Welcome to Internet casino night! Play your cards right, and you could win the big IPO payout! But watch closely, and pay strict attention to how the cards fall, how the dice tumble, and how the wheel turns: Not every hand is a lucky one, sometimes you crap out, and your number may not come up this time around.
These days, it's easy to get the impression that everyone who either launches a dotcom or signs on to work at one has been issued the new economy's version of a winning lottery ticket, redeemable upon demand for a small fortune. It's a seductive image, exactly the kind of can't-miss marketing that brings a steady stream of players to the lounges of Las Vegas -- and to the office parks of Silicon Valley, where the odds at the Internet casino are no better than those at Caesar's Palace. But there are techniques and tactics that can improve your odds. And the more time that you spend learning about the different kinds of bets that are placed in this casino economy, the better your odds of figuring out a winning strategy.
Take, for example, the shrewd, hard-working players whom you'll meet at the casino tonight. Anna Zornosa came to the tables after learning the game from the outside, as one of the brightest high-tech journalists in the business. But her first and second bids to hit the IPO payout came up empty. It wasn't until she learned to play the odds more carefully and switched to a lower-risk, admittedly lower-reward game that she finally came away with a winning number.
Or learn from Matt Rothman. Early on, Rothman saw that by taking a job at just one company, he'd be betting all of his chips on one number. So instead of doing that, he spread out his bets by taking a handful of consulting jobs with different startups. That way, he can still win a million-dollar payoff -- but he can also go kayaking whenever he wants.
Myron Rosmarin and Scott Landress decided to go for broke. Sure, they could have gone the regular route with their dotcom idea -- negotiating with venture capitalists for funding and nursing the idea to a second round of financing, all the while aiming for the day when they could file for their IPO. But they saw a faster shot at a higher reward: They'd risk everything on one throw of the dice, betting that they could negotiate a partnership with the one player in their space who could make their idea take off. One roll of the dice, winner take all.
And then there's Jim Butterworth, an experienced entrepreneur and a seasoned businessman who decided that he'd never again suffer the kind of anguish that came with VCs who didn't keep their promises -- and the failed startup that he was left with as a result. The best way to beat the house, Butterworth figured, was to become the house. And so this time around, he's opened his own Internet incubator, where other players bring their best bets -- and where he gets a piece of the action.
No matter how you choose to play the game, you would be wise to let these experienced pros teach you a few key lessons: The odds will always be against you, and more people will lose big than will win big. Like the people you're about to meet, know your strengths, and play to them. Do whatever you can to improve your chances, and always remember: If you can't afford to lose, then don't play.
"Could you pick a worse day to IPO?" That's what Anna Zornosa remembers the CNBC announcer saying as the market quickly dropped to more than 200 points lower than where it had closed the day before.
It was October 15, 1999. The stock market was tanking, and Zornosa, 41, was undergoing a major attitude adjustment. The senior vice president at Women.com had gone to bed early the night before, knowing -- knowing! -- that the next day would be the big one. After 4 years and 3 Internet startup jobs, the former technology journalist figured that she'd finally picked a winner in the fledgling women's content provider. She had joined up a mere 9 months before the initial public offering, signing an employment contract that would give her a respectable 135,000 stock options (with a 4-year vesting period) in the soon-to-be-public company. If all went well with that day's $10-a-share offering, she would finally join the ranks of Silicon Valley's millionaires.
Little wonder that she was wide awake long before her alarm clock went off at 6 AM. Too excited to fall back to sleep, she wandered into the kitchen and turned on the TV. "They were talking about how Alan Greenspan had warned investors about underestimating the stock market's risk," she recalls of the CNBC broadcast. "It was all drama and doom, which I didn't really take seriously until the market opened. Then I realized that they hadn't been so dramatic after all -- that it was, in fact, a very bad day."
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