Electric Minds president Wendy York-Fess says the employees will be hired back, perhaps as soon as a month from now when the company gets its second round of financing. In fact, York-Fess said several employees are opting to keep working sans salary until the company can officially hire them back.
Electric Minds was founded by Rheingold and Randy Haykin, founding vice president of sales and marketing at Yahoo. Launched in November, Electric Minds' initial goal was to create a community for intelligent conversation about technology. It began as an advertising-supported Web site, but executives soon realized that it wasn't bringing in enough money. So the company turned itself into a business that created virtual communities for other businesses on the Internet.
York-Fess said the company had been counting on an intermediate round of funding that didn't come through and decided to go into "cash conservation" to stay afloat.
"We are in cash conservation so we can keep the site going and not shut the company down," she said. "We plan to fully restaff when we complete our next round of funding. The investment community is responding well to us, but it takes them awhile to go through their process."
The company yesterday launched the first of its sites commissioned by another company, this time a community site about IBM's Deep Blue chess match against champion Garry Kasparov. Electric Minds will continue to maintain and run the site, York-Fess said.