Myths of The Internet Economy
by Drake Raft

1. Myth: Silicon Valley and San Francisco are the best places to launch an internet company.
Fact: With the ubiquity of the internet, the frontiers of innovation exist wherever one pauses to think. Silicon Valley, with its ultra-high rents, hosting fees, pseudo-tech pyramid schemes, and a press which publishes the words of imprudent venture capitalists as gospel, may be the worst place to launch a business . The frontier hath moved further West.

2. Myth: The internet was born to support middle and upper level management, bankers, hypesters and venture capitalists.
Fact: The internet supports the collaboration of rugged individuals.

3. Myth: With low barrier to entry, business on the internet is primarily about marketing and building brand. Fact: With low barriers to entry, business on the internet is primarily about a product's integrity.

4. Myth: The internet gold rush has ended. Fact: The true internet gold rush is still dawning, with small, agile companies triumphing in the midst of all the tumbling high-tech pyramid schemes.

5. Myth: As the internet becomes less technology-oriented and more culturally-oriented, those with humanities and business backgrounds shall have advantages over those with technological backgrounds.
Fact: As the internet intertwines technology, business, and the humanities, without a firm grounding in technology, one can no longer fully understand business nor the humanities.

6. Myth: The Open Source movement is about socialistically or communistically sharing source code, with elite administrators and Wall Street bankers ultimately calling the shots.
Fact: The Open Source movement is about individuals following an aesthetic in creating elegant software which works, wherein administrators must harbor the deepest respect for individuality and freedom.

7. Myth: Most internet companies fail because of "unfavorable market conditions."
Fact: Most internet companies fail because of the lack of a business plans.

8. Myth: Banner ads and ecommerce cannot support a viable business model.
Fact: Companies with high quality content/employee ratios can be supported via banner ads and ecommerce.

9. Myth: Entrepreneurialism can be taught in the halls of elite business schools.
Fact: Entreprenuerialsm is an instinct and an art, and one can not be trained in it any other way but by doing it. Business schools would have more success teaching creative writing, or instructing their students on how to be rock stars.

10. Myth: Money is the key factor in starting an internet company.
Fact: An original, useful idea is the key factor in launching an internet company.

11. Myth: First movers had the advantage when it came to building viable businesses on the internet.
Fact: True originality can take its time, as long as the execution is brilliant.

12. Myth: The content worlds (publishing, music, etc.) shall be revolutionized by corporations leveraging the internet.
Fact: The world of content shall be revolutionized by individuals leveraging the internet. The intrinsic beauty of the internet is that a central bureaucracy of middlemen has no practical function, and on the net, the poetry must serve the people rather than the traditional bureaucratic prejudices.

13. Myth: Venture capitalists and MBAs are primarily interested in building valuable, enduring businesses which offer useful content, commerce, and community, and thus profits aren't always important.
Fact: Venture Capitalists and MBAs are primarily interested making money, and thus profits aren't always important, as long as the company is hyped and taken public, and they unload their worthless shares on the duped public.

14. Myth: Raising venture capital makes one an entrepreneur.
Fact: Raising venture capital makes one a middleman.

15. Myth: It is easy to serve two masters, both the bottom line and the higher ideals.
Fact: It is difficult to do this, and it can only be done by serving the higher ideals first.

16. Myth: The years spanning 1995-2000 saw great innovations in information technology.
Fact: The vast majority of revolutions in information technology intrinsic to the internet had already occurred prior to 1995. The only innovations after 1995 were in fundamental dishonesty and the marketing of high tech pyramid schemes upon the internet.

17. Myth: The main purpose of the industry trade magazines is to report on business innovations.
Fact: The main purpose of the trade magazines is to follow the money and hype, independent of any connection it might have with business or reality. Thus they followed the positive hype on the way up, and the negative hype on the way down.

18. Myth: Incubators encourage innovation and creativity by assembling tech people under the management of VCs and MBAs.
Fact: Incubators stifle innovation by assembling tech people under the management of VCs and MBAs. Microsoft and Dell did it the right way.

19. Myth: Microsoft is a monopoly.
Fact: Government is a monopoly.

20. Myth: Profits aren't important in the early stages of high-tech startups.
Fact: Profits are important to the bankers, the VCs, the insiders, the CEOs, and all their friends at every stage-they're just not important for the employees or the small investor.

21. Myth: Open Source represents a new paradigm.
Fact: Open Source is how all higher culture has evolved, from the Western Canon, to the music, to art, to architecture, to language itself. Microsoft uses Open Source, as its engineers utilize C++, calculus, and the English language.

22. Myth: As venture capital dries up, small businesses and innovation shall suffer.
Fact: As venture capital dries up, small businesses and innovation shall thrive, as hard work and originality shall be rewarded, while hype shall remain unfunded.

23. Myth: The more venture capital one raises, the better off one is.
Fact: The more venture capital one raises, the more people one has to hire, and the greater probability there is that the original unique vision, from which all companies must derive their ultimate value, will be diluted. But if there's no viable business plan nor original vision, then the company should be taken public as soon as possible, before everyone finds out.