We have all longed for being at the right place at the right time with the right idea (or even without). And we have all been in awe of one-man-army in a cellar, attic or garage start-ups, which have made it big like lightning. But on the other hand, quite a a sizeable majority of us have also seen the dot-coms rise from nowhere, and plunge into nowhere taking everyone who held on to them, along. So, even though buzzwords such as Silicon Valley, venture capital and internet start-ups do make our ears rise, they also make our upper lip twitch in a disapproving fashion and write them off, prima facie. One could only imagine what fate these buzzwords would meet when they fall on the ears of seasoned investors, most of the time. This may sound like the most sensible thing to do. But for new entrepreneurs and wannabes alike, this means something else.

 

The next generation of dot-coms and internet start-ups has to turn a lot smarter, coming up with ideas which will not need them to make a beeline at venture capitalist outfits. So, when Guy Kawasaki interviewed four such enterprises, it did not fascinate me as much that these four entrepreneurs did not need any venture capital. It is, but the line of thought, or the concept behind these businesses, which makes one think. The commonality between these businesses is quite striking, for all the differences it has with the previous dot-com boom of the late 90s.

 

I’ll first make it easy for you, by illustrating these four businesses in brief, and then move on to the point – the commonalities and how are they different from the dot-com-boomers. Fark.com which was founded by Drew Curtis sources wacky and humorous stories from anyone and everyone on the internet. He has managed to get over 50 million unique page views a month from four million unique visitors. Markus Frind put up a free online dating site called Plenty of Fish, scoring 1.2 billion page views a month from 50 million unique visitors. The biggest single cheque he received from Google AdSense is of $ 900,000 for two months, he’s cited.

 

Hi5.com, an internet social network which had been up way before Orkut and Facebook, is founded by Ramu Yalamanchi. Now the site is No. 1 in seven countries and has 35 million unique visitors and 12 billion pages. Although he did need to raise $ 250,000 the hard way after the tech bust, back in 2003, but this sum is minuscule compared to the humongous funds attracted by its other dot-com predecessors.

 

And finally, Mogad, founded by Lucas Ryan, Yan-David Erlich and Blake Commagere, which has tasted a few failures, before it came up with a successful project. This project is a plug-in to the social networking site Facebook, which has grown popular in no time. The Facebook plug-ins Vampires and Zombies are social games, which have attracted 20 million users in just five months.

 

These are the four businesses that Dean Takahashi’s Tech Talk Blog talks about. Now let us get on to the common string that I made a mention of. All four businesses derive their revenues from internet advertising, and the likes of Google AdSense. All four businesses have focused not on internet’s use for business, but for leisure and lifestyle – a mode of entertainment: quite obvious, eh? Here’s the catch. What remains at the centre-stage in all four of these businesses is the user. And here’s the big known secret: the most probable users of these services would be youngsters. That’s precisely why the revenue model of these businesses does not depend on charging its users directly, but by selling ad-space to those who vie to sell their stuff to these users. Rings a bell?

 

This strategy of attracting youngsters leads us to the long tail of consumption, and the fact that youngsters make up a large proportion of the consumer class. Converting young users into consumers would inculcate into brand loyalty when they grow old, and the tail is really long. But you get my point. The high amount of involvement of the user in creating their own online experience is the key to the success of these businesses. And this is precisely what makes them different from the dot-com-boomers. Even among the erstwhile businesses, those which survived the dot-com boom include the likes of Amazon.com and eBay – perhaps they caught the trend pretty early on.

 

For all those who thought it was the technology which drives technology companies, this may come as a wake-up call. It is, no doubt, the users. So much for the ego of each user, that these people who pampered them do not even need a venture capitalist!