Dot-Com Don Quixotes

Against all odds, some cockeyed optimists keep making big plans, hunting down venture capital, and dreaming the impossible dream

Lee Eygabroad is a digital believer. The 29-year-old Philadelphia entrepreneur studied computers in college and met his wife on the Internet. After graduation, he worked as a cook but was injured in a kitchen accident in 1997. He toyed with the idea of offering individual computer-training classes, then ventured into the digital-production field in 1999, when he made a CD-ROM of his 10-year Oak Harbor (Wash.) high school reunion, selling 110 copies to classmates for $25 a pop. The dot-com bug had bit him.

Now, Eygabroad is building his dream site, called EZalumni.com. As he envisions it, the site would connect all high school graduates with fellow alums. It also would accept orders to convert schools' yearbooks into the CD-ROM format, using Eygabroad's "very personal" designs. "This has the potential to be really great and make a lot of money!" he enthuses about the site.

NOT FAZED.

  Never mind that he launched EZalumni.com last December, in the thick of the Internet crash. Never mind that Eygabroad is taking on a competing site, ClassMates.com, that already has 14 million users, as compared to 600 visitors per week for EZalumni. He's not fazed in the least. In fact, Eygabroad is looking for $250,000 to make EZalumni into a real business. And that's just pocket change, he believes. After all, he believes this company has the potential to go public someday. How soon would the public offering take place? Eygabroad gets dreamy again. "The stock isn't going to change much until I go global," he explains.

While far fewer Lee Eygabroads are seeking venture capital and planning to conquer the world these days, they're still out there, dreaming impossible dreams. Meet some of his fellow dot-com Don Quixotes. Dimitriy Deyth, 41, who lives in South Boston, ignores the bleeding losses and dwindling ranks of online grocers as he pushes on with a search for funds to sell Russian foods online. His ultimate goal is to set up his own store. His experience? Working as a delivery driver for online grocery site Peapod.com.

Another entrepreneur is working hard to put together a business plan for a site that would conduct weddings in cyberspace. Yet another, Mark Zeabin, 25, of Nelson, British Columbia, is schmoozing investors in case he wants to take his online business public. That would be making furniture that easily can be converted into caskets.

"UNLIMITED MONEY."

  Oh, the dream will always be there. But the money is another matter. A year ago, investors had "unlimited money for dot-com companies -- now the market is completely gone," says Robert Nelsen, managing director of ARCH Venture Partners. Even entrepreneurs with ideas that would have attracted pots of cash before the online apocalypse are having a hard time.

Just ask Mike Rosen. A 41-year-old serial entrepreneur working on his seventh business, Rosen came up with an idea for a three-dimensional browser five years ago. The browser has a virtual-reality feel and allows users to view five or more pages of text or pictures at once. Rosen's focus group -- his three sons, ages 13, 11, and 4 -- love it.

On the day last April that the Nasdaq tumbled 300 points, Rosen got $2.75 million from an angel investor. It was a stroke of good luck, he realizes, now that he's looking for more money. He has given presentations to venture capitalists in his hometown Philadelphia and in Virginia and Texas, with no takers yet. His money will run out in six months. But he's far from giving up. "I thrive on stress," Rosen says.

FACING DISAPPOINTMENT.

  Others should be so lucky. David Teten, a 30-year-old Harvard Business School graduate and chairman of the world's first investment bank for domain names, is looking for a new job after his venture, GoldNames, which trades and appraises the names, proved a disappointment.

Teten hoped GoldNames would become "the Goldman Sachs of domain names" and go for an IPO faster than it takes to say teten.com, the first domain name he ever registered. His idea looked like a good one in 1999 and 2000, when domain Wine.com went for $2.9 million and Business.com went for a cool $8 million.

Teten got his seed funding in December, 1999, assembled a blue-chip team, and built his company to 30 full-time and 20 part-time employees and three offices, in Jerusalem, London, and New York. Then the stock market tanked. After contacting 550 angel investors and venture capitalists over the summer and getting nowhere with his $10 million plea, Teten laid off all but one full-time and one part-time staffer on Sept. 21.

JOB HUNTING.

  In hindsight, the problems with his business model were there to see. As it became clear that the number of domain-name suffixes could quickly expand from .com, .org, and .net into the dozens, and each domain could be offered in many countries, what appeared a priceless brand asset became merely a commodity. Today, domain names trade for far more modest sums, and Teten admits he's running the company as a "neighborhood corner store." GoldNames is profitable but, to the entrepreneur who hoped for billions, a tad pedestrian. Thus, Teten, who now lives in Israel, is looking for a CEO job, possibly in New York. He says he wants to run a high-growth business. Maybe a dot-com.

Some Don Quixotes, however, have embraced a downsized vision of their dream. Francie Ward, 54, started her Idea Café as a forum for small businesses in 1995. As Internet fever spread, she envisioned building her company to 50 people in two years. But a year of traveling from her Grants Pass (Ore.) home to San Francisco, New York, and Washington, D.C., to meet investors turned up no backers.

Giving up on the idea of venture funding and fast growth, Ward financed her dot-com by refinancing her home and using credit cards -- just like a traditional entrepreneur. With her own lifestyle on the line, she decided to "continue bootstrapping and focus on things that produce revenue." Today, Ward has five full-time employees and works with six independent contractors. She has the most-visited forum for small business on the Web, with 1.5 million page views per month. In 2000, she posted a modest profit.

ACQUISITION HOPES.

  But these days, her aims for Idea Café aren't so lofty. She hopes to use the site for marketing products, such as books on small business. That could still be enough to attain one goal -- being acquired by a larger company. "You really have to develop a way to do whatever you do very frugally," she says.

EZalumni's Eygabroad is one of Idea Café's frequent visitors. And he may end up following Ward's example. The world has changed -- dramatically. But when in the depths of despair, to dream the impossible dream may increase the odds of survival -- and of better days ahead.

By Olga Kharif in New York

Edited by Alex Salkever

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