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The Next Wave of Websites--DeWese

March 2001
About 247 Silicon Valley smart guys dreamed up some e-commerce Internet sites to sell different stuff to printers and/or print buyers in order to get a lot of money. It really wasn't so much about selling anything. That really didn't matter. It was mainly about getting the money. The smart guys called their schemes "business models." Business model is smart guy terminology.

The smart guys didn't know, however, that printers work hard to come by their money and don't part with it easily. Printers have payrolls due every Friday and the paper companies want their money on time. So most printers walk around worried about "cash flow" because they've got to meet their nut. "Cash flow" is a legitimate accounting term that, for printers, means cash is available to pay the bills and, if you are lucky, there's some left over. "Nut" is another term that means "the minimum cash flow you need to pay all the bills every week or every month." Nut is synonymous with "breakeven."

Back to the Silicon Valley guys.

The smart guys had no money to start a business so they wrote up business plans and took them to venture capitalists who have loads of money. These business plans contained phrases like the aforementioned "business model," "strategic initiative," "market share," "projections" and "metrics management." These high-falutin' documents contained color charts and were bound beautifully. Some of the more enterprising smart guys made their presentations with dancing girls accompanied by live bands. The venture capitalists were impressed and entertained.

The most important job for the smart guys was to sell the venture capitalists on the "projections." The projections predicted how much stuff could be sold to the printers or the print buyers over, say, the next five years. When depicted on charts, the business plan projections for sales and profits were lines headed due north. Each of the plans promised the proposed Internet companies would go public in about two months and the venture capitalists and smart guys would become rich instantly.

Well, the venture capitalists, knowing a good thing when they saw it, wrote big checks to all the smart guys for amounts like $17 million, $22 million and even $58 million. You know—a little seed money to get things started. Getting things started meant redecorating a warehouse in contemporary glass and steel, outfitting elaborate workout facilities, buying every employee his own antique Wurlitzer juke box and getting go-carts for people to race up and down the halls. Why not? They all had stock options and would soon be rich.
 

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