One of these computer-fixer-upper people (technician? Information Technology specialist? What the hell do you call these people?) is EXTREMELY religious. He is a Christian fanatic.

One time my printer wasn’t working. He fixed it. I said, “Hey, thanks a lot.”

“Oh, don’t thank me. Thank our Lord and Savior Jesus Christ.”

I can be smart-ass when it comes to this kind of stuff, so I replied, “Well, unless you happen to be Jesus, I’d rather thank you.”

“But God gave me all these skills. I wouldn’t have been able to fix your computer without Jesus’ blessing.”

“Do you think there are atheists in this world who read the same computer manual you did?”

My point is this; there’s a time and place for everything. My alter ego likes to think he’s an extremely spiritual person. He meditates, he’s attuned to Reiki Level II, he’s a certified hypnotist, a vegetarian, and he can give a 4-hour lecture on Karma and Reincarnation, among other topics, without notes.

And although he actually agrees with the Goddess-invoking Linda, he still twists his head a bit when he hears her spiritual quotes.

Frank: We can grab a few armfuls of this lush grass here by the water and use it to wipe our ass.
Linda: It’s a wonderful example of the cycle of life and how we must love and appreciate all that the Earth brings to us: The Goddess provides us with this beautiful foliage and we, in turn, bless the Earth with our sacred ass remnants.

One common failure mode of startups is to think that the innovation itself is the magic pass to success. Wrong. Internet innovation is perpetual.

Create benefits, not barriers
Even in the face of great resistance from the incumbent music industry, MP3 technology has succeeded largely because there are no barriers to its usage. The new environment on the Internet dictates that new services that provide benefits will flourish, while services that deploy barriers will die.

Venture capitalists, in turn, are not interested in competitive barriers – proprietary technology, patents on some new algorithm. They’re interested in customer benefits. Historically, startups looked at patents to protect their marketplace, but on the Internet, people evade such barriers by simply deciding not to buy. Do the math: You’d rather have 5 million customers paying you $1 for your value than 50,000 paying $100. If they both wind up being worth $5 million in revenue, the former is worth far more than the latter, because you can do a lot more with 5 million customers than just 50,000.

Once you realize that your great tool of innovation revolves around creating benefits, then you will be geared constantly toward expanding a better value proposition for the customers.

Capital control
Capital was once a scarce resource in the startup market; and you ran a startup to conserve capital. In the Internet era, capital becomes a tool of innovation for startups, not a throttle. On the Net, you run a startup to efficiently spend, not conserve, capital. That means raising and using it wisely. One failure mode for startups is to raise too much capital (see “Let the Hard Times Roll,” p98) and blow your equity before you’ve gotten the business off the ground.

Capital and innovation work hand in hand in the mechanics of Internet startups. Product cycles are timed to keep the capital engines running. The ideal model for Internet startups is basically stitched to this idea – every four months, you release a product, so you can leverage that to raise the next round of capital. You want to raise just the right amount of capital in each stage. Internet startups become a capital treadmill; you run your business so you hit fundraising milestones to attract the next round of capital to live to fight another day.

Pre-Internet startups, for the most part, were about technological innovation – from software to hardware and everything in between. Post-Internet startups are much more about the application rather than the simple creation of technology. They’re about business-model innovation rather than product innovation, and the most important ones wind up changing the rules for an industry at large. Amazon.com, for example, is not a bookseller, although it may have looked like one at first. Through endless partnerships, acquisitions, and constant expansion, it has innovated itself into a new type of retailer. Why? Because it had to. Can you name any one of the dozens of Internet booksellers that were in business before Jeff Bezos made his first sale? You probably can’t, because they didn’t aim to be anything other than small digital bookstores. They failed to innovate, and they disappeared.

The only defense of startups then, is to surprise others before they surprise you. Dell didn’t just pocket the windfall profits precipitated by its build-to-order and customer-direct innovations, but rather initiated the downward spiral of price-slashing in a preemptive kill-or-be-killed race to rule the industry. The upshot? Former industry leader Compaq has been plunged into disarray, including a summary dismissal of the CEO and revolt of its resellers. Dell, meanwhile, is reaching new heights.

If you can, you must
Failure of a company is so often the failure to embrace the obvious. A simple example: Your accounting people tell you that you have the market leverage to lower your prices by five percent and still compete. Before the Web came along, you might hold off on lowering prices and pocket the profit.

But today, where everything is a click away, by the time you even think of it, your competitor has already dropped its prices. You’re behind. On the Internet, you’re out of cushion. If you can – innovate, drop prices, launch a new service, speed delivery – you simply must. If there is a better business model to pursue, a better value proposition, you simply must do it.

Once upon a time, businesses labored to nurture and develop marketplaces. Startups would try to control the demand of the product. On the Web, releasing a product triggers overnight demand. If you’re lucky, you wind up with what venture capitalists call the “AOL problem” – your customers are pissed off at you because they can’t get enough of your product.

In each case, teams of people pulled victory from the jaws of defeat. Excite went from being a search engine, to selling software, back to being a search engine, then teamed with AOL to get a capital infusion, then pulled back from AOL to create a stand-alone business, then wound up being acquired by At Home for $6.7 billion. It navigated a dizzying array of business models that only the best teams of people could figure out a way to lead it to greener pastures.

If you have the best people, you’ll have the best odds at achieving the next goal of your startup – fostering the vast pool of customers who will carry your business aloft. That great team of employees you worked hard to assemble will no doubt create and foster success, but that success will only be measured by the number of customers and partners you have.

You’re looking for quality and breadth at the same time: A-league talent in each critical position. Most startup upstarts tend to think they can fill all those shoes as fast as they got funding. Wrong. Slow down. The lead time in getting A-league people can be six months or longer, and the moment you understand that you need it, it’s six months until you’ll get it.

Spend those precious weeks and months finding the right talent for all of those critical employee roles. In the long run, good people will breed more and better employees, more and better customers, more and better partners.

Case in point: What is making little Net-IPO maverick Wit Capital Group into a force to be reckoned with on Wall Street? It has become a people magnet. Since Robert Lessin joined Wit as chairman and co-CEO from Salomon Smith Barney in April 1998, more than a half-dozen other key people have followed – from Smith Barney, Charles Schwab, and Merrill Lynch.

2. Innovation
Dare to be different – not digital

A common trap that many entrepreneurs fall into is to merely put a new digital storefront on an old-world business and expect it to become the next eBay. A prerequisite of success on the Internet is that if you’re going to run a business digitally, you better be doing it differently. In the PC market, Dell Computer has prevailed in online sales while Compaq and its global enterprise has languished. Why? Not just because Dell has a digital storefront, but rather because it innovated a different online sales service first, with build-to-order configuration and direct-to-customer sales. Following the lead is pcOrder.com.

After all the market-cap comparison, strategy debates, patent filings, and the news media’s breathless coverage of seemingly every dot-com IPO, the success of Internet startups comes down to the ultimate Darwinian business differentiator: people. Yes, size matters – along with funding, a catchy name, great advertising, capital, technology, structure, partnerships. But people matter most.

People matter for two reasons. First, they are the only unique differentiators among businesses today: The pervasiveness of digital technology has marginalized seemingly everything except original thought and human intuition. Second, people breed. And, like DNA, they breed in kind: A-league begets more A-league, and so goes the virtuous cycle.

Zoom back to 1995, and look at two disparate companies – $80 billion media juggernaut Time Warner and a seat-of-the-pants Website called Yahoo! run by Stanford University students Jerry Yang and David Filo. At the time, what was in the way of Time Warner launching the newest, biggest, hottest company in the new media, the Internet? Time Warner’s Pathfinder site had more money, proprietary content, and global distribution of its parent company. So how is it that Yahoo! has emerged today as a $30 billion company and Time Warner has been a failure at trying to compete on the Net? (See “Fall Guys,” p94.) How is it that Amazon.com, valued at $21 billion, has not yet earned a dollar in profit, yet enjoys such a huge market advantage over the biggest bookseller in the world, Barnes & Noble?

Take a more recent look at Yahoo! and Infoseek. Why does Yahoo! now dominate a similarly developed Internet portal? Yahoo! didn’t have better technology than Infoseek, didn’t spend its money wiser, didn’t have significantly lower operating costs, didn’t have a magic patent or access to vastly greater sums of capital than its competitor. So why has Yahoo! dominated? Simple. The most successful Internet startups are a great barometer of who has the best people.

Find great people
Therein lies the ultimate mission of all startups: Get good people. Three kinds: employees, partners, and customers.

Employees create and implement the value proposition of the business; they are the keystone of any new venture. Partners broaden both your reach and value proposition. And customers, of course, are the ultimate arbiters of a business’ fate. Where revenues were once the leading metric of business growth, customer volume has become the best barometer and strategic objective of operational success today.

Prior to the Internet, when capital was a constraint, the goal of startups was to slowly nurture a market while conserving capital. The goal of today’s startup – the Net startup – is to get as many customers as quickly as you can by deploying as much capital as it takes to get there.

Find the best people: It sounds annoyingly obvious, yet so many entrepreneurs overlook the impact of this basic premise. A good first litmus test for any entrepreneur is to ask, Am I attracting other people to work with me? If the answer is yes, everything else is secondary. Drugstore.com spent most of its time and energy in 1998 not building out its Website but simply recruiting the right people – surrendering even the coveted “first mover” advantage to assemble a great team.

More Tips on Being Bad

Suddenly she jumped up and ran off returning a few minutes later carrying handfuls of Gardenia blossoms. She handed some to me, insisting that I smell their incredible perfume. “They’re my favorite,” she kept repeating as she wrapped a bunch around the string of her bikini top between her breasts. Not to be outdone I stuffed some of the blossoms in the v-neck of my tee shirt.

“Smell!!” Bad Amy demanded of the next man who came by on his way to the bar. He obligingly lowered his head to her chest.

Two drinks past thinking I jumped up and stuck out my own meager chest. “Me too!” I cried,and while I admit the poor man got a very strange look on his face, he did sniff my gardenias. I’m pretty sure I blushed.

The new man’s name was Mike and he seemed more my age than Amy’s. He chatted with us while he ordered his drinks, including a shot for each of us as payment of his “rent” on the space at the bar. Bad Amy and I chugged half a shot each, and like the ladies we were, shared the rest with our new benefactor.

The band was playing old songs, some soul, some disco, all dance music. The crowd-pleasing, “When a Man Loves a Woman”, came on and half the people in the bar were sing-shouting along. As far as I could tell we sounded great. Feeling younger by the minute, I asked Mike to dance. To my surprise, he said yes and we headed to the dance floor.

By the time I got back to my seat Amy had decided that she’d been there long enough. She was on the phone to someone she called her big brother,Dave. He’d come and get her she said, and I hope he did. Mike and I left for another dance I didn’t see her again.

With Bad Amy as my role model and irresistible dance music playing continuously, Mike and I danced and sweated and drank and got to know each other until the band shut down.

Some time after midnight I did the ultimate bad thing and took him home with me. I wish Amy could have seen that. She would have proud.

Saturday night was the last night of my vacation at St. Pete’s Beach.

A vacation spent alone months after the man I loved succumbed to a mid-life crisis and broke my heart. A dream vacation that consisted of ten days spent half in tears and half in determined hyper-activity. But on this last night I stuck five dollars in my pocket and made myself walk across the street to watch the sunset. After that, ready or not, I was going to walk into one of the beach bars and get a drink. Alone.

I walked down the beach picking up shells and watching the sky turn from blue to pink to orange. I turned my back on the couples cuddled together on the lounges that lined the water and concentrated on the children jumping in the waves. When the sun disappeared and the sherbet sky faded to an ordinary gray, I looked up and found that I had walked all the way down the beach to the Best Western. If I was going to get a drink here, I had a choice between the Swigwam and Jimmy B’s.

I squared my shoulders for courage and headed up to Jimmy’s, where I spent my five dollars on a vodka cranberry and took up residence on a barstool in the corner. Uncomfortable, I promised myself I could go back to my room as soon as I finished my drink.

The owner of the barstool next to me turned out to be a pretty brunette in her twenties, who’d obviously been there awhile. She didn’t hesitate to introduce herself.

“Hi. I’m Amy.” She took a drag on her cigarette and politely exhaled in the other direction before she finished her introduction with, “I’m a bad girl.” She grinned at me and stuck out her hand like we were going to be buddies. What could I do but shake? I studied the tattoo that crawled down her right shoulder all the way to her elbow as she dug around in her purse for drink money. She came up short.

“Never mind”, she said. “We can get guys to buy us drinks.” I laughed for the first time in a long time. Obviously she hadn’t taken a very good look at me!

“I’ll be right back” she said and off she went. She had another big tattoo that covered most of her back and disappeared under her shorts. I watched while Bad Amy linked herself to a gentleman half way down the bar and started whispering in his ear. To my surprise a second vodka cranberry soon appeared in front of me and Amy was back a minute later.

“See?” she shrugged, “It’s easy.”

Well maybe for her. I never was much of a ‘bad’ girl, even when I was her age. More of a girl-next-door type. Maybe even a goody-two-shoes. But the way my life was going, I figured a change couldn’t hurt. What the hell, I thought. Give it a shot.

About the size of a typical audio speaker that attaches to your PC, it wires into your serial port, and broadcasts any scent for which it receives a code.
DigiScents scent coding, called ScentStream, presents none of the bandwidth problems of streaming audio or video on garden-variety dialups; the largest scent code in Bellenson and Smith’s database is less than 2K.

As easily as you can click today on an MP3 file and listen to it through your speakers, Bellenson and Smith hope sniff-happy Net surfers will download “streaming scent” and play it back on an iSmell. On the Web, that means you’ll soon be able to click-and-sniff a few cologne samples before clicking on the order button. Or drop into an online cooking show and — pretty literally — smell what’s for dinner. Or maybe you can’t resist clicking on a Lexus banner to get a lungful of those leather seats. The latest synthesizer, set to debut in the spring, is proudly equipped to deliver trillions of combinations of human-detectable aromas.

But don’t yet dismiss all this as tech gimmickry, even though the brief history of multimedia is littered with that — remember 3DO? This new venture is now a 25-employee, Oakland-based company called DigiScents, with Bellenson and Smith at the helm. Launched with $250,000 in seed money of their own back in February (under the umbrella of their venture “catalyst” firm, Libra Digital), DigiScents is running on more than $10 million in private financing, and parlaying an ambitious business plan that spans Madison Avenue to Hollywood.
The Silicon Valley firm once had grandiose visions of creating the industry standard for superrealistic video game technology, but ultimately bombed. 3DO eventually sold the rights to its cutting-edge 64-bit player to Matsushita Electric for $100 million and moved into developing online games.

In short, DigiScents plans to be the platform builder to make scents, smells, aromas, and odors as invaluable sensory components of new media in this new century as sound and images proved to be to old media in the last. How? By licensing their technology across the digital spectrum — including scent-enhanced online product selection (think flowers, fragrances, cosmetics, food, and wine); scented email and online greeting cards; “scent-tracked” advertising, music and music videos, games, television, and movies; and perhaps a whole new entertainment-biz market built around expert “scentographers.”

By the end of next year, it hopes to have sold 500,000 iSmells, each priced less than $200, Smith says, bundled with PCs and for sale in retail stores, or available through DigiScents’ own viral marketing effort, a community-building “snortal.” (They’ve trademarked that, too.) While DigiScents will license large-scale production of the device, it will produce and market the iSmell’s critical ingredient — a complex scent cartridge, analogous to a print cartridge — on its own.

Macromedia founder Marc Canter, whose new San Francisco-based company, Broadband Mechanics, develops demos to help seed the gaming, advertising, and ecommerce markets, can already smell the money. “Imagine you’re watching TV and can smell McDonald’s french fries. You’ll want to buy some. This [technology] isn’t just about attaching to a home computer to play Dungeons & Dragons. Don’t laugh. This is serious.”

Little more than a year ago, Richard Lloyd Howardson and John Smith were chaise-lounging on a Miami beach, happily and technically unemployed, only thinking about as far ahead as the next round of mai tais and the edge of their beach towels.

For seven years, the two former college buddies from Stanford University — Bellenson, the intrepid molecular biologist; Smith, the wunderkind entrepreneur — worked almost nonstop in molding their own biotech firm, Pangea Systems, into a leader in the budding field of bioinformatics. They built databases that pharmaceutical firms used to create drugs targeted at specific genes. Several products that Bellenson and Smith developed — LifeSeq, GeneWorld, and GeneThesaurus, which mines huge public genetic databases — quickly became industry standards. And, by 1995, Smith and Bellenson had, at 31 and 34, molded themselves into multimillionaires.
The science of developing computer databases and algorithms to speed up and enhance biological research. It is being used most notoriously in The Human Genome Project.

Flush with cash, weary of the biotech grind, this two-headed brainchild decided to retire from Pangea and, says Bellenson, “do what my dad had been bugging me about, which is to take a little time and smell the flowers.” Literally.

Chalk it up to youthful appetites, deprived libidos, maybe just a father’s intuition. But whatever Dex and Joel, as friends know them, collectively smelled, whiffed, or inhaled down in South Beach last year manifested itself as nothing short of epiphany. Which maybe should not have come as a surprise, since wide-eyed ambition and kid-like charm describe both well. “We were cruising around and talking about stuff,” says the disarmingly hyper Bellenson at a cafe near his downtown Oakland, Calif., high-rise apartment.

“There are just tons of fragrance shops in South Beach, the women are looking good and smelling good. There’s food everywhere. There’s the water. Suntan lotion. It’s a very rich sensory environment. So here we were, smelling smelling smelling, and I started to think, This is big business! Why can’t they figure out how to custom-make this stuff?”

Before they landed back home in California, Bellenson and Smith were mapping out a wild new business plan, all riding on one big hunch: Just as the LifeSeq software could construct complex genetic “fingerprints” of complex organ tissues, they believed one could do the same for the molecular structure of different odors. “It’s obviously biochemistry,” Bellenson told Smith. “We should be able to make a fingerprint for an odor!”

Also, the incredible detail in the carvings on the centerpiece Tree of Life is actually indescribable. The carvings, which make up this entire man-made tree, are of a wide variety of animals. One amazing thing is that you’ll discover different animals each time you look at the tree depending on the light and angle from which you view it.

At the Magic Kingdom park, the beauty of the flowers and topiary, and the detail on the Main Street thoroughfare are too beautiful for words. One of my favorite photos from our trip is taken in front of a living-floral recreation of Mickey Mouse’s smiling face. This display is one of the first things you see as you approach the entrance to the Magic Kingdom. But everywhere in the park, you’ll see beautifully landscaped areas and flowerbeds overflowing with bright colorful blossoms.

My personal favorite experience during our first visit was attending a character lunch at the Hollywood & Vine restaurant at Disney-MGM Studios. Character meals are where you have a chance to get autographs, photograph and meet life-size Disney characters. During our lunch, we were delighted to have Chip, Dale and (our personal favorite) Goofy stop by our table for photos and hugs. And, hostess Minnie was standing by the front door throughout the meal to greet everyone and pose for photos.

Maybe this isn’t for everyone. But if you get in the spirit and enjoy the Disney characters, it’s a delightful experience. Plus, those photos are great souvenirs and a huge hit with family and friends at home – everyone seems to get a chuckle out of seeing their friends being hugged by a life-sized Disney character.

If character dining isn’t your choice, there are numerous restaurants throughout WDW where you can enjoy varied cuisine in an atmosphere to please every style and taste. For example, Victoria & Albert’s restaurant at the Grand Floridian Hotel is an exquisite dining experience in lavish surroundings to rival grand restaurants anywhere; or, you can sample freshly-brewed beer and ale while dining on traditional cuisine at the Big River Grille on Disney’s Boardwalk.

A few things that we didn’t have time to explore and experience await us for our future trips. They include the variety of recreation and sports activities – the pools and hot tubs, golf, sailing, fishing, tennis – even parasailing. The only problem is finding the time to do all the things we’d like to do.

Finally, I might need a separate trip just to explore the entire section of WDW dedicated to shopping and entertainment. I can’t wait to check out Downtown Disney and Pleasure Island. I can hear shops like The Art of Disney, Disney’s Days of Christmas, and The Gourmet Pantry, calling my name. While thoughts of the House of Blues, Cirque du Soleil and the Adventurer’s Club already have me anxious to sample the nightlife. This all sounds like an adult theme park to me – shopping, dining, shows, nightclubs!

Do I sound like I’m hooked? I sure am. I can’t wait to go back to Walt Disney World and let my inner child run wild again.