Paternot, Stephan 1974-
PATERNOT, Stephan 1974-
CAREER: Author, actor, and filmmaker. theglobe.com, New York, NY, founder/co-chief executive office, 1994-2000, vice chairman, 2000-01.
AWARDS, HONORS: New York Avignon Film Festival finalist, for Shutter.
(With Andrew Essex) A Very Public Offering: A Rebel's Story of Business Excess, Success, and Reckoning, J. Wiley (New York, NY), 2001.
SIDELIGHTS: While he was a freshman at Cornell University in 1992, Stephan Paternot met Todd Krizelman, a fellow student who was as introverted as Paternot, and who shared Paternot's fascination with computer games and his curiosity about the uprising computer resource called the Internet. Two years later, they sat in Cornell's student union trying to convince other computer programmers and graphic artists to help them launch a Web site. So began their notoriously fast-streaking success—and soon-to-be failure—in the dot.com world.
To chronicle his adventures, Paternot has written a combination memoir and insider's view of a computer start-up company, A Very Public Offering: A Rebel's Story of Business Excess, Success, and Reckoning. Paternot has come to represent everything that went right—and everything that went wrong—in the volatile, fast-paced Internet start-up craze of the 1990s. At age twenty he had a dream. By age twenty-six that dream was over.
Paternot began his quest as a young student struggling to maintain passing grades while plunging into the Internet world. He talked family and friends into investing $15,000, with which he bought computer equipment and set up a small office near Cornell University. He stayed close to his alma mater in order to tap into the talent pool of Web-savvy Cornell graduates.
Paternot's dream was to create a Web site that would be visited by people from all over the world. The site would combine attractive graphics and advertising and would be interactive. People could go to this site, check for messages, chat, and play games. His vision was to make the Web site a kind of online entertainment spot, which he hoped would eventually attract one hundred million users each month. In April 1995, the first month that the Web site went live, Paternot calculated that the site, which he named theglobe.com, received over 44,000 hits.
Paternot worked long hours to keep the site functioning. When the workload became too heavy for him and his partner, Krizelman, they enticed some of their fellow classmates to join them, offering a steady supply of pizza in place of salaries. In 1997, when the company moved to New York City, Paternot employed 115 people and had major financial backers such as David Horowitz, founder of MTV Networks; Robert Halperin, former president of Raychem; David Duffield, CEO of PeopleSoft; and Michael Egan, former chairman of Alamo Rent-a-Car, who alone reportedly invested twenty million dollars in theglobe.com right before Paternot and his partner decided to go public with their stock.
Theglobe.com quickly became a popular Internet site. At the site, visitors could play interactive games, create personal Web pages, and launch into e-commerce. Feeling confident that the future success of the site was all but guaranteed, on Friday, November 13, 1998 Paternot placed the company's stock on the NASDAQ stock exchange. Paternot and others watching Internet stocks witnessed theglobe.com "inadvertently becoming the benchmark for Internet frenzy when its stock soared a then-record 606%," explained a reviewer for Business Week. Suddenly, Paternot and his partner were each worth $97 million. However, as a reviewer for Publishers Weekly observed, "fortune can turn quickly: less than two years later, theglobe.com's stock price plummeted close to zero," at which point Paternot and Krizelman were singled out by the media as "global poster boys of Internet excess."
Commenting on Paternot's memoir, Rob Walker wrote in the New York Times, "Maybe because of his limited experience of life generally and business in particular, Paternot seems to have no real insight into the weird hothouse environment that made Theglobe's I.P.O. a landmark event." Instead, Walker stated, "he goes on at some length [in his memoir] about his briefly euphoric high life: Manhattan nightclubs were 'mindblowing.' Flying in a private jet was 'phenomenal.'" Walker commented that at the end of the book, Paternot informs his readers he has left theglobe.com in the hands of a new administration. In fact, as Walker noted, the Web site's stock is no longer listed and the Web site itself "closed its doors on August 15, 2001," as stated at the site's home page.
A reviewer from Business Week commented, "Paternot blames investors, bankers, and the press for the vortex that eventually sucked the life out of his company. But theglobe.com wasn't the victim of outside forces: It fell apart because it didn't have a fundamental business plan or strong vision that could be defended." The reveiwer concluded that if Paternot had known what he wanted to do and how people would best be served by the Internet, he might have succeeded.
Neil Barsky, writing for the Wall Street Journal, noted in his review of A Very Public Offering, "Mr. Paternot is now pursuing a film career. His partner is thinking of going to business school." Barsky added that in his book Paternot "makes the past several years seem like little more than an innocent detour." Commenting on Paternot's new direction in the film industry, Paul Durman, the London Sunday Times, stated that Paternot hopes to star in the film version of his book, which Paternot has described as "Rocky meets the Net." Studying to be an actor. Paternot also made two small independent films, Wholey Moses and Shutter, the latter which was a finalist at New York's Avignon Festival.
Dennis McCafferty interviewed Paternot for careerbuilder.com. McCafferty noted that others considering becoming involved in an Internet start-up company should "check out the workplace before leaping aboard. The questions you should consider are many-faceted, reflecting not just pay, but quality of life." "My experience is all about people taking risks because of their passion," Paternot told McCafferty, "But I don't see this as the end. It's time to examine what went wrong and build upon it."
BIOGRAPHICAL AND CRITICAL SOURCES:
Business Week, September 10, 2001, "Witless Dot-Com," p. 22E6.
Guardian (London, England), September 2, 1999, Hamish Mackintosh, "Working It Out: Global Warmer," p. 4.
Interview, February, 1999, Amy Harmon, "Stephan Paternot & Todd Krizelman," p. 42.
Los Angeles Times, February 7, 2000, Charles Piller, "Internet: Young Co-Founders Defend Their Tenure, Company's Performance Despite a Precipitous Decline in Stock Price," p. C1.
Publishers Weekly, July 23, 2001, review of A Very Public Offering: A Rebel's Story of Business Excess, Success, and Reckoning, p. 59.
Sunday Times (London, England), August 5, 2001, "Theglobe Stops Spinning," p. 2.
Times (London, England), November 26, 1997, Chris Ward, "Bonanza as Globe Turns Supernova," p. 19; January 29, 2000, Adam Jones, "Internet Duo Quit as Shares Tumble," p. 26.
Wall Street Journal, August 27, 2001, Neil Barsky, "How to Become a Millionaire, without Any Profits," p. A13.
Careerbuilder.com,http://www.careerbuilder.com/ (April 19, 2002), Dennis McCafferty, "Confessions of a Dot-Com Has-Been."
Cornell Chronicle,http://www.news.cornell.edu/Chronicle/ (March 9, 2000), Linda Myers, "CU Dot-Com Founders Discuss Industry Ups and Downs March 14."
IMDB,http://us.imdb.com/ (February 10, 2003), biography of Stephan Paternot.
New York Times on the Web,http://www.nytimes.com/ (November 4, 2001), Rob Walker, "Flash in the Pan."
Salon.com,http://www.salon.com/ (August 22, 2001), Katharine Mieszkowski, "Dumb, Dumber, and theglobe.com."
Stephan Paternot Web site,http://www.paternot.com/ (April 19, 2002).*