Remembering the glory days - Flip Side - Brief Article

Chief Executive, The, June, 2002 by Joe Queenan

Not long ago, The New York Times ran a story about an unusual new car-parking service in New York City. Founded by Theodore Angelus, who made his first fortune in the highly competitive shaving implements industry, the Street Parking Exchange is an ingemous attempt to alleviate Manhattan's horrendous parking situation by matching people seeking parking spaces with people leaving them. In a city where garage rentals can run into hundreds of dollars per month, Angelus created a business model that is, at the very least, attention-getting.

The system works like this: A driver who knows he is leaving a parking space telephones the Exchange 30 minutes prior and provides the precise location of the soon-to-be-vacated space. When a prospective parker phones, he is given a list of all the available parking spots offered by the Exchange's 300 members. Once he has selected his space, the Exchange phones the driver occupying the space (heretofore designated "the parkee") and gives him the parker's name, car description and license plate number. When the parker arrives, an exchange of spaces is negotiated.

But the day the service opened, or so the Times reported, things did not get off to an especially smooth start. The problem was obvious: The number of people seeking parking spots vastly surpassed the number of people vacating them--at times by a margin of 30 to 1. And when the first parkee attempted to exchange her spot with another Exchange member, an ordinary driver unaffiliated with the company nipped in and purloined the parking space, much to the chagrin of the stymied spot-seeker. In fairness, it should be noted that none of the original 300 members of the Exchange had yet forked over any money, as they were beneficiaries of a one-week free trial. Following that, the monthly fee would be an extremely modest $22.95.

It is impossible to read this account of Angelus and his offbeat service without feeling a twinge of compassion. For all intents and purposes, Angelus has just launched a commercial enterprise that has virtually no chance of succeeding, is unlikely to generate significant revenues in the near future, is labor-intensive, risky, and subject to the slings and arrows of outrageous fortune. In short, he has launched the kind of business that would have made him an overnight billionaire just two years ago.

Back in that halcyon daze of yore, TheStreetParkingExchange.com -- as it would have been called -- would have been one of the biggest IPOs of the season. With a staff of 1,500, gorgeous headquarters located in Greenwich, Conn., and an army of MIT-educated "quants" using Cray supercomputers to analyze parking patterns in New York, the company would have glossed the covers of all the major business magazines. Opening at $12 a share, the stock would have skyrocketed north of $100 by the end of its first day of trading, and eventually reached a dizzying $450 a share.

Assisting the company in its stratospheric rise would have been a tidal wave of reports mass-produced by well-respected Wall Street analysts, rating the stock a screaming buy. "Even though the stock is trading at 756,078 times revenues and has no foreseeable earnings potential," reports would have read, "TheStreetParkingExchange.com is clearly and indisputably the Cartier of the Gotham parking industry, the only company positioned to dominate that sector for decades to come. With franchising opportunities already being discussed in Boston, San Francisco, Paris and Tokyo, TheStreetParkingExchange.com is an offering that investors overlook at their peril."

Today, after the dot-com implosion and the mass retreat of most of Wall Street's hysterical analysts, Angelus has no choice but to go the traditional route in getting his company off the ground. He has to answer the phones himself, handle his own publicity, and settle for $22.95 per member per month. Had he only had the prescience to bring his company public 24 months ago, he would have amassed a Croesian fortune overnight. Now he can only dream of what might have been. This is the downside of sanity: It buries our wildest dreams. And it makes it a whole lot more difficult to get rich.

Joe Queenan (flipside@chiefexecutive.net) is a regular columnist for CE.