From: Rohit Khare (rohit@uci.edu)
Date: Tue Mar 07 2000 - 00:33:11 PST
[How much worse is it going to get? And why can't I have Adam answer
these questions, which he'd no doubt smash out of the park? Who wants
to be a millionaire indeed!... sigh, Rohit]
[At least there's a mild social-justice upside. Two decades, however,
is a california guy dreaming. This *is* a key moment, and worth
savoring]
>But perhaps the most important lesson to pull from this week in
>Atlanta: things change. After Mike Bruce of SingleShop.com got the
>$5 million question right, the place erupted in a spontaneous
>standing ovation. The audience was jubilant. The catch: Atlanta's VC
>community, like money communities in most places, is overwhelmingly
>white and male. Mike Bruce is black. Even two decades ago, that
>wouldn't have happened.
March 6, 2000
SingleShop.com wins a $5 million game
By Karie Atkinson
Redherring.com, March 06, 2000
ATLANTA -- Virginia-based SingleShop.com was the lucky startup to
walk away from Red Herring's Venture Market South conference with a
$5 million equity investment from PTEKVentures, the investment arm of
Atlanta-based PTEK Holdings (Nasdaq: PTEK).
The money was not raised after weeks of negotiation in Sand Hill Road
boardrooms, however, but in a competition modeled after the popular
Who Wants to Be a Millionaire game show.
The 44 Internet startup companies from the Southeast that Red Herring
chose to participate in the conference were all eligible for the
investment. PTEKVentures selected four companies to compete for the
prize, including SingleShop.com, Chutney, WorldwideTesting, and
iKimbo.
The competition -- moderated by Boland T. Jones, founder, chairman,
and CEO of PTEK Holdings, and hosted by "Pete Tek," a Regis Philbin
impersonator -- was based on technology trivia from the March 2000
issue of Red Herring, on stories in Redherring.com, and on
PTEKVentures-related questions. The speed-round to determine the
first contestant got off to a slow start as the first question
stumped each company.
The contestants were asked to list IPOs in order of their offering
from earliest to latest. The list included Ask Jeeves (Nasdaq: ASKJ),
eBay (Nasdaq: EBAY), Palm (Nasdaq: PALM), and VA Linux Systems
(Nasdaq: LNUX). After giving the companies numerous chances to guess
the right order, between bouts of laughter and sighs from the crowd,
Mr. Tek moved on to the next question, in which contestants had to
arrange four high-tech U.S. area codes in order from east to west.
PUTTING THE PRESSURE ON
Mike Bruce, the cofounder, president, and CEO of SingleShop.com,
answered the question correctly and moved on to answer a series of
seven questions. After the speed round, Mr. Jones announced he was
upping the prize, PTEKVentures's check, from its original $1 million
to $5 million.
Mr. Bruce was cool when he answered the next four questions
correctly, despite the added pressure intensified by the higher
stakes. The questions included "Where is Herringtown located?" and
"According to author Neil Stephenson, if Microsoft (Nasdaq: MSFT) is
considered to sell bloated station wagons, then what does Apple sell?"
Mr. Bruce decided to throw out his lifeline on the fifth question,
"What best-priced IPO of 1998 increased 1,304 percent over its offer
price?" The audience became nervous as SingleShop.com's CEO picked a
random person in the audience to help him out. But his lifeline soon
became a hero when he correctly answered "eBay" and allowed Mr. Bruce
to move on. Sighs of relief and encouraging yells filled the Ritz
Carlton ballroom.
Finally, Mr. Bruce was just one question away from winning $5
million: "Major sites like Amazon.com (Nasdaq: AMZN), eBay, and eToys
(Nasdaq: ETYS) make up what percentage of the $85 billion
capitalization of Web companies in the space: A -- 25 percent, B --
50 percent, C -- 75 percent, or D -- 90 percent?"
Not a trace of sweat collected on Mr. Bruce's forehead. Mr. Tek
warned the CEO that he had thirty seconds left to answer the
question. The silence between the warning and the answer only added
to the nervous tension, but he answered with a confident "C".
Mr. Tek's habit of incessantly asking Mr. Bruce, "Are you sure about
that answer?" -- created even more impatience among the audience. But
the CEO answered with a calm and collected "Yes."
The answer was correct and the moment almost as exciting as the
television show -- judging from Mr. Bruce's initial blank look of
disbelief, then immediate burst of excitement as he accepted the $5
million check from Mr. Jones.
ONE-STOP SHOPPING
SingleShop.com raised its first round of $1 million in July 1999 from
Draper Atlantic, as well as personal investments from Tim Draper, who
founded Draper Fisher Jurvetson, and a second round of $12.5 million
in December from Columbia Capital, Merrill Lynch (NYSE: MER), and
prior investors.
The startup operates a shopping engine allowing users to compare
products and services from different e-tailers, to shop with a single
cart, and to check out with one transaction, from the same site. The
company derives revenues from the upfront fee it receives from
licensing its technology to consumer-oriented businesses and through
charging monthly ASP fees.
Despite all the excitement and buzz around the funding,
SingleShop.com plans to evaluate and investigate the investment
carefully for its strategic value and terms of the deal. "We will
take the research we do on PTEKVentures's track record and network to
our board of directors. As CEO, I need to be sober in my thinking,"
says Mr. Bruce.
That said, he could not withhold his elation at receiving the $5
million funding. "The money will build momentum for us by helping us
to build a name for ourselves out west. Silicon Valley is still the
leader in valuation, smart money, and buzz," says Mr. Bruce.
Bill Neely, the startup's cofounder and director of strategic
planning, also sees the investment as a catalyst for helping
SingleShop.com sign on reputable partners. "Now it won't be as hard
to partner with the portals and content communities we want to
target," says Mr. Neely. The startup expects to sign on beta partners
this quarter.
ONE-STOP B2B2C
According to Mr. Neely, the company differs from its competitors,
including DealTime.com, MySimon, Smartshop.com, and RedCart
Technologies, which he says only offer pieces of what SingleShop.com
provides. "Unlike our competitors, we are a unified, one-stop shop as
well as a B2B to consumer company," Mr. Neely asserts.
John Backus, managing partner of Reston, Virginia-based Draper
Atlantic, an investor in SingleShop.com, thinks that companies with
pan-Web business models, like SingleShop.com, will prove an
attractive investment sector for venture capitalist firms in the
future.
Like MySimon, which CNet (Nasdaq: CNET) acquired March 1 for about
$736 million, SingleShop.com offers price comparisons between various
merchants. However, according to Mr. Backus, SingleShop.com goes
beyond MySimon because it not only offers competitive pricing
capabilities, but also allows consumers to buy products from multiple
e-tailers with one click while staying at one site. "SingleShop.com
is MySimon-plus," says Mr. Backus.
Although SingleShop.com was the big winner of the event, PTEKVentures
decided to also invest $1 million in each of the runner-up companies.
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