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Dot-coms try to do good


Andrew Beebe had an idealistic vision. He regarded the Web as a great "populist medium." He dreamed of creating a "values-oriented business" that would "help small companies and nonprofits bridge the digital divide." But Mr. Beebe had a problem. His company had moved into a building in San Francisco's Mission district -- into space previously occupied by about two dozen small firms and community groups. For all his intentions of becoming a dot-com do-gooder, Mr. Beebe, the 28-year-old chairman of Bigstep.com, suddenly became an enemy of the people.

People who know him describe what happened next as an epiphany. He realized he could not focus maniacally and myopically on building a company: he also had to contribute to his community. Mr. Beebe's version is not so tidy. He says Bigstep was always committed to philanthropy. In fact, he set up shop in the Mission, a vibrant hub of Latinos, artists, and working families half a mile from the trendy dot-com ghetto South of Market, because he wanted to get involved in the neighborhood. What is true, however, is that Bigstep's mess, emblematic of tensions building in San Francisco and tech hubs across the country, pushed him to get more aggressive about public service.

Mr. Beebe met with eight neighborhood groups and asked, What should I do? They told him what the community needed most: affordable space and the skills to land jobs at firms like his. And so Mr. Beebe designed an ambitious program of community involvement, including philanthropy, internships, and technology training. His staff is also trying to secure affordable space for displaced nonprofits.

His efforts mark a nascent trend in the notoriously self-involved dot-com world: a small but growing number of young companies are starting to think beyond product launches and stock options to the hardships of their surrounding communities.

"We want to be part of the solution, not part of the problem," says Mr. Beebe, echoing a phrase from the '60s.

That sentiment is not only nice; it's also necessary. In San Francisco; New York; northern Virginia; and Austin, Texas -- plus other dot-com communities around the nation -- locals have increasingly come to see dot coms as the cause of all that is wrong with society, ranging from skyrocketing rents ($1,500 a month won't cover a one-bedroom apartment in most parts of San Francisco these days) to the growing gulf between tech haves and have-nots. Some San Francisco streets are sprayed with graffiti urging the new rich to leave. "Go Home Fucking Yuppies," someone wrote across one newsstand that holds advertisements for upscale apartments. There have been street protests, growth-limitation proposals, even talk of "war on dot coms." In September, members of the Mission Anti-Displacement Coalition in San Francisco occupied Bigstep's offices, and 15 were arrested.

A lot of Net workers have discovered that their self-image -- we're cool, we care -- is thoroughly out of sync with neighborhood stereotypes. "There's this mythology out there that San Francisco is overrun with SUV-driving, wine-swilling hedonists, and these people have no interest in the quality of life in the city," says Derek Gordon, corporate communications director at Digitalthink, a San Francisco e-learning company with a strong volunteer program.

Of course, most dot coms are hemorrhaging cash, so they can't kiss off community involvement with fat checks to charities or $10,000 seats at symphony galas. "We're still working toward profitability, so cash is not always what we bring to the table," Mr. Gordon says.

Instead, the new dot-community involvement bears a closer resemblance to '60s-style activism, a vigorous hands-on approach that is an extension of the hard work, hard play ethos that defines Internet startups.

No doubt, community outreach can be great for a dot com. Executives report anecdotally what surveys of old-line companies have shown: volunteer programs boost employee morale, loyalty, even recruitment. That's no small benefit, given the tech labor shortage. It's also no surprise. It feels good to pitch in. The question for some neighborhood leaders is: how much good does it do?

There is no model for the new community outreach. These are dot coms, after all. Nobody thinks to look to their elders, corporate giants like Hewlett-Packard or Levi Strauss with laudable track records in public service (see "Relating Communally"). Dot coms tend to wing it, often with hubris, as if nobody has ever done this before. "We've really just been trailblazing ourselves," says Dexster Smith, president of Digiscents and cofounder of TechOakland, a year-old network of technology companies that raises money for three neighborhood computer training centers.

Many initiatives spring up by chance. Bessie Carmichael Elementary School, across the street from DigitalThink, once was featured in a political ad as the most decrepit school in California. Now, 50 of the company's 400 employees are tutors and mentors, and a smaller group does cleanup and repair jobs.

At Yesmail.com, an email marketing firm in Chicago, "we were constantly hit by a lot of organizations for support," says Anthony Priore, vice president of marketing. Now a cross-divisional team sorts through requests and organizes volunteer efforts. The company, for example, is a "breakfast sponsor" at Inspiration Cafй, which serves meals (and hope) to the homeless. A group of Yesmail workers arrive at 4:30 a.m. on the last Monday of every month to cook, serve, and wash up.

Some goodwill programs are born of corporate blunders -- a type of community relations as penance. Green Mountain Energy Company, for one, resells electricity from clean, renewable sources and prides itself on its environmental commitments. "We recycle," its Web site proclaims. "We have compost bins in our office kitchen. We turn out the lights when the meeting is over." But when the company moved from Vermont to Texas, it rented an office in a beloved, ecologically sensitive watershed -- and found itself taking fire from the people who should be its customers. They scrambled to recover but could not break their five-year lease. After consulting with local activists, Green Mountain designed a far-reaching program, including trail cleanups, environmental internships, a $20,000 donation to a local land trust, and an employee incentive package to encourage workers to live in a designated "desired development zone," rather than contribute to sprawl.

In many cases, community outreach dovetails with commercial goals and hiring needs. Yesmail is running a pro bono email fund-raising campaign for a foundation that grants wishes to terminally ill children. TechOakland was formed to promote San Francisco's East Bay (from Berkeley and Oakland south to Hayward) as a high-tech corridor -- and almost instantly, the group's gatherings turned into fund-raisers for three neighborhood computer training centers. "On the one hand, tech companies have this incredible labor shortage," Mr. Smith says. "On the other hand, you've got entire communities of folks who are eager and willing [if given the skills] to participate in the economic revolution that is happening."

So strong is the link between Bigstep's business goals and some of its community efforts that an observer wonders where benevolence ends and marketing begins. Bigstep is working with Mission Language and Vocational School to incorporate the company's Technology Adoption Program into the school's curriculum. TAP teaches small firms unfamiliar with the Web how to leverage its power to be successful online. It's easy to see how such training would help small business owners in the Mission, many of whom use English as a second language. It's even easier to see how the grassroots instruction would benefit the dot-com executive trying to amass a global customer base of small businesses.

But so what? No corporate outreach -- or personal charity, for that matter -- is wholly altruistic. Bigstep and other dot coms seem to have stumbled onto something that traditional corporations are just discovering: community relations as a branding tool.

DOING WELL BY DOING GOOD

"Strategic social investment [is] all the more important for global corporations as they seek to establish a consistent image and market presence across the world," Bradley Googins, executive director of the Center for Corporate Community Relations at Boston College, wrote in Strategy & Business, a newsletter published by consultancy Booz Allen & Hamilton. "When a company makes a commitment to the community part of its core business strategy, it not only helps attract and retain top employees, but it also positions itself positively among customers and, increasingly, improves its position in the market."

Most Net companies still don't get it. Of the 350 members of the Corporate Community Relations center, "maybe one or two" are dot coms, Mr. Googins says. "By and large, this isn't an area where we've seen a lot of interest."

The picture looks somewhat different in the West. The Entrepreneurs' Foundation, based in Cupertino, 40 miles south of San Francisco, encourages startups to get involved in philanthropy and volunteerism -- and to donate pre-IPO stock. The foundation opened two years ago, with ten participating companies. Now it has seventy-one, including Bigstep. Fourteen of them have already gone public, and three were acquired, creating a $10 million fund for education and youth development. In September, foundation representatives met with people in Austin, Texas, who are interested in replicating the model.

Impressive as the foundation's numbers are, however, they represent only a fraction of Bay Area startups and a tiny portion of the newly created wealth. At most dot coms, employees are too busy working to have dinner with their families, let alone serve breakfast to the homeless. "Survival is uppermost in people's minds," Mr. Googins says.

So is stability. Why invest in a neighborhood when your company might tank in six months? An irony of the backlash is that Net workers are being attacked as rich yuppie scum just when they're facing layoffs and a punishing stock market.

Dot-commers know the neighborhood antagonisms. But every one you talk to -- including people trying to help the community -- says the same thing: we're not jacking up rents or evicting tenants. It's the landlords. Why take it out on us?

Nevertheless, Mr. Beebe and others acknowledge that companies haven't leaped to soothe tensions, much less confront the dark side of the economic boom. "As young companies, we are less knowledgeable about what it means to be part of a community," he says.

In the early '90s, before he was an entrepreneur and unwilling poster boy for dot-com invaders, Mr. Beebe was a government major and student body president at Dartmouth College. "I studied gentrification," he says with a wry smile. "It's one of the few things about my academic career that I remember."

Bigstep has grown quickly since Mr. Beebe and three partners founded it in 1998. There are 150 employees spread over five floors of the hulking Bay View Bank Building on Mission Street, the neighborhood's main thoroughfare. Among the previous tenants were beloved community fixtures, including the Mission Economic Development Association and San Francisco's Children's Council. Both have found new homes nearby.

STEPPING RIGHT UP

In September, Mr. Beebe stepped down as CEO and became chairman to devote more time to community outreach. (Lucy Reid, formerly executive vice president of the Consumer Banking Group at Wells Fargo, succeeded him as chief executive.) Bigstep also hired a full-time community involvement manager, Melissa Daar, who lives in the Mission, speaks Spanish, and worked 14 years as a nonprofit organizer. Mr. Beebe, also a Mission resident, says his only frustration is that he can't do more in the neighborhood, more quickly.

"You ask a lot of the community" when you move in, he says. "We're 150 now. I want to be at 150,000. I'm going to be coming back and asking for more space and more employees of different kinds."

Many people praise Mr. Beebe for his community efforts -- not only the innovative ones, like tech training and the donation of pre-IPO stock, but also the sweaty work, like installing lockers in a neighborhood center and cleaning up a gritty park. "It's very genuine," says Mara Brazer, managing partner of San Francisco Partnership, a business development organization. "He's not doing it for some greater gain."

But as the September sit-in shows, he obviously still has outspoken critics, people who see dot-com outreach as nothing more than window dressing. "What they do needs to be in scale with the impact they create," says Luis Granados, executive director of Mission Economic Development Association. "Bigstep helped to evict 26 entities -- the efforts are not in scale with the impact." (It's 24, by Bigstep's count.)

The heated rhetoric irritates Mr. Beebe. "I've been put off by all the blame, this idea that if you have 'dot com' in your name, you're the problem." Then he shrugs. "I understand politics. I don't take it personally."

Fran Smith is a Red Herring contributing editor. Write to letters@redherring.com.

ADDITIONAL RESOURCES

Read about protestors occupying Bigstep's offices in San Francisco.

HP's community relations site with links to organizations outside the company.

Levi's community relations site.