Round
Two
Business Week Online SmallBiz, June 2004 By Amy Cortese
These entrepreneurs won't let a little failure get them down. Here's what they
learned from their
first companies,
and how they're
building new ones.
If the great stories of life, death, and rebirth were just being written today,
the entrepreneurs
who follow would
all qualify for
starring roles.
Their companies,
built in the heady
days of a booming
economy, once looked
to be slam dunks
for success.
Of course, great
stories are never
that simple. None
of these companies
became the triumphs
their founders
had hoped for.
Yet
all six entrepreneurs
-- a bit wiser,
but with no less
enthusiasm than
the first time
-- are bouncing
back. They're creating
new businesses,
and there's hardly
a regret among
them. Says Varsha
Rao, whose online
cosmetics retailer,
Eve.com, was sold
and shuttered: "In hindsight, on a relative basis, I consider it a success. We generated great
return and had
a great experience."
Like
Rao, these entrepreneurs
all look back on
their first ventures
with clear eyes
and cool heads.
They know what
worked and have
few illusions about
what went wrong.
They're happy to
share their hard-earned
lessons, and with
their new companies,
they live them
every day. They
conserve cash,
they don't try
to do too much
too fast, they
delegate -- and
they follow their
hearts.
Now,
at last, timing
may be on their
side. The economy
is picking up,
and with it, investors'
willingness to
take chances. Venture-capital
investment is rebounding,
even if many entrepreneurs
now prefer to avoid
that route. Says
You Mon Tsang,
co-founder of software
maker Biz360: "Entrepreneurs can actually start dreaming again." Dreaming -- and doing.
You
Mon Tsang
Lesson learned:
A company's business
model must emphasize
results
Age:
37
First try: Milktruck,
a software company
that developed
Internet technology
New Venture: Biz360,
makers of software
that analyzes how
a company is perceived
by the public
Where: San Mateo,
Calif.
Employees: 50
Starting
a successful venture
requires a combination
of vision and skill,
as well as good
timing. Sometimes
it takes a lot
of the former to
overcome a lack
of the latter.
Just ask You Mon
Tsang, the founder
of Biz360, a San
Mateo (Calif.)
software company
that lets companies
automatically track
and analyze their
media coverage.
In
1995, Tsang and
grad school pal
Dan Gartung co-founded
Milktruck, a company
whose software
automatically went
online during off
hours and downloaded
pre-selected content
for later viewing.
A year later, Milktruck
was purchased by
a bigger company
that sold packaged
software through
retailers. Tsang
and Gartung stayed
on as employees.
Soon PointCast,
a well-funded rival,
began to offer
a similar service
for free. No matter
how capable its
software, Milktruck's
business model
was suddenly obsolete.
Tsang and Gartung
were out of luck.
When
Tsang and Gartung
started Biz360
in 1999, they did
not want to be
blindsided again.
Tsang set stringent
ground rules for
the new company.
Biz360 would zero
in on customers
with a clear need
-- in this case,
the vice-president
for marketing or
communications.
The software had
to demonstrate
a fast return.
And to keep from
burning too much
cash, the company
would hire no more
than one employee
per client.
But
by February, 2000,
when the prototype
was ready, high-tech
marketing budgets
were evaporating.
Yet Tsang managed
to raise money
three times, for
a total of $20
million, in terrible
conditions: the
aftermath of the
September, 2000,
nasdaq crash; September,
2001; and during
the U.S. invasion
of Iraq. In each
case, Biz360 had
reassuring results
to show -- a prototype,
new customers,
and solid revenue
growth, respectively.
Today, Biz360 has
55 employees and
70 customers, including
Bank of America
and Oracle. Thanks,
no doubt, to Tsang's
market intelligence.
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