But, the Pirillo geeks love them, and that's good enough for me. Should be a fun time. Now I gotta check them out.

Oh yeah, who said file sharing is bad? These guys have their own MP3's on their site. Yeah, pretty cool. Plus, I know a lot of Chris's friends listen to MP3s.

If these guys tried to shut down the MP3 scene, I would never have heard about this band. I never would have been compelled to spend $60.

Oh, I'll bet that I'll get a t-shirt or two (another $50 gone) and a CD or two (another $40 gone).

And the music industry says it can't make money off of stolen music? Heh.

Not to mention I'm a sucker and like buying music. I've bought $500 worth this year so far. But, the industry continues to treat me like a criminal.

Sooner or later I'm gonna get tired of being treated like a criminal (not to mention they continue to charge $14 per CD -- a price that I think is way too high considering you can see the band live for about $25). Who's the criminal? The line certainly is blurring.

While I'm on the topic. What the fuck is up with the really small type on their Web site? Shit, I'm 37 and I can't read this crap. It's like they are saying "we're gonna make it so hard to read our site that you won't think of coming to our concert."

Fooled you suckas. The old man will be in the house!

Oh, do I know a thing about stock options.

They are like a lottery ticket, albeit with pretty decent odds (well, it looked that way in 1999 anyway).

I owned 22,500 options in DevX.com due to my selling a NetMeeting Web site to DevX. I got a small amount of cash and a whole bunch of options. I knew I was getting a lottery ticket. I didn't go out and buy a BMW.

I had about 20 times as many options as the usual employee. What was really cool is my options were immediately vested. So, I could have exercised them at any time.

Having options means you need to learn a bit about the VC market and what's going on.

First of all, the VC's (in DevX's case Hummer Winblad, the same VC firm that funded Napster) gave DevX $6 million in startup funding. Think that they were paid in options? Hell no. They got preferred stock. In other words, they were the first to get paid back.

There are all sorts of things we were watching. If DevX had gone public (it hasn't, and doesn't look likely to) none of us with options would be able to get any money out for something like six months. That's why stock prices often started a slide down around the six-month mark as smart employees and management started dumping stock.

Remember Bob Brinker's rule (Brinker is my favorite financial advice guru): no more than 4% of your entire portfolio should be in any one stock. So, if you happen to be lucky with stock options, turn those suckers and diversify, diversify, diversify! (Or, remember Enron).

Then, you gotta think about AMT. Alternative Minimum Tax. If you exercise your options, you really need to make sure you have enough to cover your tax liabilities in case the stock goes south (quite a few people I know were severely hurt by AMT).

Really, you should see a financial planner and a lawyer before getting involved in stock options (at least before you exercise them). If you're getting offered options as a part of your employment package, you probably should see an employment lawyer (at least if you're getting a management job where there's a significant number of options on the table).

OK, so, the strike price on my DevX.com shares was about a quarter each if I remember right. So, if I wanted to exercise my shares, I would have had to put down $5,625. Not a small amount of money for someone like me (that's more than 5% of my annual wage and is more than my current car cost).

When I left Fawcette I needed to decide whether or not I was going to exercise my options. I decided not to, because I just didn't believe that the company was gonna be able to go public. So far I've been proven right.

So, let's say that DevX does go public tomorrow. Let's say that they have a wildly successful IPO (throw away the fact that my options were diluted a great deal by later stages of financing). Let's say the stock goes up to $20. As I understand it, my $5625 investment would now be worth a whopping $562,500.

As I understand it, most executives had far more options than I did. And the VC's and founder had even more than that. Now you can understand where Bill Gates and Larry Ellison's wealth comes from (and why executives care so much about their options. Didn't Steve Jobs last year turn down a salary from Apple?)

You can see the ability to turn a small amount of money into a huge amount of wealth with stock options.

One problem. My options in now three companies are worthless. Options only matter if your company goes public (or gets acquired -- my ex-wife's sister made a decent check on options after her company got sold to AOL).

Oh, and your stock price MUST STAY UP FOR MORE THAN SIX MONTHS. Otherwise you won't be able to cash out.

It really would have sucked to watch DevX come out at $20 and then go down to $4 after six months. If that happens, you'd still make a decent profit of $84,375 -- enough for a downpayment on a Silicon Valley house.

But, greed kicks in.

Your executives are probably lying to you when they say "our numbers look great, we'll be profitable next year, our stock price is going to go up."

Personally, if I was in that situation I'd diversify. Sell my stock. Take my $84k and run to the bank.

The other problem is tax rules.

The government doesn't want you to sell that stock right away. That creates speculative bubbles that aren't good for the economy. Not to mention that employees that make a huge amount of money tend to quit and go hang out in Hawaii for a year or two.

So, they make it attractive to keep your stock for a year after you exercise it. (You get taxed on long-term capital gains rates of 20% instead of income tax rates, which usually are about 35% to 45% depending on how much you make).

Well, what happens if you exercise your options on the day the company goes public?

Then you need to hold your stock for a year. Where you could have made a $84,375 profit at a $4 share price, now you are gonna hold your options for a year. What happens if at month eight your company goes out of business? Or, something happens to make the stock price go down to $1 or less? Now you look stupid, huh?

Lots of people are in that situation right now.

So, next time we're in a bubble, you're gonna remind your kids "diversify, diversify, diversify" right?

As to, are options right for me? Well, I've been through three startups now. All three have failed to payoff.

I figure that your odds are about one in 20 of hitting a decent jackpot.

Anyway, if you do get into a job with options, don't even think that you're gonna see the money from them.

I think that any employee who looks at them as compensation is fooling him/herself. Join a startup because it's fun and because its products are changing the world.

If your lucky those options might pay off for you.

But, if you're working partly for fun then it won't matter either way.

I love Ofoto. On Thursday evening I ordered some pictures. On Saturday they had already arrived.

Same with Netflix. On Thursday I ordered a new movie. On Saturday it was waiting for me in my mailbox.

My buying behavior has definitely changed because of the Internet.

It's interesting that at least some of the hype surrounding the "Internet bubble" was true. The Internet does change things. It just took a lot longer than the two years that the venture capitalists were willing to give companies to get profitable.

I'll bet that in 10 years companies like NetFlix and Ofoto will be hugely profitable. Why? Because they serve customer need. Kudos to them!