The way to increase our income was to increase our eye-clicks.
A year ago, all you needed were the words Internet start-up and you were a paper millionaire. By the end of 2000, it was clear that little of that paper was green. To understand what happened, consider the case of one short-lived start-up, i-litout.com.
i-litout.com was the brainchild of Bud Bitterbatter, a Silicon Valley-based shoe clerk. “I was fitting some young hot shot with size-19 Nikes,” recalls Bitterbatter, “when it occurred to me that I should be the one sticking his foot into something big.”
But what sort of something big should he be sticking his foot into? “It had to be on the Internet, and it had to be original–something no one else had ever done.” Bitterbatter briefly considered selling books, DVDs, and erotic stuffed animals online, but quickly decided against it. “The problem with selling books,” he explains, “is that first you have to buy them. I wanted to sell something that anyone could get for free.”
Bitterbatter eventually settled on electronically distributing great literature. “As soon as I realized that Shakespeare’s plays weren’t copyrighted, I was there.
“But I realized that old books might not be perceived as with-it or high-tech. To help fight that perception, I named the company i-litout.com, and gave it the slogan ‘i-litout.com: The i-litout.com of the Internet.'”
i-litout.com went online in February 2000, with a single page offering a bold statement of intent:
“i-litout.com: The i-litout.com of the Internet, will be soon releasing on this sight they’re exciting new Web site, i-litout.com: The i-litout.com of the Internet, witch will rock the world with the exciting e-possibility’s of e-great literature; hopefully. The site will be of Old Literature with a New Twist; the new twist being that we are making them available on the Internet.”
“I wanted to give it a real literary flavor,” explains Bitterbatter.
Once the site was up, Bitterbatter needed employees–a receptionist, a literary consultant, and a designer/programmer. He found them all in his nephew Billy Better Bitterbatter. “Billy understands Web pages better than anyone,” enthuses his uncle. “To give each book its own unique look on the Web, he turned each one into its own complete .jpeg file. Yeah, even War and Peace. Billy agreed to work without a salary for one percent of i-litout.com’s stock.”
But for that stock to be worth anything, Bud Bitterbatter had to find investors. The first one he found was his grandmother, who purchased a few shares for $50. “It was very nice,” he recalls. “The check came in my birthday card.”
On the strength of that sale, i-litout.com went public on April 1. And the result was astounding; within four hours, the value of i-litout.com stock went from $1 a share to $424.93. Overnight, Bud Bitterbatter was a billionaire. But he refused to let it go to his head. “I would have felt better if someone had actually bought the stock.”
i-litout.com’s luck turned the next day, when investors noticed the steep climb and started buying. Day trader Ernie Kovakian recalls, “It had all of the earmarks of a successful start-up-it was on the Internet, and other investors loved it. It even had a name that ended in dot-com.”
Bitterbatter’s life changed overnight. He moved out of his squalid apartment in East Palo Alto and into another one a block away. “I wasn’t yet a multibillionaire, so the Valley’s nicer homes were beyond my reach.” He did, however, find the finances to invest in his hobby, collecting the earwax of famous Renaissance painters.
But by September, there were problems. As the market dried up and money became scarce, investors began to notice a few problems with the i-litout.com business model. The new company didn’t actually do anything that might bring in money. “It didn’t seem relevant,” argues Bitterbatter. “We had assumed from the start that our primary means of income would be investors.”
By October, Bitterbatter had come up with a solution. “The way to increase our income was to increase our eye-clicks.” With that goal in mind, he released a press release:
“October 31, 2000: i-litout.com: The i-litout.com of the Internet and the leading e-publishing company for e-publishing the Great Work’s of the English language, has announced today that they will be introducing a new company slogan–Literature by Literates.”
The change helped. “Within two weeks of the announcement,” Bitterbatter brags, “we were up 200 percent, getting as many as 15 hits a day.” To improve the company’s stock rating, Bitterbatter began to sell advertising space. “I made 18 cents one week.”
But that wasn’t enough to satisfy the investors who had poured hundreds of millions into i-litout.com. By the end of the year, Bitterbatter’s grandmother was screaming for her $50 back. All she was able to recoup was 35 cents.
But Bud Bitterbatter still has hope. “Great literature is more than just words and sentences. So we’re going to give our audience that high-tech, multimedia, interactive side of literature that everybody is clamoring for: fonts.”