|CAMPUS AND CULTURE
So you want to get rich off the Web?
So you want to get rich off the Web?
By Leena Kamat
Have you ever wondered how you can be added to the growing list of dot-com millionaires?
While there is no surefire way to succeed in this high-tech field, there are companies which can help the budding entrepreneur, and experts have advice for the aspiring high-tech tycoons.
The entrepreneur needs to find investors interested in providing capital to start the business. Trying to locate such resources can be a difficult experience, but there are companies out there which can help.
CanadaStartups.com is a company which connects serious investors, suppliers and skilled employees with entrepreneurs with hot new start-up ideas, said Michael Corcoran, chief executive officer and co-founder of the company.
As someone who watches and helps new entrepreneurs make it big in the business, Corcoran has some suggestions to increase the chance of success.
Studying the failures of other companies is necessary for a successful e-business he said. "People know far more because of past failures," he said. "Ninety five per cent of the dot-com companies already started, will not make it in the next two years," he said.
But these failures will bring with them important lessons. Corcoran explained failure provides hands-on lessons and many investors will only look at start-up companies with failures in their past. "Big Silicon Valley venture companies back up only companies that have failed."
Corcoran suggested entrepreneurs look at the needs of their customers first. Many companies have not succeeded because the industry is still immature and not ready for the products to go on-line yet. "There is such a thing as being ahead of your time."
The Toronto Venture Networking Group has the task of bringing together entrepreneurs and financiers. The TVNG executive director Karen Grant said she has also seen the many difficulties start-ups face when trying to set up the companies.
"Entrepreneurs should listen to the advice of others. Also, you can never prepare too much."
Another piece of advice she had might not go over too well with university students. Recently graduated entrepreneurs may want to work in the field before creating a start-up, or team up with others, who have industry experience, Grant said. "Experience still counts. A little exposure in the industry is a good thing."
Technology Investment Management Corporation, based in London, is a venture capitalist firm which invests in private, start-up companies, said Peter Day, president of TIMC. These are high risk investments, as the entrepreneurs do not have any customers and only have their brains and ideas.
TIMC receives many proposals from entrepreneurs, but realistic proposals are hard to find, Day said, adding optimism hinders a proposal from being funded. "Most entrepreneurs think they can accomplish something faster than they actually do. Most underestimate what the sale cycle will be."
There are three major items venture capitalists tend to look for when financing startups. The first item is the people involved, as they must have integrity and they have to be the right people to bring the company to success, Day said.
Second, there needs to be a reasonably large market for the product or service being offered. Third, venture capitalists look for companies which have a sustainable competitive advantage, which may include patents, he added.
Day suggested entrepreneurs take fundraising seriously. Building contacts and networking with venture capitalists carry weight when it comes to deciding on investing. Careful thoughtout plans and strategies are necessary to find investors for a start-up company. "Perseverance, persistence and timing are big things that can really pay off."
Entrepreneurs today have many new opportunities, as the federal government is committed to investing in venture capital companies, he explained. "Canada has great technology, a great pool of people and talent. And now the money is starting to come in."
One of London's biggest and youngest success stories is 12-year-old Keith Peiris, who is the founder and CEO of Cyberteks Design, a Web design company.
The biggest challenge Peiris said he faced was his age. Many people did not take him seriously and a few contracts were lost because of his youth. But that did not stop him and as a result of his hard work, the company is very successful and has won many awards for its design.
For any entrepreneurs out there, not sure if they can succeed, Peiris said to just go for it. "Explore new things and don't let age get to you. Age is not relevant in the Web business."
Day and his company have an open mind to what companies they will invest in, but he suggested some of the hot spots in the near future are automating business processes using the Internet and any wireless opportunities.
While many experts and analysts will tell the public what products are needed next to get on the millionaire list, Corcoran said he thought as long as the entrepreneur can create a market, then he or she should go for idea. "It boils down to your gut feeling on what will work."