hundreds of other websites all published articles about DutchBid. Many of them are still online, just do a Google search for Kevin Mitnick and DutchBid and you’ll see them.
I spent the next several hours calling back reporters and answering questions. They basically just wanted a quote from me, so I tried to change up what I said to each of them, while still giving the same answer.
By the end of the day, a bidding war for Mitnick’s things was underway. It was amazing. One of his two ID cards was already in the thousands – the bidding barely reached a grand when eBay shut down their auction. Something even better was happening, too. People were listing new items on the site. In just 12 hours, over 500 new items were listed up for auction.
This was all happening shortly after I filed my lawsuit against George. In the midst of the media storm, I received an email from him. It said, “Well done, you son of a bitch. Too bad I don’t have anybody working for me that was smart enough to think of this.” I liked getting that email. It was his way of giving me a pat on the back, despite our turmoil.
Within a few days, over one million unique visitors had come to DutchBid. I knew these types of news stories have a short shelf life, so I started thinking about ways to keep the spotlight on the site. Clearly, many other small auction sites were taking notice. I thought this might be a chance to leverage the press I was getting and make a deal to merge with one of those companies.
After a bit of searching, I found the perfect target. It was a site that had just announced they would be shutting down. You might ask why I would be interested in a company on their way out. It was their assets. The site, called Gold’s Auctions, had tens of thousands of registered users and about 100,000 items listed. That’s what I was after.
I contacted the owners. Sure enough, they had seen the media frenzy surrounding DutchBid and the Mitnick auctions. They were impressed. Gold’s was pulling the plug on their site, because of debts they were unable to pay. Their bad decisions spelled opportunity for me. I made them an offer. It was a small offer that involved absolutely no upfront money. I didn’t have any money to give them. What I did have was the dream and I sold it to them. I offered them a small percentage of the company, in exchange for their members and listings. They accepted. We signed a letter of intent that same day.
The following day, Gold’s sent an email to their members, alerting them that they would soon be transferred over to DutchBid. The response was tremendous. Thousands of members didn’t wait to be transferred, they came and registered on their own. CNet got word and their headline read, “Small Net Auction Company Goes for Gold”. This drew even more traffic to the site.
A week later, a slight hiccup. The owners of Gold’s told me they were afraid to transfer the member base over to me for fear of violating their privacy policy and FTC regulations. My attorney assured them the way the deal was structured, it wasn’t a transfer – I was buying the company and merely changing software. They didn’t agree and, eventually, the deal went sour. CNet’s next headline was “Gold’s Merger a Tarnished Flop”. Witty.
Despite the merger not coming to fruition, my site still received a lot of press and almost half of the Gold’s users registered for accounts on their own. They also started listing items in droves. The Mitnick story was still being reported all over the Internet and was still bringing in tons of traffic.
I’d like to say this story ended with me making millions and eventually selling the company to some big corporation in Silicon Valley, but it didn’t. My web hosting company was billing me quarterly. Things were much different back in the year 2000. Bandwidth was super expensive. DutchBid was also built on the ColdFusion platform, which was the most expensive kind of hosting, at the time. When February rolled around, I received a call from my hosting company’s owner. He said he had never seen traffic like this and my server bill for January alone was $48,000. I nearly had a heart attack. I told him I didn’t have that kind of money, but what I did have was a fast growing cash cow that was starting to generate money. He wasn’t impressed. He wanted to be paid right away. I tried to make a deal with him, but it was cash or DutchBid goes away.
DutchBid went away.
In the end, I was no better at running an auction site than the folks at Gold’s.
I often look back at those days and wish that I had known then what I know now. A site generating the traffic that DutchBid was in the year 2000 was surely worth a fortune. There are so many ways I could have monetized the traffic better, including simple banner ads that paid per view. Back then, targeted traffic was getting upwards of $9 per thousand banner views. I would have had tens of millions of views each week. There were also venture capital firms that were handing out money by the truckload. A few phone calls probably would have been all it would take to get some cash thrown my way, but I was still wet behind the ears and didn’t know the slightest about the ways of the web, yet.
CHAPTER 6
ASK DANIEL NEGREANU
Fast forward a few months. With a little money in my pocket from the George lawsuit settlement, I was in no hurry to find another real job. Instead, I occasionally built websites for local businesses and played a lot of poker.
On the morning of September 11, 2001, I was sleeping on my couch. The phone woke me up. It was my mother asking if I had seen that a plane had hit one of the World Trade Center towers. I immediately turned on the television, just in time to see a second plane crash into the second tower. Like most of the world, I spent the next several hours glued to the TV. When I couldn’t take anymore, I headed out to the casino. A bunch of us sat around the poker table talking about the events. All the TVs were on news channels. I felt the need to go back to my couch and watch more.
I have always been a news junky. Producing video in Somalia was the rush of a lifetime for me. I knew what had just happened in New York was going to change the world forever and I wanted to somehow be a part of it. News would be a good way.
The next morning, I called the news director at WLOX, the ABC affiliate in our area. We met that day and I started producing the 5:30 news a couple of weeks later.
A producer decides what stories will go into the newscast. In a small market, the producer also does all of the writing. I bang the words out on my keyboard and the anchors read it on TV.
I loved creating a newscast, but I kind of felt like behind the scenes wasn’t the place for me. My anchor, Dave Elliot, encouraged me to make a demo of me reading the news behind the desk. I did and thought it went well, but it didn’t matter. The news director wouldn’t look at it. He said I was hired to be the producer. I was ok with that, as just loved being a part of the news team. However, it was taking its toll financially. The job paid dismally. My take home wasn’t enough to pay my bills. I was using the George money to make up the difference The work days were long, so there wasn’t enough time to do freelance stuff on the side. After just a few months, I had to quit and there went my career in news.
I went back to building websites and playing poker.
Back in 1991, when I found out Uncle Sam was stationing me at Keesler Air Force Base, I was a little uneasy. I grew up in Boston. We had everything from professional sports to enormous shopping malls and everything in between. There was always something to do. What would there be to do in Biloxi, Mississippi?
The answer was “not much”. At least for a little while, anyway.
Shortly after I settled in, there was a statewide vote to allow gambling. Literally, one day after the measure passed and went into effect, the first casino opened its doors. Biloxi got interesting, fast.
I
