Burn Rate
How I Survived the Gold Rush Years on the Internet

Read Patrick Lambert's Online Original Review
Read Amy Cortese's Review

CHAPTER ONE

A Diamond As Big As the Ritz (August 1996)

I am a reluctant participant in a conference of CEOs of information and technology companies being held at the Ritz in Laguna Beach, one of the poshest in the Ritz chain. I'm embarrassed by my hunger for affection and approval, preferably in the form of another round of financing for my company. Powerful forces are represented here -- principals of venture capital funds and managers of corporate strategic investment pools; these are ordinary men and women with extraordinary powers, who, if they so desired, could let me sleep through the night.

But who am I to be singled out? Most of my fellow CEOs at the conference are up all night too, disturbed not just by earnings that are down or market issues that need to be addressed but by a countdown, measured in weeks, of how much cash they have left. We are the leaders of an industry without income.

Some of the entrepreneurs here, though in similar extremis, hold themselves with striking poise and equanimity, while others buttonhole the venture capitalists, demanding their attention and delivering, in the verdant Ritz hallways, heated sales pitches. In the end, who will be left standing -- the hot and bothered or the cool?

It seems like high school all over again. The VCs are upperclassmen, study hall proctors, varsity athletes. A casual word or familiar gesture from any one of them can confer status, meaning, value. To be ignored is to not exist. The stakes are as high as they were in high school: existence itself.

Attendance at this particular conference has already conferred status. In the technology industry you could (and people do) attend conferences on a weekly basis, but this one has a track record of deals lined up, of good action in the halls, of hot faces in the crowd.

It was not my idea to come to the conference. I would have preferred to stay home, reticently, or modestly, or insecurely, but the lead investor in our company, a young man with large cyber ambitions, thought we both should make an appearance. "This is where we can make something happen," he theorized. "It's all in the halls. We'll just stand in the halls. I'll introduce you to who I know. You'll introduce me to who you know. It'll be very cool. You'll be great."

But the day before our departure, he bailed: "We'll go to the next one together."

I am grateful to be here on my own.

What fuels the emotions of these conferences, and this industry, is change. What is taken for granted today will be a joke tomorrow. All technology, as they say, is transitional. This rate of turnover, of obsolescence, makes it possible for people with heart and imagination, but without capital or experience, to make themselves into moguls within months instead of over the span of a career. All it takes is "the nod," the gesture (in the form of a minority investment) that acknowledges the prescience, the genius, or just the cleverness of the new kid on the block.

I am painfully aware that my lovely, wonderful company, which publishes some of the coolest guides to the Net and maintains one of the most lavish sites on the Web and has grown from four to seventy people in little more than two years, has seven weeks before it will crash and burn without new investment. So much depends on my ability to now attract the attention of one of these Big Men On Campus: not only next month's payroll but growth, expansion, dominance, and my chance to walk away with enough wealth to support generations to come. (This is not a long term plan, but one meant to be accomplished, ideally, by next year's meeting at the Ritz.)

The desperation in the air here is perfectly complemented by the thrill of seeing several faces desperate at this time last year (some who a year ago did not have dreams large enough to make them desperate) now elevated, esteemed, and valued.