@LARGE
Digital evolution

By Scott Kirsner, Globe Staff, 3/20/2000

When you open a restaurant, your backers expect you to have a pretty good idea of how much you're going to charge customers and how you're going to ensure they pay the tab before walking out the door.

In the Internet economy, with market dynamics still very much in flux, there's far more flexibility. As long as you assure your venture capitalists that you're "exploring" various "schemes" for "monetizing the traffic," you're in good shape.

Shabbir Dahod, president and CEO of iWant.com, is a tech executive with a solid-gold pedigree. Separately, he has worked for Bill Gates and Paul Allen, the two original founders of Microsoft. Before starting iWant.com, he was a senior manager at Microsoft, working on a forthcoming Web-based version of Office. Before that, he worked at SuperCede and Asymetrix, both part of Allen's Seattle-based empire.

Now, he's trying to perfect a new model of buying and selling. Unlike eBay, where sellers post items for sale, iWant.com lets buyers post "wants" - items they're looking to buy. (Some disclosure: iWant has a partnership with Boston.com, this newspaper's Web site.)

iWant.com is like a digital version of the bulletin boards at the student union at college, or of the "wanted to buy" classifieds in some newspapers or magazines. The Internet, though, makes it easier and cheaper to publish these "wants," and it gives Dahod's company a modicom of control over how sellers connect with buyers.

Venture capitalists are intrigued by new wrinkles in e-commerce. They're particularly fond of businesses, like iWant.com, that are following in the footsteps of Priceline.com and pursuing patents for the way they match buyers and sellers.

Last year, Dahod raised $3.3 million, mainly from Matrix Partners of Waltham, and he's on the verge of announcing a second round of $7 million, which includes Matrix and Pequot Capital Management.

The way iWant.com makes money, right now, is by charging sellers $9.95 per month to get access to its database of "wants." In addition, there's a "success fee" of anywhere between 50 cents and $75, depending on the size of the transaction. Listing a want is free.

While it's relatively easy for iWant.com to collect the monthly subscription fee, it's more difficult for the company to track which transactions are actually consummated. That's because buyers and sellers often wind up talking on the phone or exchanging e-mails outside the iWant system.

So sellers are bound only by honor to pay those "success fees." Dahod admits that less than half of them do pay, and says, "I think there is a little bit of a hole in the bucket. We're working to close it."

One way might be to offer sellers an online invoicing and payment system so that iWant.com would have a more solid sense of which transactions actually close and how big they are.

Dahod says iWant.com has experimented with different ways to collect revenue, such as charging sellers for each lead - each buyer "want" - they received. But he said sellers have responded poorly to that idea.

"We're constantly going to be shifting and adapting," he says. "You're looking for a unique value proposition, a way to weave yourself into the lives of your customers. You have to keep your eyes and ears open."

Before you begin to cast judgment on this kind of strategic squishiness - as I was inclined to do - it's important to remember that the essence of entrepreneurship is trying lots of different things until you find something that attracts lots of customers and keeps them happy.

And in today's Internet ecosystem, those natural entrepreneurial mutations tend to be, well, a tad more dramatic than you find in the offline world. When was the last time you went to a restaurant, for example, that weighed you on the way in and the way out and calculated your bill based on the difference?

Besides: Dahod reminded me about the origins of Microsoft. "Bill Gates and Paul Allen didn't know what business they were in. They thought they were making tools for software developers." It wasn't until companies like Compaq started to clone the IBM PC that a market emerged for DOS, the operating system that led Microsoft to preeminence.

It's a precedent Dahod, and every other Internet CEO, is hoping to follow.

Sorry, wrong number

When I saw the headline last week that read, "Bell (Atlantic) says over 40 percent of phone lines wired for DSL," let's just say my nasal passages were unintentionally irrigated with some hot herbal tea.

After missing a deadline last year for installing the high-speed DSL lines throughout eastern Massachusetts, Bell Atlantic is alleging that the technology is now available to about 1.9 million households. Also, they say that - put your hot beverages down now - they are "beefing up" customer and technical support.

I went to the Bell Atlantic Web site last Tuesday, the day the story appeared, to find out whether DSL was actually available to my home in the North End. I typed in my phone number and got a message that said, "Sorry ... at this time we are unable to determine if Infospeed DSL is available. You may try checking your phone number later or simply contact us ..."

I called the toll-free number they gave me and after 15 minutes on hold - remember, I am a customer who is trying to fork over more money to the phone company - a rep named Dawn picked up the line.

Dawn checked both of my phone lines and said, "We're coming up not qualifying. You probably can not receive DSL at all."

Would I ever be able to receive DSL in my blighted urban habitat, which is also not served by MediaOne's high-speed Internet service?

"By the end of the year," Dawn told me. "We're putting in another 6,000 line feet." She also told me that if I wanted to convert my ISDN line to a less expensive, faster DSL line, they would have to disconnect it - "strip the phone line" - for three weeks.

That sounds more like the phone company I know and loathe.

Scott Kirsner is a Boston writer and a contributing editor at Wired, Fast Company, and Boston Magazine.