Calling All Investors

by Leonard Richardson

Published on 07/05/1999

I'm going to start an Internet company. It sounds impressive, but it's really not difficult to do; the question "How do I start an Internet company?" reduces to the question "How do I figure out a way to lose a lot of money very quickly?", and it just so happens that I am an expert on losing money.

The obvious idea is to just give your money away. But investors don't like that. I have a friend who tried a scheme like that, and he couldn't raise cent one in capital. Even a VC can see that just giving money to people doesn't have anything to do with the Internet. It's a plain, old fashioned, brick-and-mortar money-losing operation.

But I've got a plan that stands a good chance of being the most successful Internet-related loss in history. And I'm laying out my business plan here because I'm looking for investors. I'm not in it for the money; I made my fortune several times over when Scott and I took public. I'm doing it for the public good.

When you buy a system that guarantees, for example, "99.99% uptime", you're not really buying that amount of uptime. You're buying a guarantee that, if your downtime exceeds 0.01%, you will be compensated for the money you lost due to that downtime. What my company will offer is free Web-based uptime guarantees. Obviously, then, the name of the company will be

We don't sell systems; that's too much overhead. That requires employees and premises. What we do is guarantee your existing Internet-connected systems to 99%, 99.9%, or 99.99% uptime. You sign up via the Web, download a system monitor (we'll have versions for all major platforms), and go about your business. Whenever our system loses contact with your systen, you'll get a check from us, the amount to be determined by money lost per hour of downtime.

Unlike the other guys, we don't care why your system went down. Whether your OS crashed, your web server crashed, your intern took a hard drive to use in another machine; it's all the same to us. The other guys won't reimburse you for stuff that's not their fault. Nothing's our fault, but we'll reimburse you anyway. Who are you going to get your uptime guarantee from?

Everybody on the Web complains about downtime. They expect every site to be up 24 hours a day. But it just doesn't work that way. Murphy's Law dictates that every site will benefit from our services, sooner or later. If and when something goes wrong, you can tell us and get reimbursed. Or, you can tell your boss and get fired.

You might object that this arrangement is unfair, that it benefits NT sites over Unix sites. Well, that would be true if we only guaranteed against software failure. But if, for example, your sysadmin "forgets" to plug in the UPS; well, the other guys would cry "Fraud!", but it's all in a day's work for us. In fact, our system monitors will have a special mode that simulates downtime, so that you can get what's coming to you without actually disrupting your business. You get your money, we get our money (via the stock market), everybody's happy.

Not only is this a viable business plan in its own right, but has the potential to run the entire Internet economy. We predict that within a year, every big-name "dot com" site will be down 100% of the time, having us constantly reimbursing them. Why? Because it's cheaper—far cheaper—to have a machine that doesn't work than a machine that does work.

Say a company is losing $500 million every quarter, and plans to lose $500 million every quarter until someone else buys them. They can put a stop to this madness by simply signing up with us, shutting off their machines, and firing everyone. Whereas at 99.99% uptime they were losing $2 billion a year, at 0% uptime they'll be breaking even. They're making $228,311 for every hour of downtime. That's money they owe us.

We plan to be profitable within two years.

This document (source) is part of Crummy, the webspace of Leonard Richardson (contact information). It was last modified on Wednesday, January 24 2007, 02:26:00 Nowhere Standard Time and last built on Friday, March 24 2023, 05:00:27 Nowhere Standard Time.

Crummy is © 1996-2023 Leonard Richardson. Unless otherwise noted, all text licensed under a Creative Commons License.

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