Phil Wainewright

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A blazing venture

Surely this will be the dot-com business plan to end all dot-coms?

First published in MicroScope
March 27th, 2000

I shall have to nip down to First Tuesday one of these days to find a backer for a business idea I've been mulling over. I gather that, at First Tuesday events, all you have to do is put on one of those green badges that says you're a budding entrepreneur with a fantastic new idea to make money on the Internet, and venture capitalists with pots of money swarm all over you. Or have I got it wrong and it's the other way around?

Anyway, I just know that my idea is a surefire winner, because it encapsulates in one simple idea the fundamental concept that lies behind every highly-rated Internet investment opportunity. My business plan is for an Internet site that gives away dollar bills.

The economics are compelling. Internet users will flock to the site, attracted by the promise of free money. The enormous volume of traffic will make the site a mecca for Internet advertisers — everyone will want to run their banner ads there. Naturally, visitors will be required to view a certain number of pages before 'earning' their dollar bill, thus generating the ad revenues to fund the giveaway.

No tomorrow
Initially of course, we would give away our dollars without completely earning them back through advertising. It is a central tenet of any sound Internet business that your first priority is gaining market share rather than generating revenues, which are bound to follow later on. Indeed, it is a well-known fact that venture capitalists tend to look askance at business plans that break even within the first year or two. This is seen as a sign of not investing sufficiently in building up the business to establish that vital market dominance.

So to make absolutely certain that our business is a sure-fire success with the VCs, we plan to give away our dollar bills like there is no tomorrow. Our venture will become the undisputed 100-pound gorilla at distributing free cash. It is the only way we can be sure of commanding the funding necessary to establish this leadership position. Any plan that was less aggressive would expose us to competitive threat from others attempting to steal our market position by giving their money away more rapidly. The only way we can convince the VCs to fund our business sufficiently to guarantee success is to make sure they know we will give away their money faster and more ruthlessly than any other comparable venture.

Price explosion
Having become the primary source of free money on the Internet, the business plan really starts to kick in. We will be able to charge premium rates for advertising, since our users will be the same people who form the core of every Internet venture's customer base — people who want something for nothing. We will add ecommerce capabilities, enabling people to spend the free dollars they've earned buying products from selected partners. This will not only save us the cost of physically distributing dollars to our users, we will also earn commission on the sales thus generated.

We will reward frequent users with loyalty bonuses, offering them additional dollars as a reward for reaching certain free dollar thresholds. For the lucky few, there will be the opportunity to exchange their free dollars for share options, giving them the chance to participate in the inevitable stock price explosion once our much-watched venture finally goes forward with its Nasdaq IPO.

Fantastic prospects
I know the naysayers will say, "This is ridiculous. How can you possibly make money by giving it away?" I can understand their confusion. In the old economy, you earned income by making products and selling them. But in the new economy, it is the ability to communicate a message that is most highly valued. Our dollar bills purchase access to consumers on behalf of our advertisers and ecommerce partners. They can only sell their products by spending their dollars with us, and we pass their dollars on to our visitors to ensure they keep coming back to us rather than to other sites. And the more they come back, the more dollars we are able to give them to spend with our partners and advertisers, who in turn generate even more income to spend on advertising with us. Ultimately, this can't fail to be a money-spinner.

This is such a very modern, Net-generation business, you may be surprised to discover that it has a historical precedent. I didn't know this myself until the other day, when I was explaining my business plan to an old friend who's something of a financial guru. "You know what you've created?" he said. "It's a modern-day version of the eighteenth-century 'Undertaking Which Shall in Due Time be Revealed.'" Apparently, there have been similar ideas during economic booms all the way through history — or bubbles, as they used to call them. "But this one really caps them all," he said. "It's an absolute fantasy." And thinking about the fantastic prospects for the business, we both laughed until we cried.

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