-month existence yet never sends out a single bill?

What’s it like working for a company that burns through $US100 million in its 15-month existence yet never sends out a single bill?

A bit like being Alice in Wonderland, says 52-year-old New Zealander Rhiannon Herrick, who worked for five months at the now defunct online marketplace PetroCosm.

Herrick’s dot-com adventure ended on April 20 when the Houston-based company closed, leaving 200 people jobless. She has just returned to New Zealand after completing a thesis at Sheffield Hallam University in northern England, in which she describes her time at PetroCosm as “an exciting, bewildering, fascinating experience …”

PetroCosm was set up by oil and gas giants Chevron and Texaco, with venture capitalists Crosspoint Ventures, to run an e-procurement website for the oil and gas industry. The marketplace used software developed by Ariba and Requisite Technology, while KPMG Consulting helped build its technical architecture and website.

Herrick, a consultant who left New Zealand two and a half years ago to work for telecommunications companies Sita in Geneva and Equant in Paris, was part way through an MSc in Sheffield in “knowledge management” when she went to work for PetroCosm. Given the task of creating product manuals, she soon realised the company had no business plan or documented business processes.

“It had already run 50 auctions, but none had been charged for. When I asked who was responsible for developing and implementing pricing models, the answer was ‘no-one’. They never actually billed anyone the entire time the company was operating. It dawned on me that nobody was controlling expenditure and revenue.”

Herrick says it was not seen as a priority to develop the traditional financial processes and business procedures. “It was more important to do the sexy, exciting, high-profile ‘build the site, sell the idea’ stuff.”

Meanwhile, the company continued to run through its funds, setting up satellite offices in Calgary, the UK, India, Scotland and Singapore.

People were also hired whether they were needed or not. From July to December 2000, six helpdesk operators, two supervisors and a senior manager were hired. After nine months one of the supervisors was reassigned to a new role and Herrick asked her why. “Ask me how many calls there have been to the helpdesk,” she said. Herrick looked at her, and the supervisor made a circle with her forefinger and thumb. “Zero”.

Lack of infrastructure and no business plan weren’t PetroCosm’s only problems. There was trouble with the software, in particular incompatibility between the Requisite Technology-created catalogue and Ariba.

“As things got tighter they decided to ignore everyone else and just concentrate on delivering to Chevron,” says Herrick. “The delivery date was March 31. I heard that date over and over.

“We all knew there were problems between Requisite and Ariba but everyone thought it would all come together.”

The marketing department continued to churn out upbeat stories, but a week before the closure chief executive Norm Chambers warned staff the company was having trouble finding more funding.

To boost morale a baseball game was organised, but on the day of the match the entire staff was summoned to the 12th floor. “We got there and Norm Chambers said, “We’ve been unable to find any venture capital and we’ll have to close our doors. Go back to your desk, pick up your stuff and go’.”

Herrick says many staff didn’t bother handing back PDAs, laptops and cellphones because they weren’t sure they would get paid. “A lot of people had moved to Houston just to work for the company. Obviously people were very angry.”

She has kept in touch with five former colleagues and says many people have found new jobs in the oil industry.

After the closure she took time off to write her thesis and returned to New Zealand three weeks ago.

“I still think e-procurement will come and much more so. It is one of the most obvious places for companies to capitalise on the web.

“Now the challenge for me is to figure out what I want to do next. It would be really interesting to work with a dot-com here.”

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