How to get rich off dot-coms in six to eight weeks
A loyal reader-commenter, "That Chinese Broad," asks Valleywag:
I'm poking around into the weeds at the side of the road looking for a "Web 2.0" (don't—just don't) startup to get rich in, preferably in six to eight weeks. Any leads?
Good question, Broad. There are several routes to dot-com success, all following an archetypal pattern: the Dirty Rotten Scoundrel.
Stage 1: Pick a startup
- Find something carpetbagging VCs are salivating for and will pay you cash for. "Citizen Media" is hot this month, what with the $1.65 billion YouTube buyout and Sequoia Capital's $5 million investment in PopSugar. That'll put you in Content Land, a magical place where companies get millions but spend pennies on bloggers (who, thanks to a weak dollar, are cheaper than Chinese World-of-Warcraft gold farmers).
- Or for a technology bid, play with buzzwords: Ruby on Snails, Abuser-generated content, Anti-bacterial Ajax. The stupider the phrase, the more exciting the business — after all, no competitors!
Stage 2: Grab the cash
- Shop for gullible investors. Smart ones will turn you down. Venture capitalist Paul Kedrosky, for instance, answered the reader's question with "Buy a tri-state lottery ticket."
- One way to find these investors is to look at other silly startups and see who paid them millions. Which distracted investor at Y Combinator invested in Kiko despite the plethora of other, better web calendar startups?
- Or run a blog search on Technorati for the phrases of an investor who's caught the fever: "__ doesn't get it" is the best mark of a true believer, but also look for "we talk through blogs" (the notion is pretentious and the use of we shows the writer thinks Web 2.0 is a club) and "Web 3.0" (especially if your startup works on mobile phones or 3d).
Stage 3: Hit the circuit
- Stirr, SF Tech Sessions, SF New Tech, SV New Tech, SF Beta — you could not only schmooze every night of the week, you could demo your site to hundreds of young VC associates, biz-development pros, and flacks.
- Pick a persona: regular Joe who had an idea in the shower, bold innovator in the model of Google's Sergey Brin, or nerdy engineer (minus the anti-social part, unless you have a wingman to "force" you to meet investors).
- Your conversation partner is having a gin and tonic. You are having a Sprite — either discreetly order so no one knows you're the only sober one in the room, or always take your car. "Just a soda, sorry — driving."
Stage 4: Grab the cash, part 2
- This stage is a great option if you skimped on Stage 2. Bootstrapping your own company means you can find a buyer and keep the money for yourself.
- You did remember to weasel out of promising your partners and employees any money, right?
- Repeat after me: "My financial advisor advises me to decline a vesting requirement." Substitute with "attorney" or "yoga instructor" as necessary.
- No, you can't sell to Google. They may know how to buy a company like Dodgeball or Blogger and let it rot, but even a lousy purchase has to look great at first. Can you really fake it that well?
- Two words: News Corp.
- One word: Viacom.
- You can't have your funding and eat it too — it'll be damn hard to find a gullible investor and a gullible buyer, and all the paperwork will become evidence when your scam is finally uncovered.
Stage 5: Run away!
- Cook the books, open a secret account, transfer the money and book it.
- Exit strategy 1: Mexico.
- Exit strategy 2: Russia.
- Don't even think about it: New York City. They may be even more nuts over dot-coms out there, but they're all hucksters. You will be the soft guy with the money, and a mob of ravenous bloggers will sink their jaws into your larynx.
Of course, Valleywag's commenters will have their own evil ideas for netting a quick million or two. (Won't you, kids?)