The new Web geniuses

How slackers with one dopey idea are getting rich
By MIKE MILIARD  |  August 25, 2006

KYLE MACDONALD, ON HIS WEB VENTURE: "I'm not overconfident, but it's to the point where if I don't trade a red paper clip for a house, I'm a total schmuck."

One of the first big stories I ever reported, in the gloaming of the dot-com boom, was a 1999 piece for Forbes ASAP ranking the tech sector’s 100 richest executives. For six months, my co-workers and I plugged numbers from SEC filings into a vast spreadsheet, charting Web entrepreneurs’ holdings. All the while, we marveled. Even with the market’s wild undulations — eBay’s Pierre Omidyar, for instance, had $4 billion worth of stock on March 1, which then shot up to $8 billion (April 29) then all the way down to $2.8 billion (August 4), and up again to $4.7 billion (August 31) — the sheer numbers were hard to wrap our heads around.

For all its practical uses, the Web looked like nothing so much as a vast generator of wealth — money that had a pretty tenuous connection to reality, if it had any at all.

Of course, that vaunted bubble burst, spectacularly, a couple years later. (The intro to the Forbes piece notes that, by the end of its IPO, in ’99, eToys had a $7.7 billion market cap. eToys!)’s Jeff Bezos is still a very wealthy man. So (of course) are Bill Gates and Steve Jobs. But as the Web has evolved, becoming more and more democratized, capable of being customized and used in ever more ways, a funny thing is happening. Regular folk are coming up with one simple idea, posting it online, and making millions. No IPO necessary.

A paper clip and a dream
Montrealer Kyle MacDonald, 26, is not a wealthy man. His primary career is preventing restaurant tables from wobbling. (Yes, really. Check out Buying a house seemed hopeless, far beyond his means. Then one day last July he started thinking about a game he used to play as a kid called Bigger and Better, in which, he says, you’d “start with something small, form teams, go around the neighborhood trading that something small for something bigger and better with each door you knock on.” He had a revelation: “Instead of working, what if I start playing Bigger and Better professionally?” He looked at a red paper clip on his desk. Eureka.

MacDonald logged on and registered a URL: “I want to trade this paper clip with you for something bigger or better,” he wrote on July 12, 2005. “If you promise to make the trade I will come and visit you, wherever you are, to trade.… I’m going to make a continuous chain of ‘up trades’ until I get a house. Or an Island. Or a house on an island. You get the idea.”

Two days later, he traded the paper clip for a pen shaped like a fish. Then, not long after, he traded the pen for a door knob that looks sort of like E.T. after he’s smoked a joint. Then he traveled to Amherst to trade the door knob for an old Coleman camping stove. Then to San Clemente, California, to trade the stove for a 1000-watt Honda EX Generator. And on and on.

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  Topics: Lifestyle Features , Business, U.S. Securities and Exchange Commission, Bill Gates,  More more >
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