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How Venture Capitalists Would React If Today's Big-Shots Were Start-Ups

STAMFORD, CONN. ( — It's often said that if someone approached the FDA with aspirin today, the product would never be approved. Would the same hold true for Priceline, Amazon, Yahoo, and other big Internet players? If they took their ideas to their version of the FDA — venture capitalists — would they be "approved," Or would VCs ignore them like a banner ad?

Jay Walker, Priceline

Jay: Hi, I have an idea for a dot-com.
VC: It's not business-to-consumer, is it?
Jay: Yeah, but it's different. It's Priceline. We're going to sell unused airline seats and hotel rooms and let people bid on them. So you could go from Atlanta to Seattle for, say, $100.
VC: Sounds pretty good for a direct flight.
Jay: Oh, hey, not direct. Not usually. Maybe a connection or two.
VC: So Atlanta to Cincinnati to Seattle.
Jay: Yeah, like that. Maybe throw in Dallas on the way. And L.A.
VC: And I'd put up with that so I could fly cheap on the day I want?
Jay: When you say 'the day I want,' you mean you'd want to fly on a specific day? That might not work so well.
VC: And you expect me to give you money for this?
Jay: Wait, there's more! We're going to get into groceries and gasoline and mortgages...
VC: You're going to sell unused groceries and gasoline?
Jay: No no. See, like with gas, we get a price from the oil companies, then people bid on our site for, say, 20 gallons at a certain price, then they go to the gas station and get the gas.
VC: Right. So the oil companies will sell you their gas cheaply because...
Jay: Because we guarantee them sales.
VC: Of course. Because they're worried that consumers might suddenly decide they just don't need gasoline anymore. Run their cars on something else, like windmills, or nuclear fuel.
Jay: Look, I'm going to get a patent on this stuff, too. So we'll make money from anyone who wants to use our model.
VC: Yes, I imagine the line will stretch around your desk. We'll call you.
Jay: But we're going to get Capt. Kirk from Star Trek to sing these crazy songs...
VC: Next!

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