November 7, 1997
A CLUB THAT HELPS NET ENTREPRENEURS GET GOING
Edited by Dennis Berman
Lisa Amore isn't the type to spill company secrets in public. But at a recent
meeting of the Washington (D.C.)-based Netpreneur Program, the marketing
director appealed to competitors for help. The problem: Her company, TV on the
Web, was having difficulty convincing clients about the value of using TV
footage over the Internet. Immediately, audience members offered suggestions.
And some even called later to give Amore client leads. "It's not like other
business groups," says Amore, "People want to help."
This novel approach to business is starting to catch on. As many as 850
high-tech companies in the mid-Atlantic region, from New York to Virginia, have
registered with Netpreneur since January. The free program, funded by MCI
Telecommunications Corp. and the nonprofit Morino Institute in Reston, Va.,
provides guidance and more formal instruction for the growing crowd of
entrepreneurs trying to make a fortune on the Internet. On Nov. 12, for example,
the group will host an Internet investing forum at the 1997 Mid-Atlantic Venture
Fair, a two-day venture-capital meeting in Tysons Corner, Va. "The Net is
changing the way businesses grow," says Neil Oatley, a vice-president for the
Morino Institute. "And Netpreneurs need different types of support."
At Netpreneur gatherings, there's plenty of hand-holding. The group has frequent
meetings where business execs swap stories. It recently launched a barter board
for cash-strapped firms. And a few members now even operate as a "consortium" --
bidding on jobs as one group, rather than as separate companies. "Some people
were having trouble promoting themselves," says Gail W. Houck, president of
Houck & Associates, a Alexandria-based company that designs Web pages and teams
up with companies such as TV on the Web. "By the next week, we had a marketing
team."
Some companies even credit the program for the bulk of their success.
superSonic BOOM, a Web site that custom-designs CDs, in late October received
nearly $500,000 in first-stage financing from an angel investor located through
Netpreneur's NET-INVEST -- a Web-based service that matches netpreneurs and
investors via E-mail. The company was started by four twentysomething
netpreneurs who quit day jobs and sank $75,000 in personal savings and
credit-card advances into the venture. On their site, customers can pick from a
menu of music and design their own CDs -- much like people make so-called mix
tapes. The group is now gearing up for its first Christmas selling season. "We
would have never found the financing without the Netpreneur program," says
partner Julie MacKinnon. Their angel investor now serves as chairman of the
board.
These partnerships are music to Mario Morino, a software entrepreneur who helped
found the program. "There's a new breed of entrepreneur hitting the streets,"
says Morino. In 1995, Morino sold his Herndon (Va.)-based Legent Corp. to
Computer Associates for $1.8 billion -- leaving him with an $80 million fortune.
In turn, he founded the Morino Institute, a nonprofit think tank dedicated to
exploring the digital economy. His group also plays a large role in promoting
Washington, D.C., as a new high-tech hub for digital information. In fact, his
group estimates that more than 50% of all Internet traffic passes through the
region, with America Online, UUNet Technologies, and PSINet Inc. based nearby.
Even outsiders are taking notice. "We're putting Washington on our list of top
places to watch," says Charles A. Polachi, managing partner of Fenwick Patners,
a high-tech executive search firm in Boston, Mass.
Of course, an institution like Netpreneur is no guarantee of a startup's
success. Many members are likely to fail amidst the cutthroat competition of the
Digital Age. But for now, the Netprenuer program may be the safety net some
young companies need to stay afloat.
By Mary Beth Regan in Washington
