One of the more popular ideas from the dot-com days was creating a payment service provider company. It's hard to say why; perhaps their founders believed that we really needed yet another "layer of abstraction" in commerce? Perhaps they thought that merchants would sign up in droves when they heard about the opportunity to give away yet another percentage of each sale to a middleman? Whatever the reason, no one signed up and most providers collapsed as soon as their funding dried up. Well, I shouldn't say "no one;" there were a few businesses that took the bait. <b>Diez B. Roggisch's</b> company was one of them.

Diez worked for a fairly large travel agency that did a lot of third-party hotel reservations. There's nothing new about third-party reservations -- agency reserves a room with customer's credit card, hotel bills the customer, agency gets a cut -- and that lack of newness was exactly why Diez's company wanted to change. They wanted to jump on the dot-com bandwagon and become an online travel agency. A new executive was brought in to make this happen.

Though his official title was Chief Information Officer, he preferred being called the Chief Technology Evangelist. As he put it, he always was on top of technology. His library reflected this well: the CTE had an almost complete set of the "For Dummies" collection on his bookshelf. Even Managing For Dummies was there, but apparently he never made it past the blurb on the back cover.

The first step in becoming a successful(*) dot-com, according to the Chief Technology Evangelist, was to partner with another successful dot-com. And who better to partner with than a payment services provider? There was a whole swarm of payment service providers to choose from and the CTE researched each and every one. He eventually settled on one that, coincidently, was founded by his brother-in-law.

This particular payment service provider worked like many others: when the customer was ready to make an online purchase, they would be transferred to the payment provider's website and complete the transaction. The merchant would never see the credit card number and would be later paid by the payment service provider. In theory, the plan sounded completely unnecessary and was a rather obnoxious way to interrupt the customer's shopping experience. It was exactly what their travel agency needed.

The Chief Technology Evangelist struck a deal with the payment service provider and it was left to Diez and his team to make it happen. Almost immediately, Diez told the CTE that it was impossible:

CTE: What do you mean you can't do it? You haven't even looked at the documentation.
Diez: We need to give the hotel the customer's credit card to reserve a room and this service doesn't give us card numbers.
CTE: Oh, well. Hmm. I'll get back to you.

A little later, the Chief Technology Evangelist came up with a new plan:

CTE: We will just reserve the hotels with our credit card number.
Diez: We make 100's of reservations a day; I don't think it would work.
CTE: Sure it would! We have the money, so what does it matter?
Diez: Even if you could, what about all the up-charges like room service or extra nights?
CTE: Oh, well. Hmm. I'll get back to you.


Diez and the Chief Technology Evangelist went through several more rounds of ideas until the CTE settled on creating an infrastructure that would allow them to use the agency's credit card to book the hotel rooms, track any up-charges from the hotel, and send additional invoices to the end customers, all while working very closely with the payment service provider. It was the dot-com way of doing things.

To implement this system, there was a lot that needed to be done: software needed to be developed, business processes needed to be rethought, contracts needed to be negotiated, and so on. The CTE figured that, even with a barrage of contractors and consultants, it would take at least eleven months to complete. So, he started right away.

About halfway through the development of the new system, the dot-com bubble burst and companies allover started failing. The payment service provider that the agency partnered with lasted no more than a few weeks before they collapsed. After spending millions to partially develop the "dot-com project," the agency canceled the project and threw it all out along with the Chief Technology Evangelist.

Five years later, they've finally recovered from their losses and even managed to put up a modest web presence. And that's a good thing, too. They just in time for Web 2.0.

 

* In dot-com lingo, "success" is defined as having a cool name, a cool logo, and a lot of venture capital funds. This is often confused with "surviving," which means staying in business by actually making a profit.