Thankfully, Wall Street Doesn't Get It.
Investors still value a few hundred hours worth of webwork at millions upon millions of dollars.
23 year old Trent Corman watched breathlessly last week as his web-based company, spamit-damnit.com opened on the NASDAQ exchange at $14 a share. "I was nervous at first." admitted a now-multimillionare Trent. "I thought to myself: 'My product is an e-mail spamming program me and a few friends wrote. It took maybe 400 hours at the most to do, and a lot of the work we did at our own homes. How would Wall Street view us?"
Well, apparently. In the first few opening hours, share prices shot up to $55 a share, which valued the company at almost 70 million.
"Sheeya, right." laughed Rick Bangoo, spamit-damnit's cofounder. "We have like 110 employees, most of them we don't even need. The place could pretty much run out of a garage with me, Trent, 3 sales people, 2 webgeeks and a couple of techies. The only reason we're renting a building and have so many employee's is 'cause our Venture Capital coach demanded we lose millions of dollars before we tried to go public. I value us at about $150,000, tops. Most of this stupid program came from a project I did in college before I dropped out."
Silicon Valley's Success Formula:
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"We spam people, wooo. That's worth a lot of money." added Trent, still
puzzled why his company shot through the roof. "All I can say is: "Thank God we're in Silicon Valley, that our company ends in .com, and that investors are still clueless about valuations on companies."
"You know what's frustrating? added Rick. "Trent and I did a 5 year
business plan that would of had us making $110,000 each by 2001, if we'd
stuck with our "The product works, let's push it out and keep expenditures
down." approach. But since we're ".com!" we can lose millions and not even
have to worry about it. Good thing Trent and I aren't trying to open a restaurant or some other "honest" business. We lost 9 million in the first half of '99 alone!"
Jeremy Branson, of iesolutions.com, a web-based solutions company hoping to go public soon, hopes the naive philanthropy of investors will continue well into the third quarter of 2000, which is when he hopes to go public. "We raised expenditures through the roof by hiring over-priced staff and showering them with perks while bringing in almost no revenue. I think we can lose 14 million by 2002 with no problem."
Like they say: Only in Silicon Valley! (and some parts of Washington State)