Introduction

The basic thesis of this book is very simple and old-fashioned: that the best indeed, the only way to make money on the Internet is to take in more than you spend.

For some reason, between the time the Internet first opened up to commercial activity in 1994 and the end of the 20th century, thousands of so-called visionaries decided this hoary business rule didn't apply online. An awful lot of supposedly hard-headed investors and entrepreneurs bought into this delusion and paid dearly for their insanity. Billions of dollars were poured into dubious schemes. Sound management practices were ignored. Money was thrown around as if there was an endless stream of it cascading down, like rain in a thunderstorm, on Silicon Valley, Silicon Alley, Silicon Prairie, Silicon Harbor, Silicon Swamp, Silicon Coast, Silicon Whatever. All over the world, city fathers and mothers decided that getting "Silicon" into a place name guaranteed endless investments and high-paying jobs; that everyone touched by the Internet was going to be so rich that they wouldn't notice a few dollars one way or the other if bonds were floated and taxes were raised to pay for the infrastructure needed to turn this place or that place into an Internet Mecca full of high-rent lofts and offices all tied together by millions of strands of fiberoptic cable.

Even at the height of this madness a few of us wondered how long the investor-driven money shower would last, and prepared for the day when, inevitably, it would end. We were laughed at for our conservative business plans and cost-cutting even stingy management methods, but we are the ones who still have Internet jobs and businesses and will probably have them for the rest of our working lives, while the high-rollers who thought we were silly a few years ago are now sending us their resumes.