Myron Rosmarin's big idea hit him as he sped down a California freeway. "As I was driving past Butterfield & Butterfield, I noticed that the company's sign read, 'Auctioneers and Appraisers,' " recalls the 38-year-old software marketer. It was a moment of entrepreneurial epiphany. "The firm's online sites did the auction part, but I realized that the appraiser part was missing. So I thought to myself, 'What if someone tracked the online auctions and used the information to help buyers and sellers figure out how much their stuff is worth?' "
His inspiration cast a glimmer of hope on an otherwise gloomy outlook. Five years earlier, in 1994, Rosmarin had moved to Silicon Valley from New York and was already onto his third startup job. And, just like the two other early-stage companies that he'd gone to work for, the prospects for this latest one were questionable. A mediocre salary and still-worthless stock options had put his modest dream of buying a house in a decent school district (he has two young children) on what felt like permanent hold. With Valley real-estate prices surging, his family had begun pressuring him to move back east. "It's a bipolar way to live," Rosmarin says. "Either you make it big, or you can't afford a decent life here."
Unwilling to pack his bags just yet, he decided to try a new job -- one at a more established company where a stock-option payout, though small, was at least a possibility. So, in March 1999, he logged onto an online job site and found a listing on Yahoo! for a senior producer for the Internet portal's new online-auction business. A longtime collector of fountain pens, Rosmarin had become fascinated with online auctions while trading on eBay, the web's biggest such site. "It sounded pretty cool," Rosmarin says of the job listing. "Yahoo! is a great company, and I was really interested in online auctions. So I figured, 'Why not?'"
As he readied himself for an interview, he began brainstorming about how he would answer the inevitable questions: "How would you add value to our company?" That's when he passed by the Butterfield & Butterfield building -- and his mind began to race. His idea for online appraisals would surely give Yahoo! a leg up in the online-auction market. And, as the creative mind behind it, he would have an easy time convincing his interviewers that he could make a difference for the company. But as he spun the idea out further in his head, he began to wonder whether his value proposition for Yahoo! might not be better leveraged to fatten his own bank account. If the idea was so great, he thought to himself, why waste it on securing a rank-and-file job? Why not instead start his own online-appraisal company?
Rosmarin's quandary was hardly unique. With the media awash in stories of everyday people who have turned smart -- and sometimes not-so-smart -- ideas into overnight fortunes, the notion of ditching a secure job to start your own company has never seemed more appealing -- or more plausible. The price of entry into the games is preposterously paltry: Plunk down a couple hundred dollars for an Internet domain name and some e-business-in-a-box software, and you too can establish and online brand. And with venture-capital funds ballooning into the billions, and flocks of angel investors opening their wallets for even the most obtuse dotcom brainchild, bankrolling at leas the early stages of an Internet startup these days isn't much tougher than securing a home loan.
Yet founding a startup remains one of the riskiest bets that you can make on the Internet roulette wheel. The same fallen barriers to entry that let you in can also open the door to anyone who cares to compete with you. And with practically every entrepreneur and corporate chieftain in America rushing to stake an Internet claim, the sudden crush of competition has squeezed profit margins to next to nil, while quickly raising the odds against even the most conservative business plans. Add to that the administrative hurdles of getting any new business off of the ground, and it's easy to see why even the most bullish Internet analysts foresee a major shakeout down the road.
The long odds, however, haven't stopped people like Rosmarin, who had fantasized about starting his own business long before the Internet's siren song finally wooed him into following through with his dream. With his best friend and college roommate, Scott Landress, Rosmarin had sat up nights brainstorming his way through a series of ideas -- everything from founding a real-estate-development company to creating a business that would recycle used computers. "But it was all pretty much daydreaming," says Rosmarin. "We were never in a position to do something with any of our ideas."
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