Archive for the ‘BizTrend’ Category

Alternative Ways Social Networks Are Making Money

October 9, 2007

Social Networks are often criticized as having a hard time at being profitable. Most are supporting themselves in one of two ways, traditional online advertising, or a subscription model. But I wanted to briefly take a look at some other ways that social networks are trying to increase their revenue streams.

Virtual Gifts
The next largest monetization method taking form behind advertising and subscriptions are virtual gifts. With the massive success of virtual gifts in foreign markets (i.e. Cyworld) a lot of US properties have started experimenting. Most notably Facebook recently launched their “Gifts” area where people can send gifts to others for $1 a piece. Social Network HotorNot has even completely abandoned their subscription model that has made them millions year after year in exchange for a virtual gifting system. Virtual worlds are most suited for this type of system, but traditional SN’s are finding a place for it.

My guess is that this type of monetization will only be lucrative for extremely large social networks. With the very low cost of virtual gifts you have to produce many transactions for it to be worth it in the aggregate. The only communities to support this level of transactions are those in the top tier with millions of users

Survey Network
A monetization model pioneered by social network, Xuqa, survey’s are proving to be very profitable for a number of online communities. In a social network like Xuqa where there is a form of social currency that users collect, people can take surveys or sign up for other offers to receive more of the virtual currency. Xuqa has expanded their survey system into an ad network model called Peanut Labs where other publishers can sign up to monetize their site in the same format. According to Peanut Labs each survey response pays out $3 and affiliate leads payout between $.50 and $15.

Unfortunately this system is only structured for those communities that deal with virtual currencies, but can be a very viable source of revenue.

Photo Printing
With most social networks naturally being a place where users upload a lot of photos, many have experienced with providing printing services for a cost to their users. Most social networks outsource this and take a cut of the action. The most recent entrant on to the scene that helps with this is moo.com. While it is something that is easy to add and doesn’t interfere with the user experience, photo print revenue sources are still not substantial to make much of a dent.

Cardvio

I recently saw one of the founders of Cardvio demo their product at a Boston Web Innovators Group and was impressed with their technology. Cardvio is a system that lets you create your own card online and send it via snail mail. Social networks are a logical place to include this service considering it is usually where people store pictures to create cards, and the connections to the people they would want to send them to. Doesn’t hurt either when you have small features like Facebook’s birthday reminder.

While another easy add on similar to photo printing, this might be icing on the cake for social networks but by no means a main revenue source.

Product/E-commerce Affiliate Programs

Most online retailers such as Amazon offer affiliate programs that allow social networks to promote items next to people’s favorites. This has been around for awhile, but really hasn’t caught on or proven itself as a significant revenue stream. The downside to these programs is that it usually does interfere with the user experience, making it a tough cost-benefit decision.

I still think that there is room for innovation in monetizing social networks via E-commerce, but the current affiliate program structure just isn’t producing massive benefits.

Data Access

A very interesting revenue model that has appeared in micro niche professional social networks is charging for access to the data a community has created. For example, Sermo.com, a community for doctors charges companies such as hedge funds, and drug companies $150,000 a year to have access to the data being created by the community. Another example of this would be ActiveRain.com who isn’t charging to consumers yet, but will likely in the future, for content created by their community of real estate professionals through a portal called localism.com

If you know of any others, please leave them in the comments. In my opinion online communities and social networking is the future of the internet just like search was back in the late 90’s. Old revenue models are trying to be squeezed into a new medium, just like banner ads tried to be squeezed into search engines. There will continue to be innovation until a lucrative revenue model is created. My guess is that it will once again be a new form of advertising that takes advantage of the massive amounts of user specific data that social networks contain.

Source

Advertisements

Apple, Target, Facebook Tops for College Students

October 4, 2007

By Beth Snyder Bulik

They love Apple, shop at Target, use Facebook online and are split on whether they adore or despise the Geico cavemen. They wish they were better at sports, watch TV more often than surf the web and view a lot of YouTube videos, but generally don’t create them.

Meet the next generation of leaders and consumers: today’s college students. Anderson Analytics’ third annual fall brand survey of college students queried their likes and dislikes as well as brand affinities and media consumption of the 18-to-24 set and came up with plenty of lessons for marketers.

Women and social networks
While Facebook ranked as the most popular website among this demographic, social networking is twice as popular with young women as young men. MySpace, which was No. 1 last year, ranked No. 2 with females but dropped out of the top five for young men. That means marketers using social-networking sites to target young people are reaching far more females than males.

“The gender differences here are significant,” said Jesse Chen, lead consultant for Anderson’s GenX2Z youth-research group. “It’s the opposite of what we see when looking at use of social-networking sites for business purposes among adults, where men are far more likely to use sites such as LinkedIn. Among this younger demographic, it’s the women who are the über networkers.” Which also raises an interesting question: As these women age, will they change the networking dynamic between women and men in the future? And will new LinkedIn-type competitors rush to fill that need?

Tom Anderson, managing partner Anderson Analytics, offered anecdotal evidence of his own LinkedIn list of 800 with many more men than women. “We’ve seen older adult women tend to be more careful with networking and sharing information. Obviously, that’s not the case for younger women,” he said. “As these women age, I think the disparity will go away. … The question is what kind of choices will be available for them?”

Influence
While the college group is one of the smallest demographically in the U.S. — about 18 million projected by the U.S. Census this year vs. around 80 million baby boomers — it is one of the most influential. And the one paid most homage by marketers.

“They have huge impact on what their parents buy, and then they have their own money, more than any other generation before them, and of course they are the consumers of tomorrow,” Mr. Anderson said, adding that marketers also target the 18-to-24 crowd to reach society at large. “In America, everyone wants to be younger, so we look to younger people. We think they’re happier than us and we want to be like them, resulting in a younger-targeted marketing message,” he said.

Not surprisingly, the brand that ruled with this group was Apple. It ranked as the No. 2 overall best brand by 17% of the students; ranked Nos. 1 and 2 as most anticipated products with iPhone and new iPod versions; ranked Nos. 1 and 2 in product recommendations with iPod followed by Apple products in general; and ranked No. 6 in most popular commercials.

Love and hate for lizard
As for commercials, the ads these kids love are also some of the ones they hate. Geico ranked No. 1 on both the best and worst list of commercials — 25% ranked it good, 26% ranked it bad. Axe Bodyspray, iPhone, Burger King and Apple also made both lists.

While their preference for technology was apparent, particularly among men who ranked Digg and Engadget among their top 10 websites, they didn’t make the leap to consumer-generated media. Only 8% said they uploaded videos to YouTube. And in fact, 64% don’t make videos at all while another 14% who do make them said they don’t share them with anyone. While 75% surf social-networking sites and 71% read news online, only 14% said they wrote their own blogs.

Other than online habits, there were plenty of other disparities between the sexes. More than 71% of the young women recently read a book for pleasure vs. 55% of men, while more than 55% of men played video games alone vs. just 21% of women. But even togetherness didn’t up the video-game-play time: Only 17% of women said they had recently played a game with others, while more than 40% of the men had.

Source

Asia’s Young Entrepreneurs

August 21, 2007

By Brian Bremner
Asia is home to the fastest-growing pack of economies on the planet, including China, India, and a resurgent Japan. Less appreciated is the growing and dynamic entrepreneurial class of young managers cropping up in the region who are starting to make their presence felt. This new generation is globally aware, extremely Internet savvy, and willing to pounce on a smart idea even if it means grueling hours and financial risk early on in life.

For the past month, BusinessWeek.com has set out to find the most interesting examples of this new breed. We asked readers to nominate standout young entrepreneurs. Our editors reviewed the nominations and narrowed the field to this group of 20 finalists. Take a look at them and their businesses, and at the end of the slide show, we’ll ask you to vote for the biz whiz you think shows the most promise. Browse through, cast your vote, and BusinessWeek.com will report the results.

Arif Ayub

http://www.softflux.com
Karachi, Pakistan
Age: 23

Ayub launched Softflux back in 2000 as a one-man operation. Today the IT solutions firm offers everything from Web development services to high-end management consulting to help companies boost their profitability and the productivity of their mobile networks. It has roughly 70 employees and development associates in Beijing, Dublin, Romania, London, and Silicon Valley. Softflux’ clients include a variety of Pakistani banks and pharmaceutical companies, and Ayub plans to expand the company’s operations globally in 2007 and boost annual revenues to $120 million by the end of the decade. He is also the founder of Saltflow, a private-equity firm specializing in tech investments.

Bellamy Benedetto Budiman

Founder & Designer: Neuro-Designs

http://www.neuro-designs.com/
Jakarta, Indonesia
Age: 23

Bellamy started Neuro-Designs back in high school when he realized he had a knack for design and started doing freelance assignments. Today, the firm handles Web, print, logo, and multimedia assignments, as well as design consulting, for various clients in Indonesia. It has formed alliances with other design firms, photographers, and printing companies to better serve its clients. Neuro-Designs is also an active supporter of Godote.com, an Indonesian design community.

Surya Budiman

Chief Technical Officer: PT Asia Lintas Media

http://www.asialintasmedia.com
PT. Asia Mobile View
http://www.asiamobileview.com
Jakarta, Indonesia
Age: 25

After studying data communication and software engineering in Australia at Queensland University of Technology, and doing a stint with an IT company in Singapore, Budiman decided to run his own show in early 2005. Result: PR Asia Lintas Media, a system integration and IT solutions outfit with special expertise in satellite communication networks. Budiman is also playing a big role in the development of another company called PT Asia Mobile View that is providing content services such as news, music, and video streaming to Indonesian cell phone users.

Sasikanth Chemalamudi

CEO: Habits

http://www.habits.in
Hyderabad, India
Age: 23

A graduate with honors from the Birla Institute of Technology & Science in Pilani, Chemalamudi turned down an offer from outsourcing powerhouse Infosys to pursue his passion for entrepreneurship. He co-launched Habits, a creative learning resources company that encourages more creative thinking with the aid of educational materials such as musicals, plays, and interactive games. Habits is also involved with projects in rural India to encourage self-employment.

Rama Krishna Gaddipati

Co-founder: Bridle Information & Technology Solutions

http://www.bridleit.com/index.htm
Tenali, India
Age: 24

Bridle is a mobile applications and services outfit—and that is a good space to occupy given the explosive growth of mobile telephony in India. And Bridle co-founder Gaddipati (the 2001 winner of the Intel CyberFiesta national software development contest) may already have a hit on his hands. The service is called SchoolMATE, and it is a comprehensive student analysis system that allows parents to monitor their child’s progress at school. The service feeds information on conduct, examinations, and report cards to subscribers, and employs technology such as mobile text messaging, the Web, and e-mail. The company has gained about 70,000 subscribers in Hyderabad and Vishakapatnam in India.

Dinesh Goel

Director: Blue Ribbon Industrial

http://www.geetanjaliwoollens.com (int’l marketing site)
Indore, India
Age: 24

A recent business school graduate from Thunderbird’s Garvin School of International Management, Goel took on a major operational role with his family-run, $10 million-a-year wool products business started by his father and uncle. It’s a tough business, and the price competition is fierce. Still, since signing on as a director and key executive in February, Goel has boosted production at the company’s two manufacturing facilities by 50%, and sales are improving. He is focusing on product innovation and also looking for retail tie-ups to get wool products directly to consumers faster.

Christian K-L Yau Heilesen

CEO & Founder: Funmobile

http://www.funmobile.com
Hong Kong
Age: 22

Heilesen hit the ground running when he arrived in Hong Kong in 2002 from his native Denmark. (He is of Danish and Chinese descent.) A year later he launched Funmobile, initially as a game developer supplying mobile phone companies with content for their WAP (wireless application protocol) portals. Funmobile has since expanded overseas to developing, licensing, and distributing games, music, graphics, news, and other services sold directly to mobile phone users in Australia, Belgium, Singapore, Malaysia, Thailand, Britain, and the U.S. Today, the Funmobile group of companies employs about 185 employees and is global in reach.

Nguyen Minh Hieu

Director and Co-Founder: DreamViet

http://www.dreamviet.com
Hanoi, Vietnam
Age: 25

After spending about a year as a financial analyst for a U.S. investment firm in Vietnam, Hieu decided to strike out on his own and launched DreamViet. His vision is simply to create the best Internet company in Vietnam. The flagship product is an e-commerce research and technology guide Web site at http://www.aha.com.vn. It provides search tools to research and buy consumer electronics. DreamViet also provides Web site development advice and services for Vietnamese merchants.

Darshan Hiranandani

Director & Chief Executive Officer: Hircon International

http://www.hircon-me.com
Dubai, United Arab Emirates
Age: 24

Darshan started working for Hiranandani Group, India’s leading real-estate group and the family business, while attending high school and college in India. His deal-making synapses started firing early, however. When he was 17 he launched a go-kart track called Hakone and a family entertainment center in Bombay. He currently serves as president of the Bombay operations of Hiranandani Group. On top of that, he led the conglomerate’s expansion into Dubai, where he founded Hircon International. That company is involved in helping develop the “23 Marina” Project, which, when completed in 2008, will be the world’s tallest residential tower. In the first two years of operations, Hircon has generated more than $100 million in revenues. In Bombay, Hiranandani has projects under way that involve 300 million square feet of new developments.

Mao Kankan

Chief System Architect & Chief Executive Officer: Majoy Entertainment

http://www.majoy.cn
Beijing
Age: 23

Chinese gamers’ appetite for cool, interactive games via personal computers is pretty much bottomless. But Kankan created Majoy Entertainment in 2005 to offer an entirely different gaming experience. In Majoy’s role-playing games, participants actually gather in the same physical location and use an array of wireless digital devices to interact in a virtual gaming environment. It sometimes gets rough. Players often try to “kill” each other with digital tools such as infra-red toy pistols.

Vikas Kedia

Founder & Partner: MobiTrail

http://www.mobitrail.com
Bombay, India
Age: 25

The next big platform shift in online gaming will be to mobile handsets, and Kedia thinks his company is positioned to capture that growth. This 25-year-old programmer based in Bombay is founder of MobiTrail, which develops and delivers games to mobile phone users. Its games and applications can run on networks using J2ME, Symbian, and BREW operating systems. The company is developing some hot games of its own and has such clients as Reliant Online Gaming in India and Hong Kong-based Mobile2win, as well as other international customers.

Atul Prakash Khekade

Co-Founder: Innovation Trip

http://www.innovationtrip.com
Bombay, India
Age: 24

Khekade launched his first business, a Web technology and software applications company, at 17, and has written a book on graphical user interfaces. Now the University of Mumbai-trained engineer and scholarship recipient is trying his hand at the business tourism market. Last year he co-founded Innovation Trip, which sets up U.S.-based workshop-and-trip combos for senior executives in the developing world interested in the latest best-business practices in the States

Kentaro Iemoto

President & CEO: Clara Online

http://www.clara.ad.jp
Tokyo and Nagoya, Japan
Age: 24

Iemoto has packed plenty of drama into 24 years. Consider: At 14 he was diagnosed with a brain tumor, underwent surgery, and spent several years in a wheelchair. He pulled through, and in junior high school, at 16, he launched Clara Online with $9,000 in seed money. Today he is a well-known figure in Japanese technology circles. Clara became the first player in Japan to offer Linux-based virtual private servers connected to broadband networks and leased out to clients. Iemoto now manages six data centers in Tokyo, Nagoya, Osaka, and Seoul from offices in Japan and Taiwan. It’s hard to imagine anything slowing him down, but a newborn baby has Iemoto thinking about work-family issues for his 38 employees. At Clara, they all have the option of taking annual child-care leave.

Victor Lang

Senior Partner: Global Futures Educational Consulting

http://www.gfecinc.com
http://www.imunhk.org
Hong Kong and Chicago
Age: 22

It’s your world—fix it! That’s the kind of youthful zeal driving Global Future Educational Consulting, which provides educational materials for those interested in learning about international conflict resolutions and diplomacy. The company’s core service is hosting simulated U.N. conferences where students role-play as ambassadors and debate the issues of the day. Hong Kong native Lang splits his time between Chicago (the company’s U.S. office) and Asia. This year and next, Global Future will host “model” U.N. confabs in Chicago, Hong Kong, and Bombay.

David Lee

Chairman & Co-Founder: Team & Concepts Limited

http://www.tnc.hk/index.eis
Hong Kong
Age: 25

Lee learned something about adversity early in life. To help the family’s strapped finances, he hawked oranges on the streets of Hong Kong at age 7. Tough times, though, spawned a burning desire to succeed. In 2003, Lee and friends launched TnC, an information technology service that offers an array of online services for event planners. The company manages membership databases and online registration, sends e-mails to conference participants, and provides companies with interactive editing tools to update their Web sites. Earlier this year, it rolled out a beta version of EditGrid, a spreadsheet service where users can upload and host a spreadsheet on the Web, share it with colleagues and friends, and collaborate with other users on the same spreadsheet in real time.

Ario Pratomo

Founder: PT. Unique Kargonize

General Sales and Service Agent (Cargo) for Etihad Crystal Cargo
http://www.crystalcargo.ae
Jakarta, Indonesia
Age: 23

Pratomo has been on the fast track since he graduated early from Edith Cowan University in Australia at the age of 20. While working at Speedmark Indonesia, a freight forwarding company, he helped design a new operating system to improve the speed of bookings and tracking shipments. He was then asked to create a service agent company called Unique Kargonize to sell cargo space for a unit of Etihad Airways, the Abu Dhabi-based carrier. He is a logistics whiz to watch.

Vishal Sampat

Founder: Convonix

http://www.convonix.com
Bombay, India
Age: 24

Sampat caught the entrepreneurial bug early in life. While still in his teens, he launched his first venture, a streaming online music radio service featuring Indian tunes. His latest venture, launched in 2001, is Convonix. It is an Internet marketing firm with more than 35 employees that helps clients enhance their online traffic and get better placement in search engine results. The company has also developed its own Web analytics and campaign management programs

Hendy Setiono

Founder: Baba Rafi Indonesia

http://www.babarafi.com

Jakarta, Indonesia

Age: 23
Baba Rafi Indonesia founder Setiono is a 23-year-old in a hurry. Back in 2003 he launched the Kebab Turki Baba Rafi fast-food chain, and it now has 65 outlets across 10 cities in Indonesia. Its kebab sandwiches, as well as chicken and beef burgers, are sold in a variety of restaurant formats from portable booths to shopping center outlets. His company is also branching out to franchise business consulting. Setiono is the recipient of the Indonesia Small Medium Business Entrepreneur Award (2006) sponsored by the government.

Eric Tsai

CEO: eriQoo.com

http://www.eriQoo.com

Tokyo

Age: 21
Talk about a global mindset. Tsai was born in Taiwan, attended high school in the U.S., and picked up a degree at Sophia University in Japan. (Yes, he’s fluent in Chinese, Japanese, and English.) He blitzed through both high school and college and managed to graduate two years ahead of schedule. Tsai was then hired as the youngest fixed-income analyst on the payroll at Credit Suisse. Now, Tsai (together with 10 former Sophia classmates) has just launched a beta version of a new portal called eriQoo.com, available in both Japanese and English. (The formal launch is in September.) Tsai hopes to establish it as the can’t-miss site for all sorts of industry, brand, and product popularity ranking data provided in a reader-friendly format. If it attracts enough traffic, Tsai thinks the online advertising will follow.

Divyank Turakhia

Co-Founder, President & Director: Directi Group

http://www.directi.com

Bombay, India

Age: 24

Turakhia tried his hand at Internet consulting in high school at age 14 and, two years later, launched Directi Group with $600 borrowed from his parents. In the first month of operations, the business managed to generate enough revenues to return the borrowed amount and get the company rolling. Today, the company is debt-free, has more than 1 million customers for its array of domain name registration, Web hosting, and site building services, and employs more than 250 people. It is one of the fastest-growing domain registration companies in the world. When Turakhia isn’t running the show, he pursues hobbies such as sky diving, paragliding, and flying airplanes.

Source

Tech Stars Brighten Northern Skies

October 11, 2006

With a number of Nordic technology startups snagging eye-popping venture investments recently, one could be forgiven for feeling a sense of déjà vu. After all, in the late 1990s, Scandinavia became a breeding ground for rising European technology stars, especially in the mobile arena. But after the dot-com bubble burst, many of those entrepreneurs—and the companies they founded—fell to earth with a thud.

In recent weeks that giddy feeling has started to return to the region dubbed “Silicon Fjord.” Rebtel, a Swedish company that offers free mobile phone calls using Voice over Internet Protocol (VoIP), became the latest outfit to hit the jackpot, securing $20 million from Geneva-based Index Ventures and Benchmark Capital of Menlo Park, Calif.

Indeed, venture capital has been pouring back into the region with relish. Swedish companies alone snagged €852 million ($1.07 billion) in startup and growth capital last year, according to the European Venture Capital Association. That nearly matches the peak set in 2001 and is more than twice the amount raised in the trough year of 2003.

SECOND MARRIAGE. What’s more, this time around the startups are a lot better run. The dot-com experience reinforced the importance of having a solid business plan based on profitable, long-term growth, not just a hot fad. The crash also gave rise to a generation of entrepreneurs who lived through failure, an experience many venture capitalists consider highly educational and desirable.

“At the end of the ’90s you could do a PowerPoint presentation and get backing,” says Hjalmar Winbladh, co-founder of Rebtel, and a self-described “serial” entrepreneur who previously founded a mobile software company called SendIt that was bought by Microsoft (MSFT) for $150 million. Windbladh says it’s more difficult to get seed funding now, but argues that greater rigor is better for the long-term health of the entrepreneurial culture.

The rebirth of entrepreneurial spirit in Scandinavia is owed in part to a recent batch of inspirational success stories. The Goliath, of course, is Skype (EBAY), the VoIP software company founded by a Swede and a Dane and acquired by eBay for $2.6 billion this year. But there’s also Oslo-based Opera Software, which is a leading supplier of browsers for mobile phones and set-top boxes, and Trolltech, also in Oslo, which has carved out a niche in Linux-based software for handsets.

TAKING THEIR TIME. The main lesson learned by these Nordic startups is that there’s rarely such a thing as overnight success. Opera CEO Jon von Tetzchner and co-founder Geir Ivarsy developed one of the world’s first Web browsers in 1994 in the labs of Norway’s national phone monopoly, Telenor. But when the big telco didn’t want to take the project further, the duo struck out on their own, zeroing in on the gap in the market for browsers on mobile phones and other non-PC devices.

Telenor “gave us a flying start,” Tetzchner says, but years of hard work lay on the road to eventual success. Though Opera remains an also-ran in PC browsers, its software is now used in more than 17 million mobile phones. The publicly-traded company generated revenue of $23 million last year.

Eirik Chambe-Eng, co-founder of Trolltech, had an equally tough path. When he and co-founder Haavard Nord approached the Norwegian agency in charge of fostering startups in the mid-1990s, they were told “Guys, the job market is good, go get good jobs,” Chambe-Eng recalls. They rejected the advice, but “it was an uphill battle all the way.”

COATTAILS OF SUCCESS. It took a year before Trolltech started generating any revenue, and the pair had to rely on their wives’ incomes until the company was up and running. But it paid off: Trolltech booked sales of $17.7 million in 2005 and listed on the Oslo Stock Exchange earlier this year.

Now, industry watchers are poised for a new crop of startups to emerge from the region, inspired by the likes of Trolltech, Opera, and Skype. “Scandinavia has created world-class entrepreneurs who’ve gone on to build world-class services,” says Danny Rimer, general partner at Index Ventures, which backed Skype. “That has been amplified in the past few years. Success breeds success.”

It helps that there has been a sea change in attitude toward entrepreneurs since the dot-com bubble burst, says Rebtel’s Winbladh. “Failing is not seen as bad as before.”

MOVING ABROAD. Yet for all the inspiration and technical expertise, entrepreneurs say there are elements of Scandinavian society that still must change if entrepreneurialism is to flourish. One big sticking point: It’s tough to motivate employees by giving them stock options because options are taxed at high personal income tax rates when they’re exercised.

It’s thus “very difficult to employ people who can share the upside…which is what you need to grow,” says Winbladh. As a consequence, some entrepreneurs say, startups move headquarters abroad at their first opportunity to ensure they can attract the best talent.

There are encouraging signs of change. Many entrepreneurs say, for instance, that they expect the new center-right Swedish government to usher in a more startup-friendly environment. Others call for more collaboration between government and industry to keep the entrepreneurial breeding ground fertile. “It won’t happen on autopilot,” said Eilert Hanoa, founder of Mamut, a Norwegian company that makes business software for small to midsize enterprises.

Source

The spark is back in the north. After all, who doesn’t dream of being the next Skype?

Europe’s Young Entrepreneurs

October 9, 2006

Entrepreneurialism knows no borders. Though the popular image of the startup centers on American—and, increasingly, Asian—enterprises, Europe also is alive with small companies. All told, there are 23 million small to midsize businesses in the European Union, accounting for about 75 million jobs and much of the Continent’s employment growth. And with many large corporations increasingly sending jobs elsewhere, young people are attracted as never before to the idea of starting their own businesses.

To be sure, Europeans still tend to be more risk-averse than their counterparts in the U.S. and Asia. The culture of entrepreneurialism isn’t as well developed—nor is the infrastructure of business mentors, startup support services, and risk financing. But for a growing class of young entrepreneurs with good ideas and a strong work ethic, those impediments don’t matter. Their passion to succeed overcomes the barriers.

Governments, too, are waking up to the job-creating capacity of startup businesses. The European Commission is spurring high schools across the 25-nation bloc to offer courses in business, including encouraging students to set up small companies. Initial studies suggest that up to 20% of students enrolled in such courses try to start their own businesses after graduation.

GLOBAL PERSPECTIVE. Britain, meanwhile, is setting the pace in its support of business incubators, where entrepreneurs can set up shop in subsidized office space and work with mentors to develop their strategies and business plans. From 25 such facilities in Britain in 1996, the number has now surged to 270 around the country, according to figures from the Trade & Industry Dept. Britain also now hosts nearly 100 science parks, up from 39 in 1998.

One advantage many European entrepreneurs seem to enjoy is a more global perspective. Many are multilingual and have lived or worked abroad. “We are starting to see very interesting companies forming that are capable of competing on a global basis from day one,” says Danny Rimer, general partner at venture capital firm Index Ventures in Geneva. “It’s partly generational, but also a case of success breeding success. Companies like Skype have served as an inspiration to a whole generation.”

Since the middle of the summer, BusinessWeek.com has set out to find the best examples of this new European spirit. We asked readers to nominate outstanding entrepreneurs age 25 or younger, and now we present the candidates in a slide show that showcases their remarkably imaginative and successful businesses. You can view the presentation and cast your vote on the last page for the entrepreneur who seems the most promising. We’ll present the results of the voting in November.

FROM EUREKA TO EARNINGS. What all the nominees share is a spirit of adventure and opportunism. For many, the inspiration for their businesses came from a momentary observation that lodged in their minds and became the seed of a startup. Overflowing garbage cans in a college apartment? That gave James Gibson the idea for trash-bin liners that pop up from the bottom of the can. Partygoers trying to sleep on a beanbag chair? That was enough to inspire Matt Roberts and Irfan Badakshi to develop a plush chair that morphs into a bed.

Similar “Eureka” moments made other young entrepreneurs diverge from the safer course of corporate careers into the treacherous waters of a startup. Tristan Cowell’s mother was looking for a way to display her Christmas cards, and now the 25-year-old Brit presides over a thriving business that sells all manner of gewgaws for displaying photos on walls, refrigerators, and doors. Marvin Andrä, 24, of Saarbrücken, Germany, turned a harrowing trip to the dump into the inspiration for BagPax, removable soft-shell containers that save car owners from dirtying the trunks of their cars with refuse.

For many young entrepreneurs, starting their own companies is a way to unite different threads in their lives. That was what moved 25-year-old Karm Singh, a British-born computer science graduate of Indian heritage, to launch a Web site called Desitouch.com that features music and video from South Asia. Something like a cross between iTunes, MySpace, and YouTube, but for Bollywood productions and Bhangra music, and it has already attracted a strong following from the South Asian community at home and abroad.

THE WEB WAY. A similar passion moved Grant Lang, 24, to start a coffee company called Mozzo. Sure, Lang loves coffee. But he’s also a big believer in organic products and “Fair Trade” business practices that give growers decent wages and work conditions. He also loves art and music. So he pulled them all together into a “sustainable lifestyle” coffee brand that espouses environmental and social responsibility—and makes money.

Then there’s Lars Duursma, 24, from Rotterdam. The reigning world debate champion in the non-native English-speaker category, he has a passion for good language and clear argumentation. Now, he has leveraged his skills into a thriving consultancy that teaches politicians and corporate leaders how to communicate better.

Of course, today’s young entrepreneurs grew up with the Internet, so many of their businesses revolve around the Web. Dutchman Ben Woldring, 21, launched his first Web site at 13 and now offers his compatriots four online comparison sites that let them shop for the best rates on fixed and mobile phone service, Internet access, and utilities. Austria’s Fathi Said, 24, started a Web hosting business at 18 and lost it at 20, then started another that’s even more successful.

TRADITION THRIVES, TOO. The Web is also home to Julien Genestoux’s Jobetudiant.net, a job site aimed at French students that has already attracted 200,000 registrations. London’s Wayne Berko is running a similar site—but aimed solely at getting students and professional actors jobs as film and TV extras. And Britain’s Neil Waller has turned the notion of an online travel site on its ear. He launched Marbellainfo.com to give British travelers better information about the Spanish coastal resort city, only to discover that the locals liked using it just as much. Now he aims to launch travel-and-community sites for other popular destinations.

Despite the Web’s allure, some entrepreneurs are sticking to more traditional fare. Matthew Hubbard, 24, started a film and video production company in the West Midlands that has gotten traction producing media for special education programs. Matteo Böhme turned his love of inline skating into a thriving events-planning business in Dresden. And Joav Ben Jaakow started a business with his parents when he was 15, importing and reselling drip irrigation systems in Germany.

The variety of ideas is dazzling, and the energy and excitement of these young entrepreneurs is infectious. Take a look at our slide show to learn more, and then be sure to send a vote of support to the entrepreneur who you think has the best idea. Europe is hungry for more examples of such derring-do and optimism.

Source

Spinning Gold from Good Ideas

September 15, 2006

When Teri Willey was asked a year ago to head up a University of Cambridge offshoot that licenses the school’s research and nurtures new tech-based startups, she turned down the job. After five years working for a Chicago investment firm focusing on university spinouts, she was poised to raise a new venture fund. Plus, she had two teenagers to consider.

But when the headhunter came back six months later, Willey realized it was the chance of a lifetime to join the burgeoning technology transfer business in Britain. Now, six months into the role as head of Cambridge Enterprises, she sees herself as a talent agent for “rock stars”—albeit unlikely ones—advising faculty and the university on the best ways to manage and commercialize their scientific discoveries.

Willey’s timing was excellent. As part of its Lisbon Agenda to encourage the development of a “knowledge-based economy,” the European Union has set a target to raise research and development spending across the 25-nation bloc to 3% of GDP by 2010. Just as important as boosting overall investment, which currently stands at just 2% of GDP, the EU and its member countries are striving to push the innovations cooked up in academic and government research labs out to the private sector.

GENERATING EXCITEMENT. So far, Britain is leading other European countries in monetizing its scientific research. Universities there filed 363 patents last year, more than a quarter of the EU total, according to market researcher Thomson Scientific. And they’re managing to bring in loads of venture capital for research partnerships. In 2005 alone, they pulled in $1.9 billion in private equity investments, nearly half the European total raised by academic institutions.

Cambridge Enterprises alone filed 41 new patent applications and granted more than 40 licenses or options to license in 2005, generating income exceeding £2.7 million ($5.1 million). When it comes to technology transfer, “there are certainly more exciting financial experiments going on here than almost anywhere in the world,” says Willey.

There’s no question Europe has a rich history of technological research—indeed, without bodies like Germany’s publicly funded Frauenhofer Institute, which gave birth to the technology behind the MP3 audio format, there might be no Apple’s iPod. But until recently, academic researchers in most countries on the Continent owned the intellectual property (IP) rights to their discoveries and had surprisingly little interest in commercializing their work. Indeed, there seemed to be a cultural aversion to making money from scientific discoveries.

NEW HUNTING GROUNDS. In Britain, by contrast, most of the country’s universities retain ownership and licensing rights to the IP developed on their premises, while the inventors are given a slice of royalty revenues. This has led to quicker development of technology transfer offices at universities across the country devoted to bringing inventions to market.

It has also turned universities into fertile hunting grounds for private equity groups looking for the next big thing. Oxford University, for instance, snagged a £12 million ($22.5 million) deal this summer with Technikos, a private equity arm of Sloane Robinson investment group, to help fund its Institute of Biomedical Engineering. Sloane Robinson will provide commercial and financial advice in return for shares in future spinouts from the institute.

Thanks to these factors, Britain is experiencing a boom in companies specifically meant to bridge the gap between academic innovation and commercialization. One prominent example is U.S.-based Utek (UTK), which has opened an office near London and scours university labs for technology to meet its clients’ needs.

BATTLEFIELD TO BOARDROOM. Then there’s London-based IP Group, which has formed 42 portfolio companies from university partnerships—seven of which have listed on the Alternative Investment Market. One promising example: Proximagen, a startup developing drugs to combat Parkinson’s disease.

The British government also has gotten into the act. In 2001, it set up a private company called Qinetiq whose job is to bring defense-related technologies—some of them formerly classified—from the Ministry of Defense to the marketplace. The MoD’s legendary research labs helped invent such breakthroughs as liquid-crystal displays, thermal imaging, and carbon fiber. Publicly listed Qinetiq pulled in $150 million in pretax profits last year, on revenues of $1.97 billion, and the company is jointly funding Britain’s first “tech transfer professorship” in the physical sciences.

The rest of Europe is finally starting to catch on. Ten years ago, the very thought of partnering with industry would have been anathema in countries such as France. But now, laws to facilitate the commercialization of technology transfer have begun to change—and just as important, so have attitudes, says Antoine Papiernik, managing partner at Paris-based venture capital fund Sofinnova Partners. Likewise, in countries such as Italy and Spain, networks of technology transfer offices are working together to promote commercialization.

BRITISH ADVANTAGE. Countries that continue dragging their heels may be forced to change. With budgets under pressure, many European governments are trimming funding for academic research, forcing universities to look elsewhere for financial support. “If policies don’t adapt…research will fall by the wayside, which is why universities need to become more commercially minded,” said Mark Schneider, network manager of Proton Europe, an organization that promotes technology transfer and helps tech transfer offices work more effectively.

For academic and government technologies to reach their ultimate potential, inventors and early-stage private investors also need ready access to public markets. That’s another advantage Britain currently enjoys. Industry watchers say the Alternative Investment Market, which allows smaller companies to gain access to capital markets without strict shareholder’s equity requirements, has given the country’s universities a head start in cashing in on scientific research.

UP AND COMING. Investors in academic research looking for a quick buck may have to learn the fine art of patience, however. Private-equity groups typically expect to see investment returns in four to five years, whereas at universities it can take twice as long to bring an idea to market. “Companies are easy to set up, easy to fund and grow, but not to succeed,” said Neil Rimer, general partner and co-founder of Geneva-based Index Ventures, which seeded Innovative Silicon, a semiconductor venture that came out of Lausanne, Switzerland’s Ecole Polytechnique.

Tech transfer is catching on in Europe. Britain has got a head start—but the rest of the Continent is starting to sing from the same songbook.

Source

What Technology Does My New Business Need?

July 15, 2006

By Ramon Ray

Congratulations, you’ve opened your new business! As your hands run over the new furniture and you wrap up a few things with your lawyer and accountant, you’re probably starting to wonder what kind of computing infrastructure you should consider for your business.

Many businesses have very similar needs, which I’ll outline below. Depending on the specific needs of your business, there will be some particular technologies you’ll need that other businesses have no need for. Here are six things your business must have in the beginning in order to be successful.

Local Technology Consultant
One of the most important investments you can make is to ensure you have one or two local technology consultants who you trust, who know about your business, and who can guide you in your technology growth.

You have an accountant (for obvious reasons) and a lawyer (for even more obvious reasons)–having a local technology consultant or solution provider is no different. Get references, see what past work they’ve done and, like an employee, give the relationship time to mature to be sure they’re working in your best interest.

A good place to find small-business solution providers is at Microsoft’s Small Business Specialist Program (www.microsoft.com/smallbusiness).

High-Speed Internet Access
Every business, no matter how big or small, needs high-speed access to the internet. Having traditional dial-up access is simply too slow and too limiting for a business. High-speed internet will enable you to take advantage of online backup, VoIP and other technologies you wouldn’t be able to do at all or as efficiently with a dial-up connection.

For those businesses who are only online or do a significant amount of business online, your internet service is the life blood of your business. You must ensure that the vendor providing the service offers very reliable service and support.

Computers
Of course, you must have computers for each employee. These computers shouldn’t be slow, rinky-dink, bottom-of-the-barrel relics from the early ’90s, but should be relatively new, high-speed tools. Each computer should have plenty of memory (512MB or more), hard-disk space (80GB or more), a fast processor (2-3GHZ) and a quality screen for minimum eyestrain.

Your computers must be set up in a network with a file server and shared internet access.

Those who are dealing with large files such as graphic artists, design shops or others must have very powerful computers to be able to quickly manage and store the files. The memory you use backing up 100-word files that a very small law firm might deal with is much smaller than backing up 100 hi-resolution photos.

Data Security
It’s absolutely imperative that your businesses data is secure and backed up. Your local network and each of your computers should have a firewall (a hardware firewall for your network and at least a software-based firewall for each computer) and anti-virus software (many come bundled with features to detect phishing and other online threats as well). In addition, ensure your computers and network are configured by a local security consultant (your general knowledge solution provider might not have sufficient expertise to properly harden your computers and network from online attackers).

If you have a wireless network make sure it’s secured as well. The second phase of your security plan is to ensure all of your data is backed up and that you have a recovery plan in place. If you came to work and found nothing but a hole in the ground, what would you do? What plan would you have in place to recover your data onto other computer systems? That’s how you have to think.

If your business retains personal information of your customers, especially financial information, social security information, etc, it’s even more important that a professional security consultant work with you to ensure your information is secure. Your network must be secure, but also your online applications. Hackers can go to your website and use “back door” holes in the online software to access your database if the online application or database isn’t properly configured.

Website
Every business must have a website. If you want to start out with a very simple site that’s more like a digital brochure, that’s fine for now. But consider having a website filled with relevant information for your customers, partners and employees.

You can easily build a website on your own using tools from Homestead Technologies, Microsoft Office Liveor many other web-hosting companies. You can also hire a website developer to do this for you.

As your business grows you’ll find that filling your website with as much customer-facing information as possible will a) reduce the amount of inbound e-mail and phone calls to your business, and b) customers can serve themselves from your website and be happier.

E-Mail
One of my personal pet peeves is seeing a growing business with an AOL, Yahoo! or Hotmail e-mail address. I think it’s unprofessional, and since it’s very easy to have an e-mail address with one’s business name, there’s no excuse. Your web host can set up e-mail accounts for you as part of your web-hosting service. Or, as always, you can work with your local technology consultant.

If you’re in a regulated industry it’s vital that you have systems in place to archive your e-mail to ensure it complies with government regulations for your industry.

Source

The New Entrepreneurial Class

May 25, 2006

Time was, being an entrepreneur in Europe carried a lot more than just economic risk. In countries where social conformity prevailed and many workers sought comfortable lifetime employment, business failure often meant a permanent stigma. Even in the go-go 1990s, venture capitalists had to scour university labs and huge companies for hot technologies to spin off, and coax academics or managers to start their own companies

Now, a new breed of entrepreneur is starting to multiply, from MBA graduates determined to strike out on their own to seasoned executives eager to run their own show. In part, they’re inspired by so-called “serial entrepreneurs” — Dennis Payre, for example, the co-founder of France’s Business Objects — who are grabbing headlines as they launch second or third companies. That hardly ever used to happen in Europe .

“MAD, PASSIONATE ACT.” Business schools, too, are getting in the act of boosting Europe’s entrepreneurial base. In January, Fontainebleau-based management school INSEAD teamed up with Barcelona’s IESE to create what has been dubbed European Entrepreneurship Accelerator, a 10-week elective course that allows students to work side by side with serial entrepreneurs. “More and more students are joining business schools with the intention of becoming entrepreneurs,” says Julia Prats, professor of entrepreneurship at IESE. “In the past, we had to convert them.”

In the pilot course that took place between January and March, 20 students from the two schools joined six companies, where they worked closely with the CEO-founder on projects such as designing a business plan for a second round of venture financing.

“The impact is that in a very limited period of time, students get a fairly honest picture of what starting a company is all about — matching the business school theory with the mad, passionate act of creating and running a company,” says Peter Zabouji, INSEAD entrepreneur-in-residence, who got the idea for the Accelerator while teaching a course on writing business plans. Forty students will participate in September.

RICH IN RESOURCES. Mathieu Carenzo, an IESE graduate who took the accelerator course in January, certainly experienced the harsh reality of managing a fast-growth company. He and three fellow students landed at an Internet-related company that failed three weeks later when a fresh round of financing collapsed. Carenzo and his teammates then joined an information technology company specializing in data storage and helped the CEO write the business plan to help secure a loan from a U.S. bank.

“One thing you learn is that you can’t do everything yourself,” says the 30-year-old Frenchman, who aims to start his own company some day. “You need contacts, and you need a team.”

He should have plenty of people to pick from. At IESE, some 30% to 35% of graduates now begin their own company within five years. Creating European startups may remain tough, but today there’s more capital and talent available than ever before. The years of laying the foundation for a new industry are starting to pay off.

Source