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Incubating E-commerce billionaires

What happens when kids with ideas meet guys with money? Some of the savviest investors around are gambling that the combination will produce the next generation of Internet fortunes.

By Sean Silcoff | March 20, 2000

Meet Len Kofman and Tao Chen, ages 21 and 20, respectively. They’ve both been computer programmers since they were 10, and are part-time third-year students at the University of Toronto. After working in summer jobs at the Royal Bank in their teens, the two friends realized they didn’t like corporate culture very much. So they decided to launch their own company. First they tried software development. Then, last summer, Kofman came up with an idea for an Internet venture. Why not charge lawyers, doctors and dentists to book their appointments for them online? After two weeks of talking to professionals who didn’t see the point, they decided the idea was a nonstarter.

That’s OK, because Kofman had another scheme: he and Chen would go into the business of generating and selling great ideas. They would call themselves intelligence brokers. That plan died after one week of market research. "Unfortunately," says Kofman," we found out ideas aren’t worth that much."

Not so fast. In late September, Kofman reached again, remembering how a lawyer once charged the pair $150 for a full 30-minute consultation, even though they needed only five minutes of his time. Why, Kofman thought, shouldn’t you be able to buy only as much time as you need from professionals? If they could convince enough people with quick questions and enough experts with quick answers to do business through a common Web site, Kofman and Chen just might have a great company on their hands.

With that, the two entrepreneurs gave birth to their latest venture: Timeismoney.com. And almost at once, they struck gold, selling 49% of their barely fertilized business to Toronto-based NRG Group Inc., one of a rapidly growing number of Canadian firms that have recently launched Internet "incubators." In exchange, NRG gave Kofman and Chen up to $250,000 to play with, space to run their business, the attention of several NRG experts–and six months to prove their start-up concept could fly. If it does, they’ll be on track to raise millions in their next round of financing. Then, like so many tech companies of late, Timeismoney.com could go public or be sold to a big-league tech firm for hundreds of millions–or billions–of dollars, making them rich and turning NRG’s investment into a veritable fortune. And if that doesn’t happen? Then surely Kofman’s next idea can’t be far behind.

What is wrong with this picture? A) A half-share of a dubious idea that wouldn’t have qualified for a $10,000 bank loan three years ago is now worth a quarter of a million dollars, and possibly much more; and B) There’s plenty more where that money came from. After merging in February with 2FundEcom Inc., an Internet venture fund founded last fall by three former investment bankers, NRG Group now has assets of $40 million–money that is earmarked for young ventures just like Timeismoney.com.

If that sounds like a lot of dough to be investing in speculative Net ventures, read on. NRG is headed by a team of four self-styled visionaries–Richard Ford, Vicki Saunders, Matt Saunders and John Rae-Grant–who talk as much about changing the world as building the next Yahoo! Their incubator model is unique both in style and in the fact that it caters chiefly to very young entrepreneurs. But in every other way, the scenes playing out at NRG’s offices in Toronto’s dot-com ghetto are being repeated across Canada and around the world: A new breed of investor–many of whom have never invested in any kind of high-tech company before–has arrived on the scene flush with tens, even hundreds of millions of dollars to spend. Inspired by equal parts greed, business savvy and fear of missing out on what is shaping up as the biggest investment bonanza of their lifetimes, they are lining up to throw money at fledgling Internet entrepreneurs, backing ideas that in some cases aren’t as old as the eggs in your refrigerator.

Incubators, which typically provide seed capital, temporary quarters and expert business development advice to start-ups, have become conduits for much of that money because they enable investors to buy large stakes in many small companies at a relatively low cost. If any one of them hits it big, the payoff will be huge. Would-be entrepreneurs with no other means or experience to launch a business find them equally attractive. The cost of entry can be high–up to 50% of equity or more–but they see it as the price of getting in the game. "Three percent of a company worth $50 million is worth more than 100% of a company that’s worth nothing," says Michael Upton, another current NRG incubatee who traded 33% of his company’s equity for NRG’s money and services.

In Canada, NRG has been joined by a half-dozen or more new incubators in the past year. Among the most significant: Intasys Corp. of Montreal, with US$50 million to invest; Vancouver’s IdeaPark.com Ventures Inc., created last July, since taken over by Itemus Inc. (TSE: VEN; formerly the mining company Vengold Inc.), which has $100 million earmarked for investment; and Brightspark Inc., cofounded by Toronto high-tech entrepreneur Mark Skapinker, which is expected to announce a $75-million-plus kitty for Net investments this month (see Sounds good, here’s a million). "Raising money for our venture capital fund is the easiest fundraising I’ve ever done," says Skapinker, "The reality is that we’re getting [a lot of] people saying, ‘Please, can I invest in Brightspark?’ And we’re saying, ‘No, go away.’ We’re turning people away."

It’s easy to see why. Risky tech start-ups were once financed and nurtured almost exclusively by venture capitalists and software millionaires. Now, just about every major player in business–including some of the most conservative, established companies in Canada–has set aside eight- or nine-figure sums to fund young Internet companies. For example, Ventures West Capital Ltd., a venture capital fund whose investors include Bank of Montreal and Ontario Teachers’ Pension Plan Board, has just raised $200 million for early-stage high-tech companies. And in January, Toronto-Dominion Bank committed US$100 million to a new e-commerce fund called TD iCapital. In the US, companies as diverse as General Motors, Disney and Andersen Consulting are jumping into the game. And everywhere you look, seasoned executives are walking away from successful but staid careers to cobble together what they hope will be the next great e-commerce venture fund. "Anybody 50 years of age with a lot of dough is now looking for this sort of thing," says Philip Beaudoin, a 54-year-old investor relations consultant in Toronto. "I guess maybe, maybe, it’s the herd mentality. People in the investment business tend to go where the money is flowing. You just don’t want to be the last guy in."

After hearing incessantly about Canada’s brain drain and how our investment community should be vilified for not supporting technology entrepreneurs, this sudden rush of money and attention toward the tech industry smells like salvation. But as Beaudoin’s comment suggests, there is also a strong whiff that the end of the boom is nigh. Given that even Finance Minister Paul Martin has jumped on the tech investment bandwagon with his latest budget, it would be good for most of us if the good times kept rolling a lot longer still. For we are fast reaching the point where this country’s hopes and dreams for a successful stake in tomorrow’s economy are wrapped up in this feeding frenzy. If successes are few or the excitement short-lived, a lot of the smart money flying around right now is going to look pretty dumb. As Jeff Skoll, former Torontonian and billionaire cofounder of eBay Inc., notes, it’s an outcome we should consider. "I think everyone is afraid of being left behind in the gold rush and, like previous gold rushes, common sense does not necessarily guide decision-making," says Skoll, who spent two months in a Silicon Valley incubator in eBay’s early days. "There will be more losers than winners at the end of the day."

Inside the converted warehouse where NRG is based, you won’t hear much talk about losers. Besides Timeismoney.com, there are four other incubatees in residence, all working toward official Web site launches this spring. While NRG’s principals expect that many of their ventures won’t pan out, cofounder Vicki Saunders insists, "We’re not shooting for a 10% success rate; we’re shooting for 100%." All around, the space is fired with a missionary zeal that belies both NRG’s origins and its niche in the market.

NRG actually consists of several modules, of which the incubator–the NRG Factory–is but one. The group began in the spring of 1997 as a nonprofit organization teaching youths technical, teamwork and entrepreneurial skills. It was the brainchild of Ford, now 54–an award-winning arts teacher from Toronto–and his spouse Saunders, 35, an idealistic dabbler who had studied computer science, politics and Russian foreign policy in university before spending a few years in the Czech Republic in the early 1990s, where she taught English and opened a store. Together with Saunders’ younger brother, Matt, a management consultant and MBA grad, the trio secured $100,000 through a government program to hire people between the ages of 14 and 24 for the summer. Their idea was to target corporations that marketed to youths, but were having difficulty getting their message across. The young NRG employees would spend several weeks picking apart a problem–for example, figuring out why a certain product aimed at kids wasn’t selling well–and then offer the kinds of insights and solutions only a group of energetic, straight-talking youths could deliver. The concept was a hit with several major clients, including Xerox, Royal Bank and Crayola, and within a year the group had transformed itself into a private consultancy called Kids NRG. Profitable from the outset, it soon boasted annual billings of about $1 million.

Smitten with success, the founders sensed they were at the leading edge of a transformation from old economy to new. The future was their passion, and a loyal, growing network of wired kids were their teachers. The magazine Fast Company was their bible. Vicki Saunders even formed a local Fast Company "cell" where loyal readers of the magazine–the disenfranchised, self-empowered 20- and 30-somethings of the new economy–could come together for regular meetings and discussions. Before long, Saunders would be styling herself into NRG’s resident guru. In an interview, Saunders, sporting a purple felt, knee-length kimono, describes her role at NRG this way: "I am the visionary, and exist in the cloud of possibilities, and I am intuitively strategic."

It was through an article in Fast Company that the NRG team discovered John Rae-Grant, a Toronto native who had left a 10-year software development career at Microsoft in 1996. Rich enough to never have to work again, Rae-Grant, now 36, went on to set up a "boot camp" for software developers near Seattle and, later, a consultancy for software companies. In the fall of 1997, he started to notice all the start-ups he’d worked with encountered the same sorts of problems–"all the things that every business that wants to grow has to do." Meanwhile, he and his wife worked on a few projects with NRG whenever they passed through Toronto and were increasingly impressed. His view of the world reflected the NRG mind-set; his dream, he says, "is to transform business into unspeakably beautiful performance art." Last March, he joined the NRG fold and bought a condo in Toronto.

As the four partners sat down last spring to plot the future, they began to review some of the accomplishments of the young people who had passed through their doors. They realized that well over 20 kids had gone on to create their own companies, and started to think about how they could expand their operation to foster some of those start-ups in-house.

By June, the time was ripe to move ahead. Incubators, a concept that had existed in obscurity for decades, were starting to command lots of attention in the US. This was due largely to the success of Silicon Valley’s Idealab!, which is now backing about 30 Internet companies, while former incubatees eToys Inc. and GoTo.com Inc. have attained billion-dollar market capitalizations after going public. Several new players in the US were also launching their own incubators, each raising upwards of US$100 million in funding. Meanwhile, in NRG’s own backyard, one of the kids from their own network, 16-year-old Michael Furdyk, grabbed national headlines when he and his two teenaged partners sold their self-made Internet company, MyDesktop.com, to Connecticut-based Internet.com for more than $1 million. The NRG incubator, the partners decided, would focus on young entrepreneurs with Internet business ideas–ideally those who had worked as junior consultants as part of their network.

The firm shopped the idea around to potential backers last summer but had no luck. "We couldn’t find a partner to fit our vision," says Matt Saunders, "so we decided to do it ourselves." For the first few months, NRG would fund its incubator investments from its own profitable consulting practice. In September, NRG Factory opened for business.

Not just anybody with an idea can get into the incubator. NRG receives dozens of business plans and ideas per week, and its goal is to launch only about one business per month. To get into the incubator, a company is supposed to meet a number of criteria: Is it distinct enough from other players in the market? How well does it stack up against competitors? Does it have a proprietary technology? Are the principals open to coaching and agreeable with the NRG atmosphere? And, finally, could NRG add value to the enterprise? If the two companies are a fit, NRG takes a stake as high as 49%, agreeing to fund up to $250,000. The entrepreneur and NRG staff then sit down and map out aggressive goals and milestones, all built around launching a Web site in the first 90 to 120 days. By the time the company has grown to 12 employees or spent six to nine months in the incubator, it is expected to find new quarters and be attractive to outside investors.

For those unaccustomed to the breakneck speed of business development in the new economy, this is all happening, as they say, in Internet time. "If [NRG companies] can’t create enough value to get a second round of financing, they’re gone," says Vicki Saunders, sweeping her flat hand across the top of her desk in a firm, "kaput" motion. Adds her brother: "You’re not putting up a building or making widgets, but developing a new technology or service or business model. In this day and age you can do that very quickly, so speed is crucial in this space."

As much as this bending of speed and time has translated into limitless possibilities for people like Vicki Saunders, it’s brought mostly gut-wrenching change to the world inhabited, until recently, by Aubrey Baillie–one of the three partners behind NRG’s new deep-pocketed partner, 2FundEcom. Baillie, 55, joined the investment industry 30 years ago, when the business was much like the tech sector today–fast-paced, highly entrepreneurial, all rough-and-tumble. But that industry grew up and consolidated as the big banks began buying in toward the end of the 1980s. By the late 1990s the industry was institutionalized–and shrinking. As downsizing hit the banks, veterans like Baillie–deputy chairman and chief operating officer with Nesbitt Burns–were squeezed out. Baillie left the company last May after its latest reorganization, and set to figuring out what he should do next.

Before long, the world of the old and new economies had intersected. Baillie found himself agreeing to pitch $100,000 into an Internet venture called StreetViews Inc. started last fall by Dennis Dewan, former head of investment banking at Midland Walwyn. Two other recently retired investment banking veterans–Peter Wallace, former president of wealth management at CT Financial Services, and Robert McLeish, former vice-chairman of Merrill Lynch–had also invested about $100,000 each. Wallace, who had spent the better part of a year researching Internet opportunities, saw the potential in combining their investing efforts. Last October, he invited Baillie and McLeish to join him. They agreed to pool their StreetViews investments, then set out to raise another $5 million to $10 million from family and friends to fund e-commerce ventures, or, for short, 2FundEcom. The partners quickly scored their first big success. On their very first investment, they spent $1 million to buy 1.25 million warrants for shares in a health-care e-commerce company called MedcomSoft Inc. (CDN: MDCM). The stock began to take off. By the beginning of March, the partners’ investment was worth almost $40 million.

What’s happened with the 2FundEcom partners mirrors the way the entire investment climate has changed of late. The public’s tolerance for risk is skyrocketing. Two, even three years ago, some people thought the technology bubble was set to burst. Time and again since then, the markets and the economy have defied the naysayers and continued to hit new heights. Along with it, speculative investments have surged. In 1996, US venture capitalists raised just over US$1.5 billion for Internet ventures. By 1998, that number had grown to US$7 billion. Last year, it hit an astounding US$32 billion. In Canada, 1999 was also a banner year for tech stocks, as the new economy’s momentum continued to build. And the more investors moved to tech stocks, the more the rest of the market sagged. "If you had a traditional portfolio, you would have big holdings in banking and mining," says Baillie. "Well they’re both down. They’re both down big time. All the positive performance is coming from these other sectors."

For Baillie and his partners, having a solid hit with MedcomSoft gave them the courage to start swinging for the fences. Rather than trying to buy into hot public offerings, however, the partners began hunting for an incubator or other partner they could buy or merge with. They liked the idea of funding Internet start-ups, but wanted to diversify their investments over several companies at once. It didn’t matter if a good portion of them failed–as long as the winners continued to grow in value. Then, in early January, Baillie met Matt Saunders at a United Way function. Baillie was impressed with NRG’s early track record; Saunders recognized Baillie was long on experience and connections. Before long, the chance meeting quickly turned into discussions about merging the two entities. A deal was reached in Internet time–within five days they had an agreement in principle.

All of this puts Baillie in an interesting yet vulnerable position. While he has successfully moved a chunk of his money into the new economy, he is still operating in a world that is very new to him. Many others of his generation are now facing a similar choice. They haven’t grown up digital like their kids and grandkids. They don’t understand the astronomical valuations awarded high-tech IPOs (admittedly, most of the rest of us don’t, either). But they see the world changing, and watch as entrepreneurs 20 to 30 years their junior amass far greater fortunes than they ever dared to dream about and they have decided that they have to participate in the new economy in some way, any way. "Look what the financial markets have done to dot-com values," says Baillie. "That’s why capital is saying–why we’re saying–that rather than buy an IPO at a valuation I don’t understand, why not take my money and put it into Net properties at the grassroots level?"

It’s a fabulous circumstance for the likes of incubators such as NRG. But what happens if too much money begins chasing too few bright ideas at the earliest stages? Is an already overvalued stock market about to become even more so? And are nascent entrepreneurs likely to be any more successful with people like Baillie throwing millions and billions of dollars at them? And, perhaps the biggest question of all: will any of these companies–even the ones that have gone public and are now worth billions–ever produce the kinds of profit upon which the entire promise and value of the Internet frenzy is based?

It’s the last Friday in February. The old economy and the new economy are working, standing, even playing cheek by jowl in the NRG offices. Baillie moves about the place looking like a banker enjoying a midlife renaissance, sporting a silver shirt and no tie. His new title at NRG is Mentor Capitalist, and his activities are mostly limited to acting as an adviser and board member. He looks like he’s having the time of his life. "This place is electric," he says.

Baillie’s wardrobe is topped off with a bright pink lei. He’s joined by about 50 outside participants who have gathered for an "intellectual spa" sponsored by NRG, the sort of brainstorming sessions NRG holds regularly. The subject of discussion is the future. The theme is tropical. Participants have paid up to $250 to participate in the morning-long session, which is to be followed by lunch, a performance by Rae-Grant’s barbershop quartet (flown in from Seattle for the occasion) and free massages from one of five massage therapists hired for the day.

Shortly before 10 a.m., the assembled crowd breaks off into smaller groups. Baillie finds himself sitting across from 18-year-old Jeremy Kojima, a diminutive, sweet-looking high school graduate who, like many people his age, can’t make up his mind about what to do with his life. But Kojima, who works at NRG as a Web designer–he prefers the title New Media Concierge–is here to teach Baillie about the future.

Close your eyes, Kojima says, and a circle of 12 people ranging in age from teens to mid-50s, oblige. "The year 2000 . . . was 20 years ago. How do you get around? What does your house look like? What are the appliances in your kitchen? How are you communicating with your friends and family–and how are your appliances communicating with your friends and family?"

It doesn’t take long for the participants to start riffing off ideas. In 2020, one woman predicts, computer screens will be commonplace on the steering wheels of cars, allowing drivers to use the Internet while an automatic pilot steers them into algorithmically determined traffic patterns. Another participant says we’ll have microchips implanted in our heads and clothing, allowing us to have instantaneous online chats with the likes of Bill Gates. Baillie, for his part, suggests mass transit is the way of the future. The atmosphere is dynamic and hopeful; this is not a place for skeptics, but dreamers and utopian optimists enchanted by all the wonderful things technology can do to change the world. Frankly, it doesn’t take a Luddite to find some of the suggestions a bit terrifying, in a 1984 sort of way. But that’s why Baillie and the other adults in the room are here: to learn from 18-year-olds like Kojima–the leaders of tomorrow–what the future will look like.

For now, however, the kids still have a lot to learn about business. That’s evident during an extensive, three-day visit to NRG headquarters last month, during which NRG staff granted Canadian Business almost unlimited access. Despite styling themselves as paragons of the new economy, there doesn’t seem to be much in the way of sustainable, sensible business ideas in the company’s ballyhooed incubator.

Charity.ca (a company to be equally funded by NRG and businessman Richard Ivey), for example, aims to be the premier Web site for Canadians who want to give to charities online. That’s a noble idea, but it’s difficult to see the business case for such a venture. For one, it will be no small feat to get even a small percentage of the country’s 74,000 charities on board and online. Or, for that matter, convince Canadians–who are used to being solicited personally or by direct mail–to change their giving habits and start actively seeking out the Web site to make their donations. Furthermore, there doesn’t seem to be an awful lot of revenue potential. Canadians gave $4.45 billion to charity last year. Even if 25% of that were collected by Charity.ca, with the company extracting its intended 8% fee, you’d be looking at maximum revenue of $89 million.

Another business, TwoMobile.com, seems even more far-fetched. The principals of TwoMobile–19-year-old Brad Mills and his 21-year-old friend Fabrizio Pilato–test the latest wireless products and then write reviews with a highly personalized touch. This business, Rae-Grant explains, "is a content/personality play." In other words, the prime source of revenue is meant to come from the company’s two founders syndicating their column to publications–a model, Rae-Grant says, "that works pretty well for Dave Barry and [the recently departed] Charles Schulz." It’s also a model that works not nearly as well for freelance writers, surely none of whom have had an incubator commit up to $250,000 to get them established.

Over in the corner by the tall windows overlooking SkyDome, Kofman and Chen are explaining the Timeismoney concept. The idea–that you should pay only for the time that you need from a pricey expert–makes sense for about 10 seconds. Beyond that, the business model seems fuzzy, although the two principals don’t seem the slightest bit concerned about the viability or practicality of a venture that relies upon selling the time of experts in small chunks over the Internet. Already they seem to have set aside their plan to get lawyers online, at least for now, and are instead focusing on expert speakers and business consultants. They’re 18 days away from the "soft launch" of their Web site, and there’s a lot of work to be done.

Richard Ford, the former teacher and now "Chief Passion Architect" (everyone gets to make up their own titles at NRG), comes over to check on their progress. "We’re considering hiring a business development person," says Kofman.

"When you say, ‘considering,’ what does that mean?" shoots back Ford in a low but intimidating voice.

"We have a candidate."

"How well connected?"

"Not that well."

"You need the most amazing person who exists in Toronto," says Ford.

The meeting progresses like this for about 10 minutes, all rapid-fire questions and answers, mostly between Ford and Kofman. "Will you be ready March 8th [the date of the soft launch]?" asks Ford.

"March 8th," Kofman repeats, assuringly. "If it doesn’t happen March 8th, then within a week of March 8th."

He tells Ford they’re also thinking of hiring a tech person.

"Do you both have the business skills?" Ford asks.

"I think so," says Kofman.

"Do you need any help?"

"We do. But we haven’t been able to define for ourselves what we need."

"What do you need?"

"I don’t know," says Kofman. "I’ve been putting a lot of thought into that."

Thought, maybe, but a lot of time and money as well. Kofman and Chen have burned through almost $200,000–half of that on software development and $15,000 for the Web address–and are still trying to work the bugs out of their technology prior to launch (the date of which has since been pushed back to March 23th). But that is far from their biggest problem. A source close to the goings-on of many of the start-up Internet companies in downtown Toronto puts it this way: "Their main problem is they’re young and inexperienced. I don’t know if I’d put them in front of their biggest clients. They need business people who can do deals, who can front the company and say, ‘This is the way it’s going, you’d better get in line now,’ then sell it at both ends."

These ideas, remember, are the ones NRG’s principals approved. The founders, one might conclude, are a soft touch when it comes to people they like with ill-fated business models. Chen and Kofman are a case in point. They met Matt Saunders at a Fast Company meeting and were the incubator’s first entrepreneurs in residence. When their online appointment-booking site proved to be a dud, NRG didn’t kick them out, but instead helped them brainstorm until they came up with their Timeismoney idea. "We make a lot of the decisions based on the people," says Rae-Grant, who sports the double-barreled titles of Chief Technology Officer and Dot-Com Midwife. "The people and the idea are the primary thing."

At least two other incubatees chose not to stay. One company, Savvy Inc., which runs the Web site shenetworks.com, moved in last fall but was gone within a week. The two 20-something founders determined the nascent incubator didn’t offer them what they couldn’t already get from their laptops at home. An even bigger setback was the story of BuyBuddy.com, an online comparison shopping site cofounded by MyDesktop.com’s Michael Furdyk. BuyBuddy.com moved into the incubator in October when it had two employees, then grew to 16 before moving out in January. But for that, NRG ended up with nothing in return, failing to secure an early ownership stake in BuyBuddy.com–which is kind of the point of incubating companies. Now, if NRG wants in, it will have to bid alongside other venture capitalists to provide the $5 million to $10 million that BuyBuddy.com is trying to raise for its next round of financing.

Perhaps the most promising incubatee is that founded by Michael Upton. Called SportsLink Inc., it offers a Web service (JustforSport.com) that allows amateur sports teams and leagues to upload their schedules, statistics and team newsletters to the Web. The most attractive feature is the personalized online sports card, which allows players to create their own slick virtual site, complete with their lifetime stats and other relevant information. Upton, who’s 28, has bet everything on his company: he’s already poured $40,000 of his own money into the slick-looking Web site and is putting the finishing touches on an even more impressive version. He’s also just quit his job as a media director to build the business full time–despite the fact that his wife Lisa is on maternity leave. Upton has joined the NRG incubator for one reason–to turn his three-year passion into a viable business–and is working closely with partner Chris Whiteford, Rae-Grant and other NRG staffers to do that. If the company can expand beyond Toronto (where thousands already use the service) and become the premier spot for amateur sports enthusiasts in North America, Upton just might be able to attract enough sponsorship and ad dollars from equipment manufacturers to make the company viable. For now, he’s happy to have chosen NRG. "It is kind of warm and cozy," he says. "There are a lot of people to help, everything from strategy to marketing to finance. I know I’m not on my own anymore, which is good."

To be fair, the idea behind NRG–and every other incubator–is to try out a lot of ideas in the hope that a few will succeed. Even one big jackpot makes the whole thing totally worthwhile. Just look around–there are some equally unfathomable Internet companies already up and running and enjoying healthy market capitalizations.

With everyone from Paul Martin to the CEOs of our most conservative banks enraptured with the possibilities of e-commerce, the entire marketplace is beginning to resemble the hothouse atmosphere of an Internet incubator. If the IPO of a newly hatched dot-com company with zero revenue can produce instant billionaires and make paper fortunes for thousands of lucky investors, the half-baked utterances of kids barely out of high school begin to sound like rock-solid business concepts. When multibillion-dollar dot-com IPOs occur not rarely, but every week, we have reached a point in history where none of the old rules apply–where ignorance, inexperience and blind luck are more valuable by far than ingenuity, innovation, daring and courage. Or, we’ve reached a point in a market awash with fear, greed and dumb money where some as-yet-unknown event will tip us right over the edge into outright panic and back to reality. At NRG, Len Kofman and Tao Chen, the intellectual engines of Timeismoney.com, are racing the clock as they burn through their $250,000 in start-up cash. For Kofman and Chen and a thousand other would-be dot-com billionaires, the challenge now is to get their concept to market while the market still exists.