Building on a productive experiment last month, Netpreneur brought its second "business challenge" to the Coffee & DoughNets get-together at the Hyatt Regency. Respondents brought many different solutions to the table, but the bottom-line message was familiar to business start-ups: focus on your core market and dominate it. Nearly 200 netpreneurs were in attendance.

Two success stories came to the podium as Netpreneur's Penny Lewandowski kicked off the meeting: Perry Nusbaum of HeadGear Enterprises (email: HGearInfo@aol.com) announced that his company has recently raised a half-million dollars and acquired a new CEO, former Ingram Micro president David Edelman. And Michael Bruce of Didax Inc.  the announced that his company made its initial public offering earlier this month, and that Didax partnered with the Promise Keepers to offer live streaming video online of the "Stand in the Gap" rally in Washington in early October.

In September Lisa Amore, Director of Marketing for TV onthe Web was the guinea pig for the first Netpreneur "business challenge" presentation (see the recap, http://www.netpreneur.org/events/doughnets/article0930.html). She reported at this month's meeting that "we're still reaping the benefits" of the advice from fellow Netpreneurs. She said that TV onthe Web has significantly changed its marketing plan, largely using the advice they received at September's session, "but we've been so busy from the new leads we got at the meeting that we haven't had time to formally rewrite it!" TV onthe Web has developed business relationships with PSINet and Women's Connection Online, who they met at last month's meeting.

Eric Loeb, Chief Technology Officer of Net.Capitol (http://www.netcapitol.com) presented this month's "business challenge": Net.Capitol has developed a new object-oriented interface for online computing. In describing the potential power of the product for the online market, Loeb described a transaction in which a husband buys flowers for his wife simply by dragging a "bouquet" icon over the "spouse" icon on his computer desktop. The problem: how to incorporate this product into the company's existing business model, which is based on business-to-business sales and focused on archiving and aggregating public policy information for government and public affairs clients?

When the floor opened for comments, several Netpreneurs suggested exploring the partnership route, finding a company with a greater interest in interface design and working with them to develop and market the product. Among the contributions:

• Leverage the company's existing products to enter a partnership with an online service, which may be able to take the ball and run with the new idea.
• Find a use for the new product that will be useful to your existing clients, and partner with a company that can fill the use. For instance, partner with an office supply company to do online sales using your product. Mario Morino counseled that the merits of this approaches can be offset by the need to go to two separate departments in the client's organization to get the sale. This will slow down your sales cycle and could hurt the bottom line.
• Do market research within your client industry to find out whether there's a need or desire for your new product. Wait to find a partner until you've got hard data to support investing in another product line.
• Bring in new talent in the sales department which can support a new marketing model and complement the existing staff. Also, think about the ways in which you can market this to businesses, rather than directly to consumers.
• Seriously assess whether you've got the resources to develop an entirely new product, especially if you are concerned that it doesn't fit into your existing line. Do not go ahead unless you're sure you can support the new venture.
• Partner with people who already sell to the market you want to go after. Arnold Kling of the Homebuyers' Fair described his own experience with cultivating such partnerships -- "you dance, then you date, then you marry" -- and counseled patience.
• Doug Humphrey, founder of Digex, cautioned "don't bite off more than you can chew"; or else, as Morino said, "the competition will eat your lunch."
• License or sell the idea to another company so that you get some benefit from it, but don't stray from your basic market. Use a professional broker to get a good deal and retain rights to use the new product yourself.

Reflecting the clear interest throughout the group in seeing great ideas realized, Phillip Nelson suggested that the Netpreneur Program would be an ideal venue for a "database of ideas": excellent product ideas that members have but don't want to pursue themselves in order to focus on their primary business. In a discussion area, users could "drop off" good ideas that they choose not to pursue, and other netpreneurs could harvest those that fit their business models. Doug Humphrey voiced concern that venture capitalists may be averse to their start-ups "giving away" ideas that could be viewed as proprietary. Participants' ideas are the organization's continued commodity, he said. The Program team will explore implementations of this idea and how it could help netpreneurs.

After the meeting, participants were enthusiastic about contributions from seasoned startup veterans like Doug Humphrey and fresh ideas from new voices. Phillip Nelson, member of Success Unlimited Network, summed up the growing feeling of community in Netpreneurs: "I'm seeing a whole new phase, where the bright new people are working together, creating synergy, rather than throwing elbows. . . . [They are seeing that] entrepeneurs have shared values and culture, the 'you're one of us' feeling. Having gone through the hard knocks, a bonding can occur, and a sense of trust."