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We have an image of the netpreneur, a cybergeek in his early 20s who doesn't
know how to tie a tie, wears sandals with suits and speaks in web jabber.
And of course, he's hounded by venture capitalists. We wish it were true. A
handful of stories about Stanford drop-outs landing $10 million in venture
capital for an idea sketched out with friends over 72 emails and you get the
idea an MBA doesn't get you far in northern California. Again, not true.
Maybe it was reality for a few weeks in early 1999, but those heady weeks are
gone.
And what heady days they were. Consumers were finally buying online in
big numbers and business-to-business Net commerce was promising to get
disturbingly gigantic. Disturbing, that is, if you were on a corporate sales
team and it began to occur to you that the orders were no longer getting
called into your voicemail. Nope, your customers started logging online and
grabbing what they needed from the corporate website, and of course that gets
you thinking about how long the corporation would continue to pay your
commissions when the sales don't come in on your order forms. But I digress.
In 1999, 30% of American venture capital began flowing into Internet
start-ups. In the early months of the year, the VCs snagged anyone with the
least inkling of cyberculture. It didn't matter that the proposed Netbiz
would see countless years of multimillion dollar losses. The VCs can cash
out after the IPO, so who cares for losses. Red ink in big numbers have
become the smoky war stories told over blue martinis and cigars. The Venture
crowd hangs in for a few years beyond the IPO and get cyber-richer. It just
didn't matter if there was no business experience on the launch team. The
old one-in-ten venture formula for start-up success was meaningless when one
Net winner could cover the losses on 30 or 40 investments. At those odds,
the more bizarre the idea the better.
Those were the good old weeks. The techy venture capitalists are into
something different in the late hours of the millennium. "The big story now
is that we're getting second generation Internet entrepreneurs," said Josh
Pickus, partner with Bowman Capital Management in San Mateo, CA. Pickus
expects his launch leaders to be well-scrubbed. "We like to see people who
have been through one full cycle in managing an online enterprise and are
doing their next company," said Pickus.
Bowman funded Kris Hagerman's recent start-up, Affinia, an Internet
company that matches merchants with merchandise. Before Affinia, Hagerman
launched Big Book, an Internet yellow pages, and built it up for 2 1/2 years
before selling it to GTE. "It's nice that Kris has a Stanford MBA," said
Pickus, "but his greatest attribute to us is Big Book."
If venture capitalists are having their cake and eating it too
(netpreneurs with Internet management experience in addition to a great
idea), the launch captains are finding it difficult to fill out their teams.
"I think there are a lot of good ideas and a small management pool to
implement the ideas," said Hagerman. "The ability to put together a great
team is every bit as challenging as developing a great idea."
So netpreneurs are dressing up better than the crazy days of early '99,
but they still have to suffer a sandal-footed staff. In time, the Internet
leaders are bound get as stuffy as Microsoft (and who'd a thunk MS would get
stuffy). It's the price of stability. But for a few years yet, sandals,
lattes and 8 am to 10 pm workdays will keep the web edgy. Netpreneurs are
wearing ties to the VC meetings, but their quality time is still spent
brainstorming with the hip, smart and poorly dressed.
Cool site: DigitalWork.com. Here's a great site for the home business entrepreneur who wants to grow without leaving home. DigitalWork offers
small business all the tools of outsourcing, from marketing and advertising
to bookkeeping and research.
Robert Spiegel, The Shoestring Entrepreneur, is the author of The Complete
Guide to Home Business (AMACOM, due October 1999) and The Shoestring
Entrepreneur's Guide to the Best Home-Based Businesses (St. Martin's Press,
due February 2000). For questions or comments, email Rob at spiegelrob@aol.com.
Click here to find out more about Robert Spiegel.
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