The first stage of any venture, Ciporin argues, is a "gathering of the prophets." These people do not need to be founders, but simply people with the business acumen, connections, and passion to move the company forward. Shopping.com (originally dealtime.com) started with technologists, but it didn't have a founding executive.

Dealtime was located in a small office above a deli in Israel and needed someone to take it from "gizmo" to company. At the time, Dan was a Senior Vice President at Mastercard. The recruiter who matched up the two must have been very creative, but it soon became apparent that it was a good fit. Dealtime's original product was an email alert system that notified shoppers when an item's price dropped below a given level. After being offered the CEO job but prior to accepting, Dan signed up for the service and set an alert on a new computer. After hearing the PC beep from another room, he rushed back and bought the computer on the spot.

We take such alerts for granted these days, but the "experience of consumer empowerment" he felt in his gut turned out to be the defining moment in his decision to leave Mastercard for uncharted waters. Having been infected with a passion for the idea, he was positioned for the challenges to come.

The challenges came soon enough. 2001 was a tough year for all tech companies, but especially for consumer e-commerce. shopping.com laid off 250 of their 300 staff and withdrew their IPO filing.

Through all this, Dan remained convinced of the company's potential. There was indeed a light at the end of the tunnel, which eventually arrived in the form of eBay. In August 2005, eBay paid $620 million cash for shopping.com. While the CEO hadn't changed, the business model had adapted and evolved over the years, particularly with the acquisition of epinions.com, expanding recommendations from "where" to "what."

It's tough to draw sweeping generalizations from a sample size of one, but at the very least, Dan's experience underscores the importance of passion and dedication in ventures where the path from idea to exit is impossible to predict. Having a set of founders to take a company on this journey may not be critical, but a new business won't get far without executives who feel a founder-like passion.

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Coincidentally, a check from shopping.com for $3.01 arrived in my mailbox today, final payment for their Cash Back program that was discontinued on Aug. 31, 2005, the day after the acqusition by eBay closed.

[As an aside, Dan quoted Bill Gates loosely as follows: "Human beings are funny animals. They always overestimate the amount of change that will occur in a 2-year period, and they always wildly underestimate the amount of change that will occur in a 10-year period."]

"*** Best line I heard yesterday came from a VC who’s firm is exploring an investment partnership in China: “The lobby of the Shanghai Four Seasons might as well be Buck’s.”"

Alas, I doubt the Four Seasons has got a proprietor to match Jamis MacNiven.

With e-paper moving "from sci-fi to marketplace," that day may yet come. For now, however, publishers can take comfort in paper's ability to boldly go where computers don't dare.

(Even distant threats are a big deal on a magazine publishers' time horizon. As Mr. Lewis noted, Money (the magazine) didn't make any money (cash) for its first nine years.)

Most ventures start with a seed of discontent, and in Rosenzweig's case, the seed sprouted 30,000 feet in the air. On a flight from Newark, he spoke with his seatmate about their shared frustration of of not being able to get a good cup of tea. By the time the plane landed, he had a business partner and the first sprouts of a business.

Writing is normally the first step in making ideas tangible. Rosenzweig generated a whopping 400 pages of ideas in six weeks. These notes eventually became a book on starting a business, and the advance on the book became the seed capital that funded the Republic of Tea.

Perhaps the most surprising lesson is is that good things can come from Newark Airport. As if a multimillion dollar business weren't enough, Rosenzweig also met his wife at Newark.

(liveblogging from the 2005 Net Impact Conference at Stanford Business School.)

1) Net Present Value is often an easy calculation, but no better than the underlying assumptions.
2) Business leaders realize that too few people know how to think (e.g., knowing when an NPV calculation even makes sense).
3) No one has yet solved the principal-agent problem.
4) Accounting is truly important, especially with regard to cash flows. Not sexy, but particularly critical to young companies.
5) In the wake of my first set of exams, it's clear that what's outside of the classroom is more important than homework and grades, as that's where people actually live, dream, and work.

Now this may not seem to be a lot of bang for the buck (12.5%*$120k equals roughly $12k), but I'd wager that it's a positive NPV transaction for me on many levels. The final point above has a lot to with that, and it's something I'll return to in the future.

Watch a cat slowly slinking across the yard, creeping towards a bird, inch by painstaking inch. When he gets within a few inches from his prey, the bird takes flight and slips out of his reach.

Yet does the cat stop being a cat? No, he tries again with no less energy, even if he catches the bird only once out of a hundred times. Similarly, if grass is mowed every week, it gets cut off before it reaches its full height. But does the grass stop growing?

Now a cat and a blade of grass are unusual metaphors for an entrepreneur (and not entirely flattering!), but I doubt I'm alone in feeling them hit close to home. Success may seem elusive, dangling tantalizingly, just out of reach. An entrepreneur is someone who can wake up energized each day, knowing that today may be the day when the grass grows tall and the bird is snatched.

Related reading:

• Entrepreneurs: Born or made? A conversation with Herb Kelleher of Southwest Airlines
  
• The Entrepreneur's Checklist
  
• Bnoopy: Persistence Pays, Part 2
  

• Products with short, uniformly weird names (Squidoo, Zimbra, Rollyo, Joyent, Flock, ...)
  
• Company presentations that came off (to some) as mere "feature demos for ideas [...] to incorporate into future products"
  
• Feverish "innovation, enthusiasm and optimism" that felt like 1995-1996
  
• The "triumphant" (or ominous) return of Mary Meeker and Henry Blodget
  
• Rumblings of Bubble 2.0 (deja vu all over again?)
  
• What Fred Wilson has labeled second derivatives (e.g., "Google Maps meets delicious," "Skype meets MySpace")
  
• As with any conference, much was learned outside of the panels (Steve Hall saw a few interesting things on people's laptop screens)

Where does this leave us? Certainly the hype is building to a troubling level, particularly in cases where business models are de-emphasized (again). Some people are already mourning the death of Web 2.0, but I'm inclined to be a little more optimistic. The rapid technology growth is compelling, but investors need to remember the lessons of Bubble 1.0. I'm heartened to read VCs like Fred Wilson (who sits on the board of del.icio.us) expressing caution:

It doesn't mean we are going to stop investing. But it does mean we are going to be more careful. We have to raise our hurdles when others are lowering them.

If other investors share this cautious optimism, funding only companies that have a chance of actually making money, Web 2.0 may yet prove naysayers wrong. If not, we'll look back incredulously at Bubble 2.0 someday. We're still getting over the hangover of Web 1.0; there's no need to bring the punch bowl back just yet.

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[For visuals, Flickr has photos from the conference, as well as from the tongue-in-cheek "blink tag worshiping" rival Web 1.0 summit.]

Related reading:

• Infectious Greed: Web 2.0 Conf as Feature Demo
  
• Northwest VC: YAW20CP - "Yet another Web 2.0 conference post."
  
• A VC: Web 2.0 Reactions
  
• Fractals of Change: Bubble 2.0 – Introduction
  
• Om Malik’s Broadband Blog - And 5 More Things About Web 2.0 conference
  
• Feld Thoughts: Web 2.0 - Building Features or Value?
  
• Laughing Squid - Web 1.0 Summit
  

It sounds almost like a joke, but today an executive of a consulting firm mentioned to me that the head of Hewlett-Packard's PC division took his managers to visit Dole. He figured they could learn something about inventory management, given that PCs have the same shelf life as bananas.

The metaphor only goes so far, however, since bananas are only bundled with other bananas. HP, on the other hand, was considering bundling PCs with printers at no additional cost, hoping to make up for the cost through the future sale of consumables. As a printer manufacturer, HP has as much in common with Gilette's razor blades as it does with Dole's bananas.

Some people wanted to retrieve and modify data on the application's first screen; some wanted the feature in three other places. The compromise, not surprisingly, was to place it in all four locations. By catering to each user's needs, however, the application's logic and structure took a turn for the worse.

When technology enables features to be added easily in multiple places, the temptation to take the path of least resistance may ironically create products that are overly complex, non-intuitive, and hard to use.

Albert Einstein is remembered for many complex achievements, but his Zen-like maxim on the balance between simplicity and complexity is often overlooked: "Everything should be made as simple as possible, but no simpler." Too often we err on the side of complexity, failing to realize the full cost of overshooting the goal.

Alas, Newton's Second Law of Thermodynamics seems to apply here, for entropy increases over time. Despite the best intentions, the steady influx of new data often leads to a proliferation of unfiled items. To locate an important document, the only option may be a full text search. Windows has a built-in search feature, but its full-text search can be timed in minutes, not seconds.

AltaVista gets no respect these days, but it was a pioneer both in full-text web searching and, perhaps more importantly, nearly instantaneous searches of one's own PC (remember AltaVista Personal eXtension 97?). Aside from the funky capitalization, Personal eXtension was a direct precursor to Yahoo Desktop Search, Google Desktop, and the Lookout plugin. While these are extremely useful products, the biggest question the latest crop of utilities raises in my mind is why it took us eight years to get here from AltaVista PX.

The next big change in local search will likely come at the operating system level. Microsoft's long-awaiting Longhorn OS was supposed to include WinFS, an object-based file system that would dramatically enhance search capabilities. However, we now have the following disclaimer from Microsoft:

UPDATE: In spite of what may be stated in this content, WinFS is not a feature that will come with the Longhorn Operating System. However, WinFS will be available on the Windows platform at some future date, which is why this content continues to be provided for your information.

Nonetheless, Longhorn will still offer advanced search features to rival Yahoo and Google's offerings (Microsoft acquired Lookout back in 2004). These incremental improvements make it ever easier to search gigabytes of data to find particular words. What they won't provide, however, is a new way to organize the ever-growing complexity of modern data. For that, a new paradigm is needed.

Coming soon: metadata and tagging to the rescue

Such a fear is irrational, of course, for a new blog's audience can generally be counted on one's hand. Despite the impermanence of web content, however, terms such as "trackbacks" and "permalinks" remind bloggers that dormant posts may one day spring to life when BoingBoing-ed, Slashdotted, or del.icio.us-ly discovered.

As the modern equivalent of the unedited, unvarnished vanity press, blogging places squarely on the author all the blame for bad writing (or, more optimistically, the praise for brilliant turns of phrase).

In a future post, I'll lay out my modest plans for this small patch of Internet real estate. In the meantime, after a month of procrastinating, I'll simply press post, hop onto the stage, and have a blank blog no more.