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Q: Are you surprised how quickly First Tuesday caught on? A: Yes. Who would have ever thought that networking would be so hot and that I would be able to leave my venture-capital job to do First Tuesday full-time? We're like eBay. We are organic, viral. We're spreading so fast -- without spending a dollar on marketing. And we're already financially sound -- in the fourth quarter of last year, we got $500,000 in corporate sponsorships. So like eBay, we can be profitable right from the beginning. Q: How did you get from California to London and start First Tuesday? A: After I graduated from college in California, I settled in Paris and worked in advertising. I went back to Boston in 1993 and worked for a year, but I wanted to return to Europe. So I went to the French business school INSEAD in 1997. When I was finished, I was hell-bent on doing Internet investing. I went to Silicon Valley and saw they were at least two years ahead and thought there was more room in Europe for initiative. When I returned to London, Tim Jackson offered me a job at his Internet-auction startup QXL. I refused. What a mistake. [QXL is now Europe's largest Internet-auction site, ahead of eBay.] I ended up working with British investment bankers at a firm called New Media Investors. They were investing in Internet, and they invested in lastminute.com. I met lastminute.com's founder, Brent Hoberman. While in Silicon Valley, I had heard about Drinks Exchange and other meeting groups and said, "Why don't we do something similar here in Europe?" Q: So how was First Tuesday created? A: I decided with some friends to pull together our network and a drinks night. It was to be nothing commercial. We met on the first Tuesday of October, 1998, in the Alphabet Bar in Soho -- we took over the entire basement. Everyone had to pay for his or her own drinks. Many more people came than expected, and everybody had a great time. Brent Hoberman and Martha Lane, founders of lastminute.com, spoke about their company -- it was exhilarating. At the time, it was hard to get funding in Europe for Internet ventures. We all felt a type of camaraderie. Q: What makes First Tuesday different from Silicon Valley groups such as Drinks Exchange and Churchill Club? A: Silicon Valley considers itself the center of universe. It is one big network -- they didn't need such a group. That wasn't true in Europe. Here, the right people needed a place to meet each other. Q: Is First Tuesday just for entrepreneurs wanting to raise money? A: No, many entrepreneurs also use it to recruit executives. Peoplesound, the British music e-venture, found its COO at First Tuesday. Lastminute.com found its international managing director. And of course, we have lots of successful companies founded thanks to us: There's smarterwork.com, which outsources odd jobs. There's Magicalia, a hobby site for golf, tennis, and other sports. There's moreover.com, which aggregates news articles. There's clickmango, a health-food and health site. There's lastorders.com, which has last-minute orders for beer and wine. There's so many. Q: Why turn it into a business? A: By the spring of 1999, we were being noticed in the newspapers. At a breakfast meeting, a venture capitalist offered me $1 million for the right to take over the group. That VC gave me the kick. He saw the business as backable. I was caught off guard. I was happy working at the VC firm and [wasn't] looking to do this. But I didn't want my baby taken away, so I sat down then and wrote up my own business plan. Most of my other original partners preferred to move onto other things, so I ended up doing this full-time. I see this as creating the first real, efficient global marketplace for entrepreneurs, capital, talent, tech, and resources. It will enable the smartest money and smartest people outside of Silicon Valley to get together. Q: How much financing have you gotten? A: We've had a first round of $1 million and are finalizing a new investment round north of $10 million. Q: What's your plan for revenues? A: Until now, all our revenues have been sponsorship. We're going to begin to charge fees for some tightly focused matchmaking events -- for instance, at a recent Berlin meeting for wireless, we charged $400 for entry. Also, we plan to charge 2% of money raised. Many VCs already have signed on. This is on a per-deal basis, for anything they launch via First Tuesday. Other obvious businesses include a jobs listing, an office exchange, and so on. We're grouping together all underutilized office space throughout Europe. The beauty of the business model is that we're profitable right away and that the brand can be expanded to include almost everything. Long term, our plan is to move sponsorship down to only about 10% of revenues. Q: How international do you plan to become? A: Well, we're already in 70 cities. We're working on a licensee model with Pricewaterhouse. The licensees will be responsible for different areas, and we'll have a matrix organization. We're thinking of selling franchises. Q: Do you plan to go to the U.S., too? A: Tonight, we're launching in Chicago. I think networking is no great epiphany in the U.S. because it's part of everybody's daily life. On the other hand, there are areas that could use help. We're targeting Detroit and other cities that are trying to make the transition out of the Old Economy to the New. Our goal is to make geography irrelevant. Smart people anywhere should be able to find smart money. Q: And what about yourself. Do you plan to return to the U.S.? A: No. I love [being] an American, but this is too exciting to go back to the States. I'm learning like a cat, and I think I'm making a difference for Europe. I'm helping level the playing field and giving Europeans an opportunity to take risks. |
