Digital Mad Man: Razorfish Co-founder Jeffery Dachis

Read the second in this series here.

Razorfish founders Jeffrey Dachis (right), who studied ballet, and his childhood friend Craig Kanarick (left), a tech whiz who had recently graduated from MIT Media Lab, plucked the digital agency name out of the dictionary. (Yes, it’s a real fish.)

In four years, Razorfish exploded from a pair of 27-year-olds laboring in a New York apartment in 1995, to more than 2,000 employees and about $250 million in revenue. More than just a hive of techies, Razorfish and its Silicon Alley digs were considered cool and urban. Kanarick remembers the office as a place you could stay up late and rollerblade around while inventing the future. The hip agency and outspoken CEO Dachis quickly became lightning rods for both fans and foes of the Web “revolution.”

Razorfish relished the attention, opening offices across the U.S. and snapping up other interactive agencies, including Spray in Scandinavia. In 1997, Omnicom bought a large minority stake. And during 1999, the agency went public, raising $48 million at $16 a share.

When revenue fell off the cliff in 2000-2001, the pair – not yet 35 – was forced to resign.

Kanarick later co-founded a retail marketing studio and digital design lab for architecture firm Rockwell Group. This year, he unveiled New York Mouth, an online store for local artisanal foods. For his part, Dachis, 45, established the Dachis Group in 2008. The Austin-based social media marketing agency is hosting a social business summit in Shanghai in mid-April.

Photo: Jeffrey Dachis and Craig Kanarick (center left and center right) at the Razorfish/Plastic merger party (with Shane Ginsberg, left, and Len Sellers, right) in San Francisco, 1998.

ClickZ: What in the zeitgeist of the ’90s moved you to start a Web services outfit?

Dachis: I was all about the expression of ideas through the arts, like dance, theater, photography and magazines. But distribution of these expressions was controlled by a few wealthy institutions. We saw that digital changed all that, distribution became cheap and it was democratized. Frankly, I sucked at creating those [art] forms. But I saw how I could be part of distributing them digitally.

Craig was the super brain who had the digital chops to do it and I was the strategist, the business guy. My roots are entrepreneurial – I come from a family of hustlers. When we started I told Craig I’d work for free until he decided that I was worth paying. He decided to pay me when I brought in our first client Time Warner for a $20,000 assignment to work on its Pathfinder project [an Internet portal].

CZ: What was a typical sales call like?

JD: We were laughed out of every conference room we were in. Company execs acted like; “Who are these kids and what are they talking about?” They didn’t know if the Net was going to be a way to sell stuff, a tool for publishing, a place to put ads or a technology platform. We were evangelists to help these businesses get on the Internet. Our client Charles Schwab, for instance, had no online brokerage at that time; they just had a thundering herd of brokers knocking on doors.

CZ: What drove you day to day?

JD: It was unbelievable. Imagine what it is like to be aware that you are part of a revolution, that you get to change the way the world works. Here we were, going to Japan to work with Sony on a joint venture. Amazing. You want to show your clients everything the Web can do. You want to turn the world on.

For me, 1997-98 was the most fun. We could watch as the type of work we did turned into an industry. From 1996 to 1998, our agency went from 30 to 600 employees.

Then in 1999 the amateurs, the poseurs showed up – they were in our field just to get rich as fast as they could. They didn’t care about the projects. The VCs produced fake companies and there was too much IPO activity for the market to absorb. It was sad to see.

CZ: Was your hubris a necessary part of the scene?

JD: We weren’t trying to be cocky or flaunt our success, but we were honestly enthusiastic and excited. We knew we were part of a revolution and these were extraordinary times. It was a lot to absorb for people in their 20s and 30s. We had no mentors, no examples to tell us, “What should I do?” I’ll cop to some youthful indiscretion, but not for being fake or inauthentic. Our success was real.

Of course, for businesses that were having their lunch handed to them, it would make them jealous and angry toward us, and see us as arrogant.

CZ: How do you remember agency life?

JD: I think we were pioneering the Net culture of today. We had the open floor plan, the massages and the scooters in the office. If I was there, so was my Weimaraner dog.

The other side of the culture was about being functional. For desks, we used stainless steel pizza tables that cost $140 each. We bought them by the hundreds. We thought they looked cool; all the Razorfish offices had them.

For a break, about once a month the agency hosted a drink tank — we’d pick a local bar and pay for all the employees’ drinks for one night. And the next morning at the office, we bring in “heart attack sandwiches” made with bacon, egg and cheese, to counteract the hangovers. My dog stole more than a few of those sandwiches.

CZ: What about the parties?

JD: We were known for our May Day parties, but there were no live nude girls. Sorry to disappoint. One year, the party featured a Brazilian Drum Corps and about 2 a.m. we had 1,000 White Castle burgers and 1,000 Krispy Kreme donuts delivered. Another party had a full-scale boxing ring in the center.

The thing was, we weren’t spending VC money on this stuff. Some dot-coms in that era threw lavish events with VC money because they were expected to burn cash. We paid for everything with our own money. We earned it.