Piping Hot Dogs Rises from Dot-Com Graveyard

Hot dog stand owner Jim McMahon has announced the triumphant return of his company, Piping Hot Dogs.com, from the dot-com graveyard.

“We really learned our lesson, man,” McMahon said in an interview Thursday. “For a while, dot-com became dot-bomb, you know? It was like a stigma. People saw the .com on my cart and walked the other way. They didn’t want to talk to me. But things are changing, man. I feel it in the air.”

The freshly unveiled hot-dog cart features a brand-new coat of yellow paint with the company name rendered in fire-engine red. “I’m optimistic about the future,” McMahon said. “I’ve really learned my lesson.”

Ups and Downs

The Internet era has been one long roller coaster for McMahon. After years toiling in obscurity, he first added the .com extension to his hot dog cart’s name in late 1997 using a can of red paint and his lucky paintbrush. He immediately raised $5 million in venture capital funding from triply prestigious firm Venture @venture.com.com.com.

“Piping Hot Dogs.com was a major player in the space at the corner of Broadway and Maiden Lane,” said Venture @venture.com.com.com founder, chief executive officer, analyst, publicist and receptionist Jon Dormouse. “This was a high-traffic sector of the industry that seemed to offer unlimited growth opportunities in the red-hot Silicon Alley district.”

However, when the Internet downturn hit, traffic slowed to a crawl at Piping Hot Dogs.

“More and more people were bringing lunch instead of eating out,” McMahon said, “and the guy that used to buy 10 dogs a day got canned.”

Hard Lessons Learned

Recently, however, McMahon has seen an upswing in traffic. “There seem to be more people with money to spend, even if it’s just $2,” he said. “Lucky for me, hot dogs have a great price point.”

Moreover, he has no intention of repeating past mistakes. He concedes the company probably expanded too fast in the wake of its successful financing round in the late 1990s. “We introduced chili dogs, hot-dogs-on-a-stick and corn dogs within days of each other. I think we flooded the marketplace and confused our consumer base,” he said.

McMahon also has an unexpected new weapon in his arsenal.

“I’ve developed a secret sauce,” McMahon said. “It’s only in beta, but I’m very focused on achieving ROI, so you can bet I’ll be ultra-responsive to customer feedback.”

McMahon revealed to the E-Commerce Times that his new mustard recipe is code-named Dead Goldfish, after one of his beloved pets. It is expected to be made available in the third quarter of 2004. Word on the street is that Dead Goldfish will be “extra spicy.”

Bottom-Line Focus

Until the new sauce comes out, McMahon hopes to lure customers with a back-to-basics approach.

“We’re focused on profitability now,” he said. “Forget banana chili dogs — our real profit center is foot-longs, and that’s where we plan to focus our energy in the second quarter.”

Piping Hot Dogs.com reported revenue of $150,000 in the fiscal year ended December 31, 2003, up more than 120 percent from the previous year’s results. The company also turned a profit for the first time in its history, posting a net gain of a shiny nickel.

McMahon proudly displays the nickel in a commemorative coin holder atop his hot dog cart. “This is what we at Piping Hot Dogs.com have worked for over the past four years,” he said. “I’d like to thank my mother, my cousin Nick and my friend Joel for letting me crash on their couches when I was evicted. Even if cousin Nick did kick me out after three weeks.”

Big Improvement

How did a onetime dot-com highflier go from venture-capital riches to eviction? As it turns out, hot dogs weren’t the only things McMahon was cooking. In 2002, Piping Hot Dogs posted just $62,000 in revenue against a net loss of $4.5 million, which included a one-time charge of $2.5 million for McMahon’s Central Park West penthouse apartment.

“That place is a damn sight better than the old rathole I used to live in,” McMahon said at the time in a rare slip of the tongue. “Er, I mean, the new facility is a state-of-the-art distribution center that will improve stocking capabilities and increase employee morale, resulting in a trickle-down effect of improved service to consumers and a corresponding increase in revenue.”

However, the distribution center did not pan out according to expectations. A lawsuit filed by a suspicious customer, who turned out to be New York attorney general Elliot Spitzer, resulted in McMahon’s eviction after he ran up enormous legal bills and was sentenced to pay even more enormous fines. McMahon narrowly avoided jail time.

“Call me crazy, but I believe a distribution center is supposed to contain products,” Spitzer said in a statement released after the verdict was announced. “When law enforcement officers entered the apartment, all they found was furniture, electronics and a lot of Richard Simmons DVDs. They checked the refrigerator and there wasn’t a hot dog in sight.”

In the new Internet era, downsizing and legal action clearly have taken a steep toll, but Jim McMahon is unbowed. “Our new distribution center may be much smaller — currently, it is the size of my friend Joel’s dining-room table — but Piping Hot Dogs.com is ready to forge ahead as a survivor in a new, revitalized business climate. Anyone know where I can find a rent-controlled apartment?”