How Venture Capitalists Would React If Today’s Big-Shots Were Start-Ups
STAMFORD, CONN. (SatireWire.com) – It’s often said that if someone approached the FDA with aspirin today, the product would never be approved. Would the same hold true for Priceline, Amazon, Yahoo, and other big Internet players? If they took their ideas to their version of the FDA – venture capitalists – would they be “approved,” Or would VCs ignore them like a banner ad?
Jay Walker, Priceline
Jay: Hi, I have an idea for a dot-com.
VC: It’s not business-to-consumer, is it?
Jay: Yeah, but it’s different. It’s Priceline. We’re going to sell unused airline seats and hotel rooms and let people bid on them. So you could go from Atlanta to Seattle for, say, $100.
VC: Sounds pretty good for a direct flight.
Jay: Oh, hey, not direct. Not usually. Maybe a connection or two.
VC: So Atlanta to Cincinnati to Seattle.
Jay: Yeah, like that. Maybe throw in Dallas on the way. And L.A.
VC: And I’d put up with that so I could fly cheap on the day I want?
Jay: When you say ‘the day I want,’ you mean you’d want to fly on a specific day? That might not work so well.
VC: And you expect me to give you money for this?
Jay: Wait, there’s more! We’re going to get into groceries and gasoline and mortgages…
VC: You’re going to sell unused groceries and gasoline?
Jay: No no. See, like with gas, we get a price from the oil companies, then people bid on our site for, say, 20 gallons at a certain price, then they go to the gas station and get the gas.
VC: Right. So the oil companies will sell you their gas cheaply because…
Jay: Because we guarantee them sales.
VC: Of course. Because they’re worried that consumers might suddenly decide they just don’t need gasoline anymore. Run their cars on something else, like windmills, or nuclear fuel.
Jay: Look, I’m going to get a patent on this stuff, too. So we’ll make money from anyone who wants to use our model.
VC: Yes, I imagine the line will stretch around your desk. We’ll call you.
Jay: But we’re going to get Capt. Kirk from Star Trek to sing these crazy songs…
Jeff Bezos, Amazon
VC: And what’s this great idea?
Jeff: It’s called Amazon and it sells…
VC: It’s business-to-consumer? Go away.
Jeff: No, listen. It will sell books, music, software, cars, patio furniture, vitamins, toys…
VC: Whoa, whoa, slow down there, pardner. How are you going to make money?
Jeff: By selling in volume! We’ll stock everything!
VC: I’m sorry, let me restate. How are you going to make a profit?
Jeff: Well, by… um… why, is that important?
VC: Some of us have gotten quite keen on it, yes.
Jeff: OK, we’ll just outbig everyone else. You know, Amazon=big. It sounds big. It’ll be big. Your one-stop shop for all your…
VC: …overhead expenses. Yes, thank you for coming. Next.
Jerry Yang, Yahoo!
Jerry: It’s a site where you go to find other sites. And it has lots of other stuff, like news and stock quotes. We call it a “portal.”
VC: The site is called Portal, like Portal.com?
Jerry: No no, it’s called Yahoo!
VC: You’re yelling.
Jerry: No, the site is called Yahoo! The exclamation point is part of it.
VC: But why are you calling it Yahoo! How are people going to know what it does?
Jerry: Branding! We’ll spend millions in advertising and marketing to brand that name into people’s subconscious.
VC: So people will know they can go to Yahoo! to find other sites to go to.
Jerry: Well, partly, yeah. Plus…
VC: So why don’t I just invest in these other sites?
Jerry: Well I…Oh, You’re joking. I didn’t think you venture guys told jokes.
VC: We don’t. Next.
Kevin O’Connor, DoubleClick
Kevin: We’ll provide a wide range of advertising solutions, primarily through a network of sites we’ll sell advertising on.
VC: I see, and how long will it take you to be profitable?
Kevin: Well, four years out, we should be only $15 million or so in the red.
VC: Uh-huh. And five years out?
Kevin: Probably close to that.
VC: How close?
Kevin: $90 million to $100 million in the red.
Kevin: Probably closer to 90, really.
Jim Clark, Healtheon/WebMD
Jim: We’re going to streamline the U.S. health care system!
Toby Lenk, eToys
Toby: We’ll sell toys online. The toy business is huge…
VC: Wait, it’s business-to-consumer?
VC: I have a gun, and I know how to use it.
Steve Case, AOL
Steve: We get people to sign up for, say, $20 a month, and we give them Internet access, email, plus we have exclusive content they can read.
VC: And why will they sign up with you?
Steve: Because we’ll carpet bomb the entire country with sign-up discs. When they think ‘Internet,’ they’ll think ‘AOL’.
VC: But won’t they resent you and make fun of you, pummeling them with these discs all the time?
VC: And won’t you have problems with goodwill if you sign up too many people and can’t keep up with the traffic on the network?
Steve: Your point being…?
VC: Nothing. I like this one.
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