One day my phone rang.
This guy says, “Matt Zito, the IPOguys”…I am building the next generation Initial Public Offering brokerage platform to distribute shares directly to individual investors.
I’ve got patents.
I am going to pay you boys $1M.
How soon can you get down here?
We walked into this guys office on the New Jersey shore his name was something like Rinaldi.
An Italian.
Dressed to kill.
A little hottie was sitting there next to him pretending to be answering the phones.
I could tell right away there was nothing going on.
She was just a fixture for the day, probably a NJ stripper he hired for some day work.
It was a sweet office though right on the ocean.
The guy looked like he had money but we weren’t so sure.
“Look over here boys, see this. I am going to knock down these walls over here and put the IPOguys offices right here looking at the ocean.”
I am going to pay you boys $1M after we get the patents for the trading system.”
There it was, after the patents cleared.
There is always a loop hole with $1M in cash.
In the late 90’s I took a little side journey into day trading and started writing while I was building CollegeSkiTrips.com.
I co-authored “Trade IPOs Online” in 2001 with Matt Olejarczky one of my best friends at the peak of the dot com craze.
The leading business and finance publisher John Wiley and Sons, NY, NY was our publisher.
The book was advertised in the Wall Street Journal and placed in every Barnes & Noble and every major book store throughout the country.
I even remember seeing it one day in a Reykjavik, Iceland airport bookstore while I was traveling.
When you publish a book on the national stage weird shit starts to happen.
Offers for book tours, speaking engagements, cable TV appearances, requests for quotes from media outlets and crazy Italians offering you a million dollars.
My friend and I figured out how to acquire shares in companies prior to going public so we wrote about how we did it.
Our book showed the average person how to get their hands on IPO shares like the boys at Goldman Sachs and Morgan Stanley.
We would buy at the offering price then flip within 24-hours to 7-days making a killing.
When you heard stories about taxi drivers and soccer mom’s talking about IPOs and stocks they probably read our book.
We were minting money.
It was fun.
When a new company announced they were going public Matt & I would call each other and say “Hit it.”
We couldn’t open enough accounts.
We had individual, joint, SEP, IRA and business accounts.
On one trade in less than 24-hours I made more money than our lodge the Yellow Breeches House made in 1 year.
It was the dot com area and the new digital stock trading firms were all the hype.
The Internet was going to democratize the way IPO shares were distributed to investors and how companies sold shares in offerings.
It was the direct to investor model.
It was a great idea.
It had to work, right?
My friend and I had just been seen on CNBC TV by hundreds of thousands of people pitching our new book Trade IPOs Online.
We branded ourselves as the IPOguys and Matt Olejarczyk built us a great IPO stock prediction model.
The PR people and vultures were circling.
We had the hot hand.
We were a great team.
Forbes, CNN, Money Magazine and the leading financial magazines were asking our opinion on stocks.
It was crazy.
Then one day it all ended and our little money making scheme came crashing down.
The IPO market was in flames burning right alongside the Nasdaq stock market.
In about 2-weeks time it was all over.
It happened very, very quick.
The IPO market dried up.
Startups were going bankrupt left and right.
We never heard from our Italian friend and our $1M.
The press stopped calling.
I stopped trading IPOs.
Trade IPOs Online stopped selling in the bookstores.
I stopped writing about stocks.
The books royalty checks went to zero.
Two lessons you can learn from this story.
The first lesson I learned was that startup success and momentum can end very quickly.
One day you are on top of the world and the next it’s over.
When you are hot you’ve got to ride the wave because at some point it will all end or at least slow down.
We road the wave pretty good but made a few mistakes due to greed and that’s a story for another day.
Some things you just can’t control.
There was no control in stopping the market from crashing.
The success of our book Trade IPOs Online was tied to the stock market.
The second lesson and the most important is that if you want to scale an idea, a business or a product you have the best chances of success if your product is in a market that is growing fast or is trending.
Right now in the travel business Mobile is hot and the future.
If I was going to launch a travel company today I would launch a mobile-only travel product.
This is where you can have the best chance of succeeding in travel in the next 3 years.
Go Mobile or go home.