You can please some of the people some of the time. But you can't please all of the people all of the time. Was that Bob Dylan who wrote that?

Alan Daniels, founder and former CEO of RealEstate.com, learned a variation of that axiom. You can please investors some of the time. You can please customers some of the time, but you can't please them both at the same time.

If there is a lesson to be learned from the dotcom fallout it is that no one had a blueprint for how to build a big business on the Internet, and that sometimes the collision of new economy and old business techniques simply don't work.

Daniels, along with co-founder and chief strategic officer Lisa Beale, executive vice president of marketing Kenneth Mack-Solden, and executive vice president of human resources Lou Roden, formally resigned their positions with RealEstate.com, which has been sold to lead investor JP Carey, an Atlanta-based full service investment banking firm.

All the former officers have other positions, says Daniels, and while some were offered new positions to stay on with RealEstate.com, the foursome declined. It was the end of a dream and time to walk away.

"The vision that myself and previous management team had is going to change," laments Daniels. "The new owners will basically look to alter the direction of the company.

"Our focus was the direction of delivering quality products to real estate professionals and providing them with a variety of products," explains Daniels. "It is important to me to note that our company was built with relationships and a passionate management team. We were looking to revolutionize a space. I am certain that the new owners will have a difficult time replacing those two ingredients."

What happened? Daniels doesn't tell the same story as other failed dotcom officers. He doesn't blame the stock market. He doesn't blame a fickle investment community. He blames the management of his own company.

When the company acquired backers, the whole corporate culture of RealEstate.com changed and not for the better, he says. The company was divided and conquered from within because it couldn't do the impossible - serve conflicting agendas. IPO-hungry investors wanted quick growth so that the shareholder value would grow. Meanwhile, the agent customers, new to the Internet, needed a lot of handholding and nurturing, not consistent with slash and burn march to profitability.

"We were growing our company aggressively from a revenue perspective from the first quarter of 1999 to the first quarter of this year," says Daniels. "It was simple to look at the revenue streams and see that we were on our way to profitability. What happened is we allowed ourselves to be forced into an IPO machine and that ultimately altered the path of the company, We grew from less than 50 people doubling revenues every quarter, to 170 people in 90 to 120 days.

"In our environment, investors want liquidity," he says. "The third component is having the right management team to run a company. My background is real estate, we founded this company to make a difference and make it better for real estate professionals. In building an IPO machine from an investor and big business perspective, you have to build a company that can function in public markets."

Those are two different types of companies, and the cultures at RealEstate.com ultimately clashed. In February, Daniels was sidelined while a group of people was brought in, on the advice of the investors, that would be the ideal management team to bring the company public.

"Those people came in and the culture and atmosphere began to change," recalls Daniels. " When market conditions changed, they weren't the original people who were passionate about the company. When the IPO window closed, the company was no longer on the path of being a huge company, and these people were out of their element. They didn't have the experience of running a smaller company where speed and quality delivery is the essence of who you are."

And that is the Catch-22 for the entrepreneur. If you don't have certain people on your team, investment banks are challenged to take your company public, and if you don't want to go public, you can't get investment banks to invest in you. If you want your dream funded, you have to give up control of what you want that dream to be to others.

"We accomplished a lot, and there are a lot of people who have benefited from the products we deployed," says Daniels in hindsight. " We would have done a better job if we had stuck to our original plan. Our company was built on relationships, strategic alliances and speed to quality deliverables. It wasn't built as an aggressive sales culture. It was more - "Let's work together as a team."

It's tough to turn your dreams over to someone else and move on. That's the only choice left to Daniels.

"I've been asked to speak at four colleges to entrepreneurs," says Daniels. "I think it is real important because there isn't a book that teaches you how to do it. How do you put yourself in the company of certain personnel? What level of control do you maintain and what do you give up? I have the answers now, but I didn't then. I was challenged just like any other entrepreneur to come up with my own answers."

"It's important to say that we had a great management team at RealEstate.com," says Daniels. "but environment is an important factor. I'm a great basketball player, but you put me on the baseball diamond and I would be challenged. its not an environment I'm familiar with. That is what happened to us. We had some great players that were out of their element because of the environment."

For the future of RealEstate.com, Daniels says look to the new owners. "The initial vision is definitely going to change and won't be the same because it is people who drive vision. Not venture capital."

Published: December 26, 2000

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