Book Excerpt: 'dot.bomb'

Craig Winn looked sadly at the sales manager and apologized he hadn't communicated better. What Value America wanted, he informed them, was the whole line of HP products. HP, he told the assembled team, gave Value America the credibility it needed to succeed. The HP team looked at each other and then at Winn. No way were they giving over the entire line of products to a store that wasn't even a store yet. Winn left without a deal. Scatena and Hunt waited until they were inside the elevator to berate Winn. Then they both pounced. How could he have done that? HP was giving Value America what it wanted! It would have meant credibility! It would have meant more money! Instead, the team was going home empty-handed.

Winn didn't even hear them. He had just seen the promised land. He knew, he just knew, that HP would agree to his terms. He had seen what they wanted to do, and he knew Value America alone could give them what they wanted. He also knew Value America had a solution unique to the entire Internet space. If HP was as smart as Winn believed them to be, they'd be back. They wouldn't have a choice. Within a month, HP sent out a team to do due diligence on Value America. By the end of that trip, HP agreed to sell its entire line of consumer and small-business products through Value America — even though Value America didn't have a store. Winn had his break. Because HP recognized Value America didn't have a store and wasn't likely to be driving millions of dollars of sales right away, it gave Value America the option of purchasing HP products through any one of five major distributors instead of having HP ship directly. It wasn't exactly what Winn had envisioned, but it presented him with a new opportunity.

Each of the five big distributors — Merisel, Tech Data, United Stationers, New Age, and Azerty — wanted the HP contract. As with all things Internet in mid-1997, it wasn't about the actual dollars the contract represented, but rather the dollars it would represent once things got rolling. Winn knew this. He contacted each of the distributors, telling them he'd won the contract to sell HP online and he must choose one of the five distributors HP used. There was, Winn told each company, an easy way for Value America to make up its mind. Whichever distributor did the most to help Value America get more brands in the store Winn would select for the HP contract.