While I was sitting on the dusty office floor, feeling more sorry for myself than I probably had the right to, the wider Internet industry was having a crisis of confidence of its own.

America had been hit by a credit crunch following an over-eagerness by lenders to loan money to what were called ’sub-prime’ borrowers. Think Ocean Finance customers in pick-up trucks. Amazingly, many of these ’sub prime’ borrowers had defaulted on their loans and the American financial industry had gone into meltdown. It’s a pretty solid rule that when America catches bird flu, the rest of the world stops eating Chicken McNuggets and so there were real concerns among financial experts that we might be heading for a global recession.

For Internet investors, this uncertainty had started to affect their own confidence. What if the companies they were investing in were part of a second Internet bubble? And what would happen if a global downturn made that bubble burst?

Pop!

A clear sign of this new level of uncertainty was the number of discussions being held on Internet panels with subjects like ‘Bubble 2.0?’ and ‘Are we heading for another dot bomb?’ and ‘Do you want to consolidate all of your debts into one manageable monthly payment?’ An even clearer sign came when Robert changed the final question at his Internet People networking dinners.

15.1

Robert ’s Internet People dinners are an opportunity for people in the same sector to get together with their peers to discuss the important issues affecting their industry. Most industries have these kinds of events, to a degree, but entrepreneurs seem disproportionately keen on them. Adam Street alone plays host to at least three industry-leading ones; there’s the Mandrake Club, founded by Channel 4 chairman (and former head of Pizza Express) Luke Johnson and The Carphone Warehouse’s David Ross; there’s the Supper Club, Duncan Cheatle’s dinner club for successful entrepreneurs whose businesses turn over at least £1 million a year; and, of course, there’s Robert’s Internet People dinners, where influential members of the Internet sector gather around a table over a three-course meal and excellent wines to thrash out the future of new media.

Some wag once said that the secret to organising a good networking dinner is to seat each guest between someone they’ll want to work with and someone they’ll want to sleep with. They clearly had never been to an Internet dinner: the industry remains a sausage fest and, despite Robert’s best efforts, it’s rare that there’s more than one female face among the ten guests at each dinner.

It ’s the calibre of these guests that makes an Internet People dinner either a roaring success or a total washout. The beau ideal is to get a good mix of people, representing different areas of the industry. Too many media types and the topics of conversation tend to focus around whether content or commerce is king and whether advertising or paid subscription is the way forward. Too many tech people and the questions are all centred around whether the latest Facebook or Google feature will make it easier or harder to share data between social network platforms – or whether ‘Ruby on Rails’(( The programming language that many next generation web sites are built with.)) is a better platform for web development than some other sodding thing. Too many marketing people and after ten minutes you’re clutching your bread knife ready to kill everyone in the whole room. (Although, to be fair, you do leave with a bigger penis and a foolproof investment in the Democratic Republic of Congo.)

A few days after we ‘d made our decision to go it alone without angel funding for the time being, I was invited to attend a dinner with what might just be the perfect storm of attendees. Nic

Brisbourne was there, as was Martin Brennan from First Capital (another VC firm). Also, Bebo’s Paul Birch; Tom Hughes from Milk Round, a job site for recent graduates; Andy Evans from online ad company Net Communities; and Ien Cheng, a former journalist and now the managing editor of the online version of the FT . The female face at the table belonged to Julia Chalet from WeeWorld which, (despite having the third most porny name after Cyberbritain and Pleasure Cards, is actually a site where you can create little cartoon representations of yourself-’Wee Mees’- which can then be used as your online identity or, as it happens, be printed on the back of your Moo Cards). Finally, there was a really drunk guy who claimed to work for a big merchant bank. I’m a great believer in every dinner having its own drunk guy from the start – someone who is absolutely trashed before the wine has even been uncorked. That way no matter how drunk anyone else gets, they can always feel ever so slightly superior when they wake up in a ditch the next morning without their laptop or their shoes. At least they weren’t as bad as the drunk guy!

My reason for attending was simple: if anything was going to make me remember why I wanted to be an entrepreneur, it was going to be this dinner, with this crowd.

Every dinner begins the same way, with everyone around the table introducing themselves and suggesting a topic for discussion. The topics are all written in a notepad and worked through one by one, in order. There is then one compulsory question – added by Robert – at the end that has to be answered by all attendees. These questions act as a fascinating bellwether for how the industry is doing.

For the first year and a half of the dinners, the question remained constant: ‘In one minute, tell the rest of the group what you believe the future of the Internet will be.’ This became something of a running gag as most of the regulars trotted out the same answer every time, to the amusement of the other regulars and the bemusement of newcomers. My own theory was that the Internet would one day become as ubiquitous and unremarkable as electricity. Whereas today we think of businesses being ‘Internet businesses’ or ‘traditional businesses’, the future would see the distinction removed. Every business would be an Internet business and every piece of technology, from phones to alarm clocks, would be connected in some way to the huge global network, allowing everyone and everything to talk to the other. Like electricity, everything will in some way be powered by the Internet and we’ll only notice it when, for some reason, we’re cut off.

It ’s actually a relatively dull answer, but the fact that I repeated it every single time made it a source of rich amusement for my fellow diners, to the extent that whenever Angus overheard anyone talking about something that was going to be ‘the future’ of anything – he’d say ‘just like electricity, Paul’, simply to wind me up.

One day, after a year and a half, the question changed to something new: ‘In one minute, tell the rest of the room which web services you use every day.’ This change reflected the fact that future gazing had – ironically – had its day. The Internet was no longer just a load of exciting possibilities – it was now a load of exciting realities. The future was now (albeit we were still waiting for our hover-boards and self-drying trainers)!

But tonight Robert had a surprise for us all. A new final question. Only the third in two years.

‘Going round the table … “Is the Internet industry about to experience a boom, a crash or will it stay the same?”‘

Around the table we had venture capitalists, a former financial journalist, several entrepreneurs and even a drunk banker. If anyone could answer that question, then they were probably sitting in this room. It fell silent as everyone was forced to confront the question that, really, none of them wanted to answer. The drunk banker tried to top up his glass from the empty bottle in front of him and decided that he would answer first. Internet People events, like most similar dinners, are strictly off the record, so how everyone voted is a secret. But the results were split like this. Of the ten people around the table:

- six of us believed things would carry on the way they were for a few months, with few big investments or acquisitions, and then when everyone realised it wasn’t a bubble there would be a sharp upward spike

- three of us believed that there would be a dip, and then, after a few months, a spike

- one of us didn’t really understand the question, but wanted to make it absolutely clear that he considered us all his best mates.

The confidence in the room was heartening, but perhaps not surprising. I mean, who around that table was going to say, ‘I predict that in two months I’ll be living in a cardboard box, eating cat food?’ That might have been exactly what I was thinking but who would be stupid enough to actually to say it? These things tend to become self-fulfilling prophesies.

But it was more than just confidence, as one diner explained.

‘The thing is we’re at a point now – towards the end of 2007 – where lots of companies are going to run out of their first funding round very soon.’ He rattled off a list of companies we were all familiar with and whose funding was about to run out, to nods from around the table. ‘So what’s going to happen then?’

Another diner chipped in. ‘They’re either going to have to find an exit or they’re going to die.’

By exit he meant they’d have to go public or sell to a bigger company. Essentially, the argument was that companies were about to run out of money, therefore they were going to have to go public – leading to a big spike in dot com companies going public or getting sold for millions (or billions), and thus creating a boom. The possibility that, by the same logic, the exact opposite could happen didn’t seem to have occurred to any of them. Rather, it had occurred to them but they had all blocked it out. The only way was up.

15.2

Self-confidence is a powerful weapon for the entrepreneur but there’s a danger it can turn into denial. Back at the office, I was very aware that we were tiptoeing a fine line between the two. By waiting a bit longer before we paid non-essential invoices and pushing hard for the bank loan we could just about stay in the black, but we were playing it really close to the wire – a fact that I was trying my best to keep from the outside word. If raising money when you want it is hard, then raising it when people know you need it is impossible.

And there ’s no denying that the stress was taking its toll on our personal relationships, too. Karl, in particular, had never been a fan of business and had started talking openly about wanting to leave Britain with his girlfriend to sit on a beach and write. Savannah – a full ten years younger than Karl – was more concerned that she had to pay her rent and was sitting on a law degree that could be earning her much more than the meagre sum that Kudocities was paying. But she believed strongly in the business, and had become close to the users, so – despite the odd wobble when someone posted something negative on the site – she was determined to plough on.

I still didn ‘t know how to feel. I was still spending all my social time with winners – entrepreneurs whose businesses were getting bigger and better; who still had angel money in the bank and, if my dining companions had been right, were heading towards this huge liquidity payday. And fame! And fortune! I’d be a fool to walk away from the possibility of joining them, and Savannah was right – there was so much potential in Kudocities. It really was an awesome site.

And yet every night I was heading back to my flat in East Dulwich. Worried about the money my parents and my uncle had put into the business; worried about Savannah and Karl; worried about the company and what I’d do if it didn’t make it as far as the relaunch.

On paper I was an Internet entrepreneur like my friends, but in reality the gap between my life and the people I spent my time with was wider than ever.
But whatever insecurities I might have had, none of them excuses the absolutely stupid thing I did next.

15.3

It wasn ‘t my fault, of course. I had arrived home to my empty flat and run myself a deep bath to try to drown everything that was on my mind – just for half an hour while my laptop was busy downloading a day’s worth of personal emails that I hadn’t had a chance to deal with in the office. Walking over to my desk in the corner of my living room, wrapped in a towel, I noticed an icon I hadn’t seen for a long time.

It was a picture of a blonde girl, and next to it the word ‘Hey’. I should have ignored it. I should have checked my email and turned off the computer. I had enough crap to deal with; I really didn’t need this.

‘Hey, ‘ I replied.

‘You never replied to my email.’

‘I didn’t think you ever wanted to hear from me again.’

‘I didn’t. Were you in the bath?’

‘How did you know that?’

‘I know everything. So – I’m off to Pittsburgh tomorrow for a month, but I wanted to see you before I go.’

‘Is that a good idea?’

‘Probably not.’

‘Okay. Shall I come round to yours after work?’

‘No, let’s go somewhere else. I’m going to be in Holborn: shall we meet there? Seven?’

‘Okay.’

I was an absolute fucking idiot. I’d promised Savannah that I wasn’t going to see Karen again. Hell, I promised myself. But why not? Why did Savannah care anyway? And why shouldn’t I see her one last time? I had missed her.

Karen left for Pittsburgh the next day and I left her house, grabbed a coffee from Starbucks and headed for the office, just in time for a meeting. I scraped in with minutes to spare, meeting Savannah at the door as I did.

‘Good night last night?’ she asked, with those eyes.

‘Yep – bit dull really.’

‘Oh, really, I tried to call you about midnight to ask you to bring some stuff for the meeting.’

‘Oh, sorry, did you leave a message?’

‘No.’

Phew .

‘Oh, maybe I was in the shower or something.’

‘I tried to call you this morning, too. About an hour and a half ago. I guess you must have already left the house?’

I shrugged.

‘I guess.’

I felt as guilty as an adulterous husband. Why the hell didn’t I just tell her the truth? ‘Yeah – I saw Karen last night, what of it?’ But I couldn’t. Wouldn’t. Not when we had so many more important things to worry about. Or at least, that’s what I told myself.

Over the next few weeks, Karen phoned me every night from Pittsburgh. The time difference meaning she would be heading out for dinner just as I was stumbling home after whatever networking event or dinner or booze-up I’d been to that night. Before I knew it, we were making plans – when she got back we’d give things another go, I missed her too (I really did), no – Savannah and I were still just business partners – she wouldn’t care …

In deano jupidas.

15.4

The email was waiting for me when I arrived in the office.

To: Paul Carr

Douglas Smith

15.5

‘ Everything’s totally fucked.’

‘Oh, come on, it can’t be that bad.’

‘It’s that bad. It’s worse than that bad. The bank have turned us down for the loan – the fucking SFLGS loan that is designed for people who can’t get bloody loans – Savannah and Karl are working their arses off and I can’t even promise them that they’ll be able to pay rent until Christmas and the developers are taking their sweet time finishing Kudocities which means either telling them to stop work, or letting them carry on, knowing we can’t pay them.’

Sam listened patiently as I gabbled on; listing problem after problem after problem. He finished his pint and stood up to go and get another round – but he’d thought of something to cheer me up …

‘ Still, at least Karen’s back in a week …’

Thud.

The sound of my head hitting the heavy wooden pub table caused the old man at the table next to us to turn round. ‘Don’t worry, old chief, ‘ he said, ‘at your age I was fighting a war.’

Where do I sign?

15.6

Things were starting to get messy again and I knew that if there was any chance of the Karen situation being resolved, allowing me to focus on bringing Kudocities back from the abyss, then drastic action would be required. I would need to do the grown-up thing: to be honest with both her and Savannah and to make my mind up what the hell it was I wanted. Karen was suspicious about my relationship with Savannah and Savannah claimed not to care about Karen, as long as I was honest about what was going on. This was an easy situation to solve.

Easy, that is, unless I was to get absolutely steaming drunk and decide it would be a good idea to introduce them to each other.

I’m not entirely sure what possessed me to make the call or exactly what I’d said, but I do know that last orders had just been called when Karen walked into the pub that Savannah and I had been drinking in since we’d left the office.

In the sober light of day, Savannah and Karen meeting was never part of my brilliant plan to solve all my personal problems. My brilliant plan was that I’d sit down with them both independently. I’d explain to Savannah that I was really sorry that I’d used Karen to try to make her jealous, and to admit that I’d started seeing her again, but that I didn’t know whether it would go anywhere. Be honest. Then I’d explain to Karen that, yes, I still loved Savannah but that she and I weren’t getting back together – certainly not now – and that I wanted to give things a try. It was the only adult course of action.

But then evidently I’d decided, after another stressful day in the office and another evening of drinking with Savannah, that I could kill the two birds of my brilliant plan with one stone by inviting Karen to join Savannah and me in the pub, while at least two of us were plastered.

And that’s the last thing I remember about the evening.

Chapter Sixteen: ‘Two girls, one fuck up’…