Editor’s note: The “dot com” era, as brief as it was, brought many entrepreneurs into the public’s eye. As the bubble burst, many of those people thrust into the spotlight receded into the background. Local Tech Wire will be “in search of” these folks in the months ahead. Paul Mayer, the Fusion Ventures partner who hosted some of the best deck parties in the Triangle during the Internet heyday, is about to throw a yearlong luau for his family – well, sort of.
Starting July 1, 15 months after Fusion Ventures officially ceased all employment and stopped seeking investments and clients, Mayer and his family are temporarily moving to Hawaii.
After almost a year of tying up loose ends, such as helping the last of its portfolio companies file for Chapter 11 and facilitating the purchase of their assets, the Mayer family is going on a one-year sabbatical.
NetGift Registry and CareerCowboy are in bankruptcy court, NextAudio completed Chapter 11 and sold its assets to Triangle-based MediaSpan, and StartUpStreet.com ceased operations before all its cash evaporated. Today, Open Mind Publishing is the only Fusion company still operating, although rumor has it that it’s in the same cash crunch as every other startup.
Since Fusion’s demise, Mayer has been teaching the Business Plan Integrative
Exercise at UNC Chapel Hill’s business school Kenan-Flagler, as an adjunct professor. He’s also been doing strategy and management consulting work for NutraBuy, a provider of procurement software for natural foods stores.
“It’s a great time to go to Hawaii,” Mayer says, referring to the frigid venture capital climate. “Things should be all better when we get back.”
His three kids, ages 6, 9 and 12, will enroll in school in Kailua, on the island of Oahu, while mom and dad learn to surf and contemplate a business that’ll be easy to relocate. This is a good opportunity to expose the kids to a different lifestyle, since they’ve lived in the Triangle their entire lives, Mayer adds.
Despite the death of Fusion Ventures, Mayer still holds an impressive batting average. He and his wife Karen started the restaurant “Satisfaction” in downtown Durham in 1982 and sold it in 1988. Then they, along with Ed Fadel, founded CD Superstore in 1987. The company grew to over $35 million in sales and more than 300 employees. In 1994 Mayer and Fadel sold CD Superstore for $17.5 million to Borders Group, which at the time was a subsidiary of Kmart. Today, it’s the $2 billion parent company of Waldenbooks and Borders Books.
Memories of Fusion Ventures are bittersweet for Mayer, who says Fusion was the least work of all his ventures, and the most intellectually stimulating. Although he admits that there are some structural problems with incubation, he still thinks it has a lot of merit. “Most of the risks associated with incubation came true,” he says. “By the time we identified a good model, the economy was bad.”
Fusion originally modeled itself after Bill Gross’ Idealab! in California, where an incubator’s management team would come up with the business idea and then find someone outside to run the company. When Fusion realized the concept was flawed, it adapted and invited entrepreneurs to submit business plans. For example, the idea for Open Mind Publishing came from and is run by someone outside Fusion. But even that model wasn’t without holes. “If VCs believe that entrepreneurs who need an incubator aren’t going to be successful, and therefore don’t fund them,” Mayer said, “then it becomes a self-fulfilling prophecy.”
Knowing how the story ends, would he do it again? “If I could, I’d hit rewind and delete,” he says. “I’d choose to watch the movie [Startup.com] instead.”