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Dot-com survivors offer advice to start-ups searching for success

INTERNET

By Karen J. Cohen, LocalBusiness.com

Apr 12, 2001 11:16 AM ET

MIAMI, April 12 (LocalBusiness.com) -- Luck, serendipity, persistence and a paradoxical inability to raise money are some reasons why some dot-com swimmers claim they have stayed buoyant while many cohorts have gone under.

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At this week's Tuesday Network meeting executives from five Internet companies shared their thoughts on why they have been able to find customers, attract capital and forge on toward the promised land of profitability.

At Quickbrowse, CEO Mark Fest said the company's continued existence reflects its genesis. A former journalist and programming hobbyist, Fest wrote software that allows users to simultaneously view a number of Websites.

Money's not the only key
"I didn't mean it to be a business," he told the crowd at the Omni Colonnade Hotel in Coral Gables. But when fellow journalists begged copies of the software from Fest, he realized its potential.

An investment of just $500,000 allowed Quickbrowse to get off the ground in 1999, but the small amount also "prevented us from going crazy," Fest said. That sentiment was echoed by others who claimed that limited venture capital forces companies to stay disciplined.

"In retrospect, I'm happy that we didn't get $10 million," said Nate Clement, COO of LatPro, a Spanish-and-Portuguese employment site. Started in 1997 by a group of business school buddies disappointed with their day jobs, LatPro did get $1 million in funding. And while it is one of the few employment sites that charges job-seekers, LatPro saw $600,000 in revenue last year.

Other keys to LatPro's success are a confluence of trends and savvy. For one, the founders claimed a niche market and played it to the hilt. And LatPro came online just as headhunters were beating the bushes to replace the first wave of retiring baby boomers. Moreover, the growth of the U.S. Hispanic population promised an increasing number of users for the company's site.

Persistence, flexibility can pay off
Some entrepreneurs say that being able to plug on in the face of disappointment is crucial. David Schwedel, CEO of marine e-exchange Marex.com convulsed the audience with amusing tales of how promised venture capital offers deflated several times at the last moment, leaving him holding the bag for rent, salaries, computers and other expenses.

"Don't give up no matter what you do," he said, regaling listeners with how he raised $7 million in Europe when U.S. investors failed to come through.

Neal Bush, vice president of sales at City Reach International, a London-based company that builds and operates Internet data centers, offered some practical advice: Make sure that equity investors bring more to the table than money, perhaps a stable of portfolio companies that might be helpful in one way or another. And have a vision, but remain willing to be flexible.

"We've changed strategies three or four times," Bush said. "Say what you will deliver and deliver on what you say. I still believe that customers are willing to pay for quality."

Karen J. Cohen is a staff writer for LocalBusiness.com. E-mail her with story ideas and comments.

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