by Freddy J. Nager, Founder of Atomic Tango LLC & Survivor of Multiple Dotcoms
So I’m walking through my neighborhood counting the foreclosure signs when I develop this mighty thirst. Fortunately, I find a lemonade stand run by an enterprising six-year-old named Zucky. Just as I’m about to pay $4 for a cup (obviously, Zucky graduated from the Starbucks Preschool of Management), I see another lemonade stand across the street run by another enterprising six-year-old. This one, however, has a sign saying “Free Lemonade.” Free? I like free. Free is good. Plus, I’m trying to save enough money to fuel up my car. So I cross the street to the land of the free, and find myself talking to Zucky’s arch rival, Sergei…
Freddy: So this lemonade is really free?
Sergei: Can’t you read?
Freddy: I’m just wondering why you’re giving away free lemonade.
Sergei: It’s a business. Duh.
Freddy: I see. But how are you making money from it?
Sergei: Double duh. The point is not to make money, but to develop a user base.
Freddy: A user base?
Sergei: Yep. If I get enough customers coming to my lemonade stand, I can sell ad space to sponsors.
Freddy: Uh-huh. So do you have sponsors now?
Freddy: Kinda what?
Sergei: See that stack of flyers from the Clique Mortgages Company?
Sergei: If you take one, the company pays me one cent. It’s a pay per Clique model.
Freddy: And that one cent gives you a profit on the lemonade?
Sergei: Hell no. The lemonade costs me 10 cents a cup. But I’ll make it up on the volume.
Since I was a liberal arts major, I assume his math is correct.
Sergei: (leaning in and whispering) But hey, mister, can you keep a secret?
Freddy: Sure. (I don’t mention that I’m a blogger.)
Sergei: My friends come by every day and take all the flyers to make spitwads. That way I get paid by the Clique and I don’t have to give away any lemonade.
Freddy: So you’re telling me a bunch of six-year-olds are doing all the Cliquing. That doesn’t exactly help the mortgage company.
Sergei: That’s not my problem. If the advertiser is too cheap to pay up front, that’s what they get.
Freddy: But that’s not exactly ethical…
Sergei: (shrugging) It’s legal.
Freddy: Why don’t you just throw the flyers away yourself?
Sergei: What do I look like, a crook?
Freddy: Right. Well then, give me a cup of lemonade. And a flyer.
Sergei: Cool, but first you gotta fill out this form.
Freddy: Form? Why?
Sergei: Man, you are one dense dude! I gotta prove to my future sponsors that I got a user base. Plus, all I’m asking is your name, email address, phone number, and a little demographic info.
Freddy: You know a lot for a six-year-old.
Sergei: I watch CNBC.
Freddy: So you’re the one… Now, how do I know you’re not going to sell my personal information to someone else — or call me up in the middle of the night?
Sergei ducks under the table and re-emerges with a stack of papers the thickness of War And Peace.
Freddy: I’m not going to read all that.
Sergei: I thought so. Now do you want the lemonade or what?
Just then, Zucky, the kid at the original stand across the street, signals me over. He now has a sign that says “Drink lemonade, get paid!” Hmm, this is even better than free. I go back over to his stand.
Freddy: Let me get this straight. I get your lemonade — and your money?
Zucky: Yeah, though it’s not exactly my money.
Freddy: Whose is it?
Zucky: You know my dad, Victor Cunning?
Freddy: Oh yeah, VC.
Zucky: He’s financing this joint.
Zucky: What else is he gonna do with his money — invest in real estate?
Freddy: Good point. Speaking of which, what is the point of this business?
Zucky: Oh, my dad plans to sell it once I reach critical mass.
Freddy: Critical mass of what?
Zucky: Users, stupid. Once I build up a big enough user base, some major corporation will want it.
Freddy: What is it with you kids and user bases?
Zucky: Dude, did you break all the bulbs in your chandelier? Building a big user base is a best practice!
Freddy: Why is that a best practice?
Zucky: Because Sergei does it and he’s the market leader.
Freddy: Zucky, just because a market leader does something doesn’t make it a best practice.
Zucky: It does.
Freddy: Does not.
Freddy: Does not. Listen, if Sergei were to jump off a cliff, would you do the same?
Zucky: That’s so patronizing! Stop talking to me like I’m six years old!
Freddy: You are six years old.
Zucky: Oh. Right. I use words like “patronizing” and I forget.
Freddy: In any case, why would a big corporation buy a money losing operation?
Zucky: Lotsa reasons. They wanna diversify. They wanna appear cutting edge by getting into the next big thing. They wanna invest their liquid holdings before the dollar depreciates anymore.
Freddy: You’re pretty savvy for a six-year-old.
Zucky: And you’re pretty dopey for a sixty-year-old.
Freddy: I’m forty.
Zucky: Same difference. Anyway, the big corporation has big resources, so they can suck up the losses longer, and then when there’s a recession, they just write down the investment so that it’s all bundled up with a whole lotta other losses at the same time. That forces management to do a lotta cost cutting, and Wall Street loves cost cutting, so the CEO gets rewarded a fat bonus.
Freddy: Only in the mind of a six-year-old.
Zucky: Or a corporate CEO. So, you gonna have a lemonade or what?
Freddy: Do I need to fill out a from?
Zucky: That’s stupid. No, just put this in your pocket.
Zucky hands me a lint-covered Oreo.
Freddy: What’s this?
Zucky: It’s a cookie. I keep track of how many users I got with cookies. Just don’t throw it out.
Freddy: Sure. Whatever.
Zucky: And here’s your lemonade and a penny.
Freddy: Gee, a penny. How generous.
I drink, but immediately gag and start spitting up pink chunks of meat.
Freddy: There’s Spam in this lemonade!
Zucky: Those are my advertisers.
Freddy: This is terrible!
Zucky: What do you want for less-than-free?
Freddy: Not Spam in lemonade!
Zucky: Well, if you want an ad-free experience, you have to upgrade.
Freddy: How much is an upgrade?
Zucky: Four dollars.
Just then Zucky’s father, Victor Cunning, appears with another adult male in a suit.
Zucky: Whassup, pops?
VC: Hey, Zucky. I’d like you to meet the new manager of the lemonade stand.
Zucky: What do you mean? I’m the manager!
VC: Well, Zucky, what’s best for the business is if you’re relieved of your day-to-day responsibilities so you can focus on, uh, serving as a consultant to us.
Zucky: Consultant?! But this is my lemonade stand! I started it! I don’t want to consult my own company!
VC: Technically, it’s MY company. But don’t worry, Zucky, this guy is an MBA.
Zucky: Great, there goes the neighborhood.
As Zucky sulks, Sergei starts shouting from across the street.
Sergei: Hey, user dude, my lemonade is ad-free and I’ll pay you a dollar to drink it!
Zucky: You’re paying him a dollar?! Are you crazy?!
Sergei: Winner takes all!
Zucky: Fool! You’ll drive us both out of business!
Sergei: Maybe I will, maybe I won’t.
Zucky: You’re a unitard!
Sergei: I know you are but what am I?
And that’s when both boys start scrapping in a flurry of fists and feet. I break up the fight and only suffer moderate injuries in the process.
Freddy: Boys, boys! Don’t you see that you’re just repeating the mistakes of the first Lemonade Bubble?
Sergei: There was a first Lemonade Bubble? When did that happen?
Freddy: Oh, around 2000, 2001.
Zucky: Dude, that was more than five years ago.
Freddy: Yes. So?
Sergei: Well, don’t you know, if a mistake happens more than five years ago, it’s OK to repeat it.
Zucky: Right, Sergei. That’s why your mom’s pregnant again.
The boys laugh and start walking off together, but I can hear their words on the quiet street.
Sergei: That guy was such a nimrod.
Zucky: That’s why he’s a user and we’re the entrepreneurs.
Sergei: Hey, Zucky, that just gave me an idea.
Zucky: Whatcha thinking?
Sergei: We can cut costs by making the nimrods provide their own products!
Zucky: You mean —
Sergei: User-generated lemonade!
Zucky: Yeah! We just build the ultimate stand!
Sergei: And promise them a share of the revenue!
Zucky: Yeah! Like one-tenth of one-tenth of one-tenth percent!
Sergei: How much is that?
Zucky: I don’t know, I haven’t learned fractions yet.
Sergei: How will we get it started?
Zucky: Easy. First, we’ll steal some lemonade from the store.
Sergei: And we’ll take the labels off.
Zucky: And we’ll tell the cops that the users provided it.
Sergei: And then we’ll put some chairs around the stand, and the users will bring lemonade so they can talk to each other!
Zucky: Yeah, adults have trouble socializing, so they need all the help they can get!
Sergei: We’ll call it… social wet-working!
Zucky: I love it!
Sergei: Awesome, huh?
Zucky: Yeah! So I’ll have my lawyer call yours?
Sergei: Sure — but let’s go to my place and watch Hannah Montana first.
Zucky: Hannah Montana?! She’s so 2007.
Sergei: I know, dude, but I just dig on older women… Hey, got any of those Oreos left?