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Those cases were extreme. Most dot-coms were not criminal—they were just incredibly stupid ideas suddenly flourishing like weeds in an untended lot. More typical was Pets.com, funded by Silicon Valley’s Hummer Winblad Venture Partners. Pets.com was the first online pet-supply store to make a national splash, in August 1999, but the battle was joined within months by PetSmart.com Inc., and brick-and-mortar-backed Petopia and Petstore Inc. A shining example of the grow-at-any-cost mantra espoused by one of its investors, Amazon.com, Pets.com blew an astounding $27 million on advertising in one year yet managed only $5.2 million in quarterly sales before an overpriced IPO that sent its stock out over a cliff and down. That collapse wasn’t much of a surprise, since the sales Pets.com did close were at a loss. In retrospect, perhaps shipping twenty pounds of kitty litter by next-day mail at a deep discount wasn’t the most sustainable of business plans, even if pets can’t drive. Pets.com shut its virtual doors in November 2000, with its omnipresent sock puppet as one of its most valuable remaining assets.

The dot-coms as a whole were little more than a publicly supported pyramid scheme, built on the long-true presumption that an even dumber investor was just down the road. With more finesse, Kleiner Perkins’ John Doerr called the process “the largest legal creation of wealth in the history of the planet.” And Ron Conway had the perfect strategy for taking advantage of the situation. At the height of the boom, as professional investors saw it, the entrepreneurs held all the high cards. If you asked too many questions or dawdled too long, they could walk down the block and get cash from someone else. Conway didn’t dawdle. He used his prodigious network, always pressing for the latest gossip on what was hot and then investing quickly. Then he worked the all-too-receptive media to hype his finds. Sometimes, he tried both tacks at the same place. One of Conway’s investments was in Red Herring, a San Francisco magazine covering the venture industry. Conway would give editorial director Chris Alden, who was an Angel Investors limited partner, an update on the fund’s new investments. Then he would walk down the hall and pitch the magazine’s news staff on his start-ups.

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