Maybe you’ve noticed: Internet stocks are trading at all-time highs. Your colleagues are doubling their salaries trading stocks on-line. Start-up valuations are denominated in billions, and the money is flowing like wine down the palm-shaded streets of Silicon Valley. Welcome to the wonder that is the World Wide Web.
We are concerned that you might not completely understand this puzzling phenomenon, so we want to share with you our thinking about a new venture we are founding. This is the real skinny on Internet company creation. It’s all here: What the pros are doing, where the smart money is going and the surprising shape of the Internet Economy. Truth is stranger than fiction.
Our idea: Create a designer start-up, carefully crafted to combine the most popular Internet product categories into one fetching investment vehicle. The company is a Web software, e-commerce and on-line-trading business rolled into one. The sole purpose of this endeavor is to siphon vast sums of money from a trusting public to the shareholders and employees of our new enterprise, HeyIdiot.com. We call it a cash portal.
We’ve studied the complicated dynamics of successful Web companies and applied the best practices to our new business. HeyIdiot.com is tightly focused on selling just one product: shares of HeyIdiot.com, which will be offered for sale at our Web site of the same name. This highly efficient, direct business model should enable us to dramatically lower costs, speed time to market and increase returns to shareholders.
By focusing solely on increasing our stock price, we can avoid many management distractions and costs associated with traditional businesses where employees are required to design and build products, find prospects, sell services and provide customer support. We are eliminating product development, manufacturing, sales, marketing, support and most G&A functions, along with their associated expenses. We hope these savings will let us more credibly argue that our Internet business could, eventually, be profitable. Our investment bankers are very excited about this unique positioning.
Great companies innovate, and so will ours. We have focused our business-planning efforts on product pricing. Our breakthrough strategy is to introduce a stock whose price can only go up. This startling innovation is made possible by the unique characteristics of the Internet business model — in which no known metric can be used to gauge value. Because history and comparables don’t matter, we are free to price our stock any way we want.
Let’s give the people what they want — an Internet stock that goes straight up and can’t go down, because we won’t let it. The plan is simple. Customers can buy as much stock as they want, but only at successively higher prices. The bidding is fully automated, totally on-line and conducted solely on our new state-of-the-art HeyIdiot.com Web site. People can purchase shares so long as they are willing to pay more for them than the last person who bought some. The rapid growth and bright prospects for all Internet businesses make this a low-risk investment.
Our marketing program is devoted to generating buzz. We plan to seed inane opinions about Internet-related activities, repeated endlessly on-line, around sushi bars and at industry trade shows by growing numbers of increasingly less-informed people. At its peak, monster buzz takes the form of mass hysteria. In a well-run business, this should closely correspond to the timing for a major secondary stock offering. In more traditional businesses, marketing executives work to generate product awareness, encourage repeat purchases and build customer loyalty. Since we are only out for a quick buck and not anxious to explain this scheme too carefully to anyone involved, we are focusing instead on buzz creation, buzz building and buzz management. Our goal is to raise our overall share of buzz in the target audience: ignorant but affluent on-line investors and retail day traders.
Concerned about liquidity? Don’t be. Whenever buyers outnumber sellers, we founders have volunteered to sell some of our own highly valued securities. Although a great personal sacrifice, this should ensure orderly trading, even as the stock price, buying interest and trading volumes soar with creative buzz building.
We are hopeful that this orgy of greed will continue long enough for some large media company executive to panic about his firm’s anemic Internet strategy. In our vision, Big Media Company then offers cash for all our shares and acquires a valuable on-line brand, our entire inventory of buzz and the empty shell of a business we are calling HeyIdiot.com. The founders then retire from doing real work and become professional venture capitalists.
Larry Ellison is chairman of Oracle. Mitchell Kertzman is CEO of Network Computers Inc. David Roux is a partner at Silver Lake Partners, a technology buyout firm..