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Last Updated: Monday, 23 October 2006, 22:18 GMT 23:18 UK
Second Tuesday turns back dotcom clock
By Nigel Cassidy
Business reporter, BBC News

Money and computer
Is the cash coming back to the dotcom world?

Wear a red sticker if you are pitching ideas. Green if you have the money to back them.

That was just about the only ground rule six or seven years ago, when thousands of young online business wannabes flocked to First Tuesday events for evenings that were little more than business speed-dating.

As the internet fever raged, the meetings spread all over Europe, only to die out when the online bubble burst.

But now, with business models recalculated and investors rejuvenated, the dotcom parties have been revived in London as Second Chance Tuesday.

'Gagging to profit'

On the face of it, today's Second Chance Tuesday bears many of the hallmarks of the original heady events to which it pays cheeky homage.

There are the 225 entrepreneurs and investors, suitably badged and stickered, stuffed into a meeting hall at Congress House in central London.

Their mission is not simply to raise funds but to swap business cards, gossip and pick brains, seeing what they can learn from online enterprises that have already had financial success.

Around 1999, there was still a belief that the conventional rules of economics no longer applied in the 'new economy'

This time the guest speaker was Saul Klein, a leading light from Skype, the internet telephony innovator recently snapped up by eBay.

It is probably that one single Skype deal which has most excited the new wave of technology, media and telecoms entrepreneurs - not to mention the ever-circling hosts of investors, bankers and advisers gagging to profit from their dreams.

The unspoken thought in the mind of every entrepreneur is simple.

"If Skype can net the equivalent of well over 2bn before most people have even adopted its technology, then what can I make from my idea?"

New dawn

Around 1999, there was still a belief that the conventional rules of economics no longer applied in the "new economy".

In fact, it seemed as if the more of other people's cash you could burn through in the development stage, the better.

The rapid rise and precipitous fall of the likes of boo.com, clickmango and the rest put paid to that idea.

Boo.com screenshot
Many e-commerce ideas quickly went from boom to bust

A notable survivor from that era is the online lingerie retailer figleaves.com. One of the firm's founders, Michael Ross, attended those early First Tuesday meetings, but failed to find a business benefactor at the time.

With hindsight, Mr Ross says that he was glad he had to grow the business slowly, using its own cashflow.

"It was a very odd time when a lot of people raised a lot of money and spent it very quickly, on the basis that it would be easy to raise more," said Mr Ross.

"But then the market charged and they went bust."

'Start-up costs'

Now that the industry has matured, there seems to be a better collective understanding of what it takes to operate a successful technology business.

Judith Clegg from Glasshouse, the firm that has organised the Second Chance Tuesday event, explained that technological advances have helped.

"Broadband access is mainstream, so this time round, there is real consumer demand," she said. "Many ideas that proved unsustainable six years ago are now viable. Start-up costs for businesses are also much lower."

What kind of business idea might be the next Skype and make its owners a cool couple of billion pounds?

Skype's Saul Klein agrees.

At the Second Chance event, he reminded his audience that when he started working with technology, Demon Internet was the largest ISP with just 5,000 dial-up subscribers.

"The technical costs involved in proving and establishing an enterprise are much smaller. A lot of far more experienced people are available out there to work with you, so staff costs are more reasonable. Marketing can also be far more effective."

'Working product'

At Second Chance, there is plenty of selling going on and there are rumours of two unnamed businesses touting themselves for 10m.

Today's reality is that before handing over the cash, backers want to be shown that a concept works, that it cannot easily be copied, and when exactly it will go into profit.

As a result, start-ups seeking that level of investment now tend to be at a fairly advanced and proven stage of development.

One such success story was that of Moixa Energy, a new British battery company that has invented a AA cell that simply recharges directly from the USB port of your PC or laptop.

Designer Chris Wright said: "There's something visceral about being able to show a working product to investors, so they can see for themselves that it will sell - and that you have already got protection for the intellectual property involved."

Party like it's 1999

The question that still needs answering is - what kind of business idea might be the next Skype and make its owners a cool couple of billion pounds?

I asked Judy Gibbons, an influential venture investor at Accel Partners, which recently backed the Internet personalisation service netvibes.com.

"We like experienced entrepreneurs with a strong vision and good ideas that are easily explained and scaleable across Europe or globally," Ms Gibbons said.

"We like ideas that employ the new generation of software, taking advantage of what the Internet makes uniquely possible."

Partying like it's 1999 was exhausting and by now my voice was hoarse.

But as I fought my way to the exit door, weighed down by a pocketful of new business cards, it struck me that all these new-fangled online social networks aren't quite what they're cracked up to be.

It seems that after all this time, web junkies still prefer to meet each other face-to-face in a crowded room.

Partying like it's 1999
12 Feb 06 |  Business
First Tuesday is sold - again
14 Feb 01 |  Business

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