Until this last line, Lenny's pitch sounded like dozens of others I've heard. Everyone's going to be the Amazon, or the Yahoo!, or the eBay of the you-fill-in-the-blank business. Manifest destiny. Millions — billions even—of dollars overnight. Then sell out, or do an IPO and cash out.
“You know what makes this business so exciting?” he asked.
I waited. The warm spring air wafted through the open doors of the Konditorei.
“People are dying, that's what. It's inevitable. Death and taxes, right? Doesn't matter, rich or poor, what you believe, where you live, how you live, what you think. In the end, everybody has to die sometime, and we're going to be there, ready to provide the goods that people have to buy. They must buy! That's the point. You understand? This isn't about eyeballs visiting your site. These aren't eyeballs. These are people who need what Funerals.com has, because everybody dies. And when somebody dies, there has to be one final shopping day to assuage a life of guilt. To buy all these things, expensive things, high-margin things”—he thumped the table and stressed “things” every time he said it—“all these things, expensive things. And there's no getting around it. These are necessities aimed at the biggest aggregate market in the world—biggest because it includes everyone. Everyone.” He paused again for effect. “That's the business, and it's a dream business, because you don't have to convince anybody they need what you have. They know it, brother, they know it. We sell the solution everyone ultimately wants. No demand creation, just redirect it, to us.”
I looked around the coffee shop sheepishly. Lenny should have asked everyone in the Konditorei to sign nondisclosure agreements. Sure, he might never see these people again, but these are my homies. Connie rolled her eyes. Having overheard so many pitches herself, she knew the drill cold.
Next page: A shaded graph probably sold ready-made in any office superstore in the country. The shameless “Projected Growth” chart inevitably traces the outline of a hockey stick and assumes that a short period of investment will be obliterated by years of exponential increases in whatever— revenues, net income, profits, customers, corpses. Lenny's chart was all about revenues, certainly not profits, because this was, after all, an Internet business.
“Hundred million, three years, easy.” Lenny poked his pointer at the highest end of the graph. “Who knows how far it can go. The potential is unlimited, and in three years the exit strategy kicks in. May be an IPO. Depends on the stock market. Probably a buyout.”
“Getting to $100 million annual sales in three short years is no small task,” I cautioned.
I went on to explain that in the late ‘80s I'd been one of the founders of a software company, Claris Corporation, that grew to nearly a $90 million annual run rate in three years, and we were profitable to boot. That was when $90 million was $90 million, not like today when $90 million in stock options alone is chump change. I remember all too well how much hard work and good fortune must come together to make that happen.
“Selling software? No offense, but what was that? Hundred dollars a pop? Two hundred? This is thousands of dollars a sale. Thousands. I'm talking about an order of magnitude difference. No comparison. Besides, the numbers here only include the U.S. You understand that? The U.S. alone. But, people die everywhere, right, not just here? This is truly global. The world market for these goods is at the very least triple, quadruple the U.S. market—tens of billions of dollars, easy.”
I pictured some Tibetan ordering the hack-into-small-pieces-and-feed-to-the-vultures economy option. How would Lenny price that?
“Let me tell you something that I absolutely, positively, sincerely believe is the gospel truth.” Lenny leaned forward and focused on me with his dark gaze. “You would have to convince me” —he tapped on his chest every time he said “me” —“convince me that these numbers are a stretch. A stretch? I don't think so. Listen, somebody's going to do this. No doubt about it. And I say, why not us? Why not us?”
Lenny obviously didn't ask questions to get answers, and so I waited through his dramatic pause.
“And I'm not alone in this.” He flipped to a page of quotes from analysts and forecasters.
He started to read the first aloud, from Jeff Bezos, founder of Amazon.com, something about “the migration of the $4 trillion global economy onto the Internet.”
I held up my hand so I could read in silence. In a world inhabited by people who think the Internet and the universe are converging, no shortage of proselytizers are willing to endorse any kind of cockamamie scheme as the next big thing. But Bezos deserved to be read. I noticed that he made no mention of funerals or caskets.
“Have you been in a funeral home lately?” Lenny said suddenly.
Well, no, I confessed, I hadn't.
“Most people, they'd rather have a root canal. Research reveals that people think funeral homes are creepy places. Not good places for making decisions that can add up to the price of a small car. You're not there because something pleasant is happening in your life. You're there to see someone off, say good-bye. All the queasy questions you never ask yourself in daily life seem to be lurking in the next room, waiting to leap out and grab you by the throat. You know: What happens when you die? Is there life after death? Am I going to be called up next?”
“If you could answer those questions on the Internet,” I advised, “that would be a great business.”
“Oh, there are sites that claim to have the answers, but that's not what we're doing.”
Lenny would not be deterred, not with humor, not with questions, not with sidelong glances from strangers at the next table.
“Then there's the guilt: You didn't call enough. You didn't stop in enough. You didn't help enough. Whatever you did, it wasn't enough. Now, by God, your dearly departed dad is going to have the casket of his dreams.”
He paused and glared at me, slightly indignant. Was I supposed to be the grieving fool about to spring for the most expensive casket or the conniving funeral director profiteering from human suffering?
“Have you ever heard the pitch?”
“Your pitch?”
“No, no. The spiel you get in a funeral home.”
“No, I never have.”
He brightened. “All right, let me set it up for you. Imagine suddenly somebody's dead.”
Again, Lenny had everybody's attention.
“Somebody important to you. You're in shock. Grief has you on your knees. But you're the one who has to make all the final arrangements. So, first, you have to figure out where to go. You've never done this before. It's all new. If you belong to a church or synagogue, you could ask the priest or rabbi. They would probably steer you to one or two homes—and it's not unknown, you know, for the funeral home to give the church a little something in return, by the way—and so you go there. Or you look up the Yellow Pages. Or an acquaintance says she knows somebody had a nice time over to Joe Blow's place. So, tears in your eyes because a light is gone from your life, you head over there. You figure they're all the same anyway, right? First thing, they say, ‘We're here to help you.' Help you? I doubt it. They're thinking when you walk through the door, before you walk through the door, about everything they can sell you. Cremation? Sure. How about a $12,000 casket? Let's burn that up too, show some respect. Oh, then there are sealed caskets. I love this. Buy one of those, just a few bucks more, so you can seal the old guy away from all that water and dirt underground. But when you seal it, the anaerobic bacteria can have a feast. Putrefaction sets in ….”
A little far, I thought, for an eating establishment. They'll never let me back in.
“Lenny,” I interrupted, “it doesn't make sense to go down this road. Just give me the conclusions.” I didn't feel like hearing any more of the standard funeral home pitch.
“Wait a minute,” someone two tables over called out. “What about those anaerobic bacteria?” Connie shushed him.
“But you've never heard the spiel,” Lenny continued. “That's what you said.”
&
nbsp; “I don't need the experience. Most of your customers won't have had the experience either. If your market is only people who've been suckered in their first funeral, that's not a ready market.”
He was undeterred. From his file he pulled out a four-color brochure and spread it in front of me. I suppressed a grin. Even if I did seem to be the sole focus of his sepulchral sell, I had to admire his spirit. He knew what he wanted, and nothing was going to stop him.
I could more than relate to Lenny's single-minded sincerity. Years ago, when I was a young lawyer new to Silicon Valley, I represented a client in an arbitration hearing. Contrary to what you see in the movies or sensational TV trials, many legal proceedings are blandly cordial affairs conducted by lawyers who know each other socially, belong to the same private clubs, and break bread together. Trial histrionics can be as phony as professional wrestling. But I cared very little back then for the lawyer's code of civility. My job was to win for my client, and I was willing to do whatever that took, even if it irritated everybody else in the courtroom. I challenged nearly every one of my opponent's assertions and failed to show respect for my esteemed adversary, a friend of the arbitrator and, unbeknownst to me, a pillar of the local bar association. At the end of the hearing, my boss, the lead partner in the case, turned to me shaking his head. “You're a lawyer's worst nightmare. A guy works all his life to rise above the fray, and you go for the jugular. You don't give a damn, you just want to win.” He was bemused and dismayed at the same time. I suppose it's a privilege of youth to be admired and admonished by the wise guys who have gone before.
Lenny pressed on. The brochure showed the latest fashions in caskets: metal caskets in pink and blue with matching satin lining, walnut caskets lined in white satin, and even some Greek sarcophagus-looking numbers. They all had model names, like cars: Peaceful Rest, Solitude, Heavenly Gates.
“Is there one called Hand Basket?” I asked.
“Hand Basket?”
“As in ‘Go to hell in a hand basket’?”
He didn't even blink.
“Look at this. Look at this.”
He took out two pens and began writing—upside down so I could read what he wrote—dollar numbers next to each casket. It's a trick used by presenters to keep your attention while they write. So far Lenny had shown me his mastery of the Inevitable Growth Curve, and now the magic Upside-Down Writing Trick. Somewhere in his pitch, if I could wait long enough, Lenny would surely reduce the entire world to a four-cell matrix.
Granted, Lenny struggled a little in writing the upside-down numbers, switching back and forth between red and black pens. He wrote two shaky but legible numbers by each casket.
“The red number is the price typically charged by the funeral home,” he said finally. Those numbers ranged anywhere from just under $1,000 to several thousand dollars.
“The black number is the cost to the funeral home.” Those numbers were all in the hundreds of dollars, some in the low hundreds.
“The margins these guys get are unconscionable. Markups of thirteen, fourteen times cost. They get away with it because nobody feels like shopping around. Everybody thinks funerals have to cost thousands and thousands of dollars. But they don't.”
If no one felt like shopping around, I wondered what that meant for his business.
“What margins are you taking?” I asked.
“Good margins, but not rip-offs like many funeral homes. That's the opportunity. We can beat the funeral home prices and still make a tidy profit.”
“So this is a price-cutter's business. You're competing on price.”
He reached out again and flipped back a few pages.
“Price, convenience, and information. It's the Information Age, and information is what sells on the Internet. We give you the information you need about the product in the quiet of your home. We'll do the price comparison shopping for you in every major city, eventually every city and town. Federal regulations require funeral homes to quote prices over the phone. You don't have to go in person. So we can call them all up and compare what they charge.”
He paused. “Sometimes they try to refuse, make it tough, imply you really have to drop by. Those are the sneaky ones I love to get. I used to blast them on the phone, ream ‘em. Now I play along, let them refuse. Then I write the FTC and send a copy of the letter to the home. Afterwards, I call up and blast them, only now they got me and the FTC together, kind of a one-two punch, you know?”
Nice business practice. Obviously, something about the funeral industry had gotten under Lenny's skin.
“Pretty compelling, right?” he asked.
One of the regulars at the next table smiled as he rose to leave, carefully folding the business section of The Merc and cradling it under his arm. “Very compelling, kid, can I invest?” He winked at me as he walked into the sunshine, offering what was probably the only bite Lenny had gotten on the fundraising trail.
“How do you know people want to make these decisions on the Internet?” I asked.
Lenny beamed. Here comes the Internet pitch, I realized just a second too late. He gathered himself and once again reached over and flipped several pages in the “Presentation to Randy Komisar” binder.
“The Internet changes everything. Why drive to the bookstore to buy a book when you can order it from your couch and receive it FedEx the next day? Why buy airline tickets from your local travel agency when you can take control of your schedule and pricing on-line and accept your e-ticket at the gate? Why buy milk from the local market when you can check off a box on your screen and have it delivered by noon?”
Lenny's rendition of the future made me feel like a prisoner in my own home. “Do you have a graph of Internet profits?” I asked.
Lenny glared at me.
It was a joke. Few Internet companies are willing to discuss profits, let alone produce them. No one knows what a piece of the Internet is really worth, or which economic models will ultimately produce profits, but everyone's betting their patch is rich bottom land, and they're willing to place their bets before anyone has shown they can grow much of anything on it. The market will eventually sort it all out, but the land grab is on.
“You don't get it, do you?” Lenny said. “Let me explain.”
With that he launched into yet another rehearsed speech. Obviously he had developed micro pitch modules, and now I was getting the one on the current economics of the Internet, or the lack of them, and why the really smart companies were building brand and staking out territory, at the expense of profits. He said he'd never invest in a company that expected to make a profit in the near future on the Internet. Soon as they make a profit, they've fallen behind. It's growth or profits, etc., etc., etc. I wondered whether there could ever be enough day traders to keep these leaky boats afloat.
While Lenny blasted on, I imagined myself standing outside the Konditorei, looking in through the picture window to see the Pitchman wind up for another inning and wondering how the other guy, me, managed to sit so still as the ball came toward him. My secret was counting my breaths —in, out, in, out—as I planned my escape.
His idea was intriguing in some ways, but it was mostly just another plan for flogging merchandise on the Internet, and esoteric merchandise at that. It wasn't his intensity that irritated me. I expect that in people who found companies. They have to be a little irrational, passionate beyond analysis. If they don't believe in the face of doubt, they'll never make it. But Lenny was operating on automatic pilot set all the way to frantic. I'd have to tell Frank that Lenny and I talked but we never really connected. Frank would have to come to his own conclusions.
A cell phone rang. It wasn't mine—I don't own one. Lenny paused midsentence. For future reference, here was one way to interrupt his relentless pitch. It rang again. He opened his briefcase on the table, snatched out his phone, and snapped it open. “Lenny here,” he said, as he strode out the door without a word to me.
Rudeness is as good an excuse as any for an exit. I
pulled my jacket off the back of my chair with one last look at Lenny's open briefcase. It revealed a stack of files, an assortment of pens, a family picture stuck on with a paper clip, an economy-size bottle of Pepto-Bismol, and some kind of homemade sandwich—tuna salad?—oozing around the edge of the plastic wrapper. Well, I thought, somebody loves him enough to make a sandwich. Or, maybe he's brown-bagging to save money.
I told Connie I would be back later. She promised to hold my regular table. We both watched Lenny as he sat at one of the tables just outside the open door. Still oblivious to the possibility that someone might overhear, he argued and pleaded into the phone. “Wait! You didn't accept, did you? You said … six months. No, one more month … we made a commitment.”
“Sounds like trouble,” Connie said to me.
“Sounds like someone is bailing out,” I said.
“No, no, it's too important,” Lenny yelped. “Remember what we said after my dad's funeral.”
“Aha!” Connie said. “Someone did die. I knew it!”
“No, not a hundred,” Lenny argued. “Komisar's only number twenty-six.”
“Well,” Connie said. “twenty-six? You've moved up. You deserve a better table.”
“No, he loves it,” Lenny said. “I can see … he's in … Frank … fund it.”
“I get it,” Connie said. “You're rushing home to get your checkbook, right?”
Now I rolled my eyes.
“Listen … one more month. Just a month … please. Please. Give me …” He was still talking, but, to my surprise, his voice had downshifted, so we couldn't hear him, even as we both strained toward the door. He slumped, wordless, as though the wind had been knocked out of him.
“Is he all right?” Connie whispered to me.
He sat still, his head down, the phone dangling in his hand.
I had to admit this was a different Lenny. For a second, I was a bit worried about him.
Slowly, Lenny sat up and gathered himself. He put the phone back to his ear and spoke again. The words “two more weeks” were clear enough.
“So, Mr. Last-Chance Twenty-six. You were leaving?” Connie wanted to know. She looked at me hard. “How about another chai?” she asked finally. “On the house.”
The Monk and the Riddle: The Art of Creating a Life While Making a Living Page 3
