But in the dot-com boom, unless you could show that you'd make billions back (literally, billions) with that same $5 million (or less), you weren't even worth considering. The thing is, very few companies are going to make it to the billion-dollar club in two years on a $5 million investment. Certainly not Pets.com, Swoon.com, MotherNature.com, Furniture.com, Eve.com, Living.com, Boo.com, or Value America.

There was a chance that there'd be another Netscape. Just a chance. When there's a chance to turn yourself into a billionaire, and you can actually make yourself and all your friends believe it, you're going to try. For heaven's sake, it's a billion big ones, man!

But it didn't add up. I think, honestly, that many of these sorry investors really knew, deep down in their hearts, that it didn't add up. But they wanted that really huge brass ring so damned bad that they didn't listen to that little voice in their heads that said, "Hey, are you a moron, or what?"

We even felt it here at ZATZ. There's never been a question in my mind that a magazine publishing company could succeed online. There's never been a question that we could become a nice $50 million company. But when our investment advisors told us we'd never see funding unless we could show we'd be worth a billion (why do I keep hearing Austin Powers' Doctor Evil saying "ONE BILLION DOLLARS?"), we tried to figure out how that'd be possible.

I never could get my arms around that one. First, of course, we committed the cardinal sin of Internet companies: we were (and are) profitable. We started with money from our own pockets. We pay rent, payroll, etc. out of the money we make, and we're always sure to spend less than we make. This was horrifying to the dot-com investors.

Remember back just a year, when the main strategy for the dot-coms was GBF (Get Big Fast)? It didn't matter if you ever sold anything at all, just get big. Keep spending, because as long as you keep adding eyeballs, you'll keep getting a flow of investment money. It didn't matter that you couldn't support yourself for a single day on your own power, it didn't matter that you hired people you could never pay on your own, and it didn't matter that you'd buy goods and services you couldn't afford unless the investment cash kept streaming in. GBF.

Until the day that the investment money stopped coming in.

Oops.

See, in a real company, if you get a slowdown in business, you slow down your spending or adjust your investment. You've still got some kind of income stream. But many of these fabulous dot-coms had no income stream. Except, of course, for eToys, which had an income stream of a few hundred million dollars and was still too stupid to be able to figure out how to keep the doors open.

Some days, it seemed like everyone was drinking the Kool-Aid.

We, like Palm, sell stuff. Granted, our primary business is selling ads on an Internet site. But we didn't spend any more than we made, and we hadn't accepted any investment capital, so nothing dried up. And we sell ads to real companies that make real products, rather than to other dot-coms trying to increase their own traffic. Palm, likewise, makes real products.