New Kids in eBusiness Midd Alum grow their emerging 'Coms

1
New Kids in eBusinessMidd Alum grow their
emerging .Coms
Through extensive research and analysis we sought
to determine the qualities and attributes needed
to run a successful internet company. There are
many challenges and obstacles that companies must
overcome to survive and prosper in the new
economy. This panel attempts to answer these and
other perplexing questions on becoming a
successful and profitable player in eCommerce.
2
Panelists
Graham Balch 97, CEO and Founder, Director,
ChangeAddress.com, Inc.
Humberto Garcia-Sjogrim 96,
Founder and COO, GiveaShare.com
Ted Adler 99, President,CollegeXTRA.com Co-Found
er, middkid.com
3
ISSUES

• How/where did you begin this trek from campus to
  eBiz?
• How are you selling and funding your idea?
• What is unique about your business model and
  value proposition?
• Where did you go wrong and what have you learned?
  
• What is your plan for transitioning from .Com to
  .Profit?

4
From Campus to eBiz
Unique Idea
Venture Capital
Business Plan
In becoming a successful company an idea must be
transformed through the business plan into a
working model which facilitates raising money
through venture capitalists.
5
How to Form Your Very Own Silicon Valley
Step 1 Go to Menlo Park. Find a tree.Step 2
Shake the tree. A venture capitalist will fall
out.Step 3 Before the venture capitalist
regains its wits, recite thefollowing
incantation "Internet! Electronic
Commerce!Distributed Enterprise-Enabled
Applications! Java!"Step 4 The venture
capitalist will give you four million
dollars.Step 5 In 18 months, go public.Step
6 After you receive your check, go back to Menlo
Park. Find a tree.Step 7 Climb it. Wait.
-- By Laura Lemay
6
Experience and Maturity
The average founder of a start-up is 43 years old
7
Venture Capital

• Receive cash for equity
• Use VC money to gain market share
• Showcase a successful company
• Create partnerships and alliances

8
Its a long, tough road

• Chances are 6 in 1 million that an idea for a
  high-tech
  businesses eventually become a successful company
  that goes public.
• VCs fund, on average, 6 out of each 1,000
  business plans they receive.
• Of the start-ups that get to an IPO, the median
  company takes 3-5 years.

Never give stop looking for money in your
ventures to succeed in eCommerce - Graham Balch,
CEO, ChangeAddress.com
9
Venture Capital Spending
105
41
10
U.S. Venture Investments 1996 - 2000
1996
1997
1998
1999
2000
Source PricewaterhouseCoopers MoneyTree Survey
11
1998-2000 Initial Public Offering Data
12
2000 Filings/Pricings/Withdrawls
13
Unique Selling Proposition
Distinguish your idea from competitors
Developing a Household Name
Dedication to USP
Quality Service Value Community
Communicating Business Message
These are the tools that prove to the world your
idea is better than all the rest.
14
Building a successful company
Idea (vision) Closing Incorporating Kitche
n table Finding a home Founders commitments
Start up Quit job Business Plan 2nd
Round Management Launch 1st product Seed
Capital Raise working capital IPO
6 months
6 months
6 months
12 - 18 months
Entrepreneurism is in your blood - Graham
Balch, CEO, ChangeAddress.com
Its the creative process that is exciting -
Humberto Garcia-Sjogrim, COO, GiveaShare.com
15
Failed .Coms
eCommerce sites in 2000 were the biggest losers
with many other sites such as eToys who have a
very bleak outlook in 2001.
16
.Profit
Becoming profitable although not the norm, some
companies have developed a successful business
model and have become profitable in times where
almost all others have failed.
17
Common Mistakes

• Hiring your friends
• Thinking that a bunch of MBAs can solve
  anything
• Dumb money
• Thinking that a fancy presentation means
• you have a good business
• Underestimating customer adoption
• Lack of industry experience

Humberto Garcia-Sjogrim, COO, GiveaShare.com
18
Where is eCommerce Moving?
While the dot-com age is fading in the U.S.,
Europe and Asia have become the new Hot Spots
in eCommerce.
19
.Com to .Profit

• Efficiency Capital, Employee, Company
• High customer return rate
• Focus on USP
• Brand Name Recognition
• Prioritize future returns through innovation
• LUCK