Business Week e.biz -- Net Worth
Can the Networking sessions First Tuesday become a profit-driven business?
It all started in a pub. Julie Meyer, a Californian working for a British venture capital firm, wanted to meet up with some of her friends in London to chat about Europe's budding Net economy. Meyer picked the hip Alphabet Bar in Soho and set the date for Tuesday, Oct. 6, 1998, the first Tuesday in October. Friends spoke to friends, and about 70 people ended up crammed into the bar's basement. "The conversation was so exciting that we decided to do it the following month," Meyer says.
Today, "First Tuesday," as the monthly event has become known, has grown into one of the world's premier Web networking organizations. Spread by word of mouth among entrepreneurs and financiers, the idea has expanded to 70 cities from Paris to Phoenix and boasts 70,000 members. Most of the events are in Europe, but groups are beginning to gather in the U.S. And the meetings have moved beyond pubs: Some are being held in large, prestigious locations like London's Lord's Cricket Grounds and Munich's main congress hall, the BNV Pavillion. "We're viral, like Hotmail or eBay," she says, referring to the free e-mail and auction services that grew wildly after early users championed them.
Indeed, the gatherings are so infectious that the 33-year-old Meyer quit her venture capital job and now is trying to turn First Tuesday into a profit-making venture. No longer will the staff be all volunteer and the revenues all corporate sponsorships. In addition to the free First Tuesday get-togethers, Meyer is offering a new series of meetings with one focused topic--and an entry fee. A conference in March on the wireless industry cost $400 per person, for example. Now, Meyer envisions publishing a First Tuesday magazine, putting out First Tuesday books, and launching First Tuesday universities that would offer courses on starting up Net companies. "Our brand can embrace almost anything," she says.
Her most ambitious plan is sure to be the most controversial. She wants to collect a slice of any venture-capital investment that originates from a First Tuesday gathering: Meyer would take 2% of any venture deal in cash. "We could easily become a billion-dollar company," she says. Similar efforts have flopped in the past. Round Zero, a networking group in Silicon Valley, considered a plan to grab venture cash for its matchmaking services, but scrapped the effort. "This is a labor of love about educational exchange, and it's better off as a nonprofit," says Nirav Tolia, the founder of Round Zero.
Maybe not for Meyer. She says 75 firms that make venture capital investments, notably Goldman Sachs and Morgan Stanley, have agreed to her 2% commission idea. "First Tuesday provides a service that gets [venture capitalists] a better deal, so they should profit as well," says Andrew Wessels, an investment manager at Wireless Internet Portfolio, a London VC firm that has agreed to the 2% fee. Her approach has been enticing enough that she has raised $1 million in seed money and says that she is finalizing a second round of financing for "north of $10 million."
Meyer may be able to succeed where others have failed because First Tuesday has a proven track record of success. A flock of promising companies has emerged from Europe's First Tuesdays. They include odd-jobs outsourcer smarterwork.com, Internet sporting-goods retailer magicalia.com, health adviser Clickmango.com, Net news provider Moreover.com, and luxury-travel site eDreams.com. "This is not a game," says Danny Lein, a Belgian venture capitalist at a First Tuesday event in Brussels. It's his fourth time at the Belgian First Tuesday meeting. Already, he has found a business he wants to fund, an insurance marketplace called Assurweb.
Entrepreneurs don't just come to First Tuesdays for money--they want skilled workers, too. "This is a great place to pick up the business cards of top-flight talent," says Arnaud Valemduc, founder of Casius, a business-to-business marketplace for the construction industry. Valemduc attended the same gathering in Brussels in part to find a top financial officer. Among the companies that have recruited top executives at First Tuesday events are London-based Peoplesound, an online agency for up-and-coming talent in the music industry, and Lastminute.com, which sells cut-rate airline tickets, hotel rooms, and other goods just a few days before they need to be used.
With that kind of draw, applications to run First Tuesday branches are piling in. Stefan Hansen was running a Web agency in Copenhagen when he read about First Tuesday. "It sounded like a neat idea, so I sent Julie an e-mail asking whether I could organize one here," he recalls. Now Hanson is overseeing 15 regular gatherings in Scandanavia, and he expects that to increase to 25 by the end of the year.
In the U. S., Meyer thinks her best business prospects are far from Silicon Valley, in less wired cities that don't have networking organizations. She recently picked licensees for Chicago, Detroit, and Phoenix. "These towns want to transition out of the Old Economy to the new," says Meyer. From the Alphabet Bar in London's Soho to the Motor City, Meyer has taken her budding company farther than even she expected.e.biz online
A Q & A with First Tuesday's Julie Meyer at ebiz.businessweek.com.By William EchiksonReturn to top