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Copyright 1996-2003 Morino Institute. All rights reserved.

Statements made at Netpreneur events and recorded here reflect solely the views of the speakers and have not been reviewed or researched for accuracy or truthfulness. These statements in no way reflect the opinions or beliefs of the Morino Institute, Netpreneur.org or any of their affiliates, agents, officers or directors. The transcript is provided "as is" and your use is at your own risk.  

Panelists:
Susan DeFife: founder, president, and CEO of Women's Connection Online
Raul Fernandez: founder and CEO of Proxicom
Nat Kannan: founder and CEO of University Online Publishing
Rob McGovern: president and CEO of CareerBuilder, Inc.

Moderator:
Esther Smith: founder of Washington Technology and editor-at-large of TechNews, Inc.

Closing Remarks:
Mario Morino: Chairman of the Morino Institute

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part 1: Introductions

Ms. Mayor: Good evening, my name is Mara Mayor, and as director of the Smithsonian Associates (http://www.si.edu/youandsi/join/tsa/start.htm), it's my great pleasure to welcome you to a very special evening with influential insiders from the new world of netpreneurship. It's probably seven or eight months since we first started talking with the Morino Institute (http://www.morino.org) and The Netpreneur Program (http://netpreneur.org) about programs that we could offer together. We realized that we had a common interest, and our goal with this program is to build awareness of the potential this new environment holds for those who want to apply their skills in new ways. We believe that the partnership begun with this program is just the beginning of an ongoing relationship and we look forward to doing many programs together. We hope that you will be there for them.

At the Smithsonian Resident Associate program we do some 1,500 different lectures, seminars, events of all sorts in and around the National Mall on just about every subject, including an upcoming eight-part series that will begin this spring on artificial intelligence. It brings to the Smithsonian leaders in the field, from Nils Nilsson of Stanford to George Lugar at the University of New Mexico, to talk about what is happening in this rapidly changing world. We do hope that you will think about that program, and if you do, we'd love to see you there as well.

And now to begin our evening, I'd like to introduce the remarkable Esther Smith. Her leadership has helped position the Washington corridor as an important center of entrepreneurship and creativity in the world of technology. She is founder of the newspaper Washington Technology, as well as the Washington Business Journal. Esther currently is editor-at-large of TechNews, Inc., and a senior advisor to the Morino Institute. Her knowledge of the online environment and the possibilities for doing business on it make her the perfect panel moderator. Please join me in welcoming to the Smithsonian, Esther Smith and our illustrious panel.


Ms. Smith: I can't tell you what a pleasure it is tonight to help represent the Netpreneur program at the Smithsonian. This is a wonderful opportunity for us to infuse the broader community with some of the energy that you are going to see and experience tonight. In fact, if there is one word that describes netpreneurship and the Netpreneur Program, it is energy. I'm sure you'll agree with me before tonight is over.

We have four panelists, Susan DeFife, Nat Kannan, Raul Fernandez and Rob McGovern. Let me give you a brief overview of the kinds of companies that you will be hearing about. They are typical of the breadth and scope and excitement of the Internet industry.

Susan DeFife, of Women's Connection Online, has the premiere portal site, the doorway to the Internet, for the top end of the women's market—professional women, executives and women business owners.

Nat Kannan has created University Online Publishing, a company that specializes in university level courses as well as training courses for self-education, representing a number of institutions.

Raul Fernandez's company, Proxicom, started off creating Internet sites and services for people who wanted to have a presence on the Net, and won the first Clio awarded for the design of an Internet site. Proxicom has grown so fast that he has been able to open an office and an outpost in New York's new media center at 55 Broad, which has already doubled in size since they got there.

Rob McGovern is the founder of CareerBuilder, an online product company that matches buyers and sellers of the greatest kind of capital out there, intellectual capital.

As you look at the spectrum of their businesses, I think you'll see that this is not about hardware or software or even about communications. It's about the convergence of talent, content, enabling technology and the spirit of the entrepreneur.

To begin the program tonight, we have Susan DeFife, the president of Women's Connection Online.


part 2: The Panelists

Susan DeFife: Riding The Roller Coaster

Thank you, Esther. As I was preparing for this evening, one of the things that I thought I would do is try to describe what it's like to be a netpreneur. As I was doing that, I was trying to figure out what would be the best analogy. What I finally decided upon was the amusement park's super roller coaster ride. You know, the ones where you are standing in line and they have the warning signs. Being a Netpreneur is no different. The warning, if you are faint of stomach or faint of heart, is don't get on this ride. Okay, you've been warned but as you stand there, you're looking at that ride and you're thinking, I don't want it to take off without me.

So you sit down on that ride. There are no safety belts. Your heart starts pounding. You're anticipating what lies before you. You see your friends standing on a platform and they're the ones looking at you like you're absolutely nuts. And they say, "I wouldn't get on this ride in a million years."

The ride takes off, you look back at the platform, there's your supportive family. I mean that seriously, but they're the ones with their hands to their heads saying, "Oh, my God! What are we in for?" Your parents are the ones with their hands over their eyes saying, "I can't look! Tell me when this is over." And the ride starts out slow enough, you're going straight uphill, the chain is clicking as you move forward. And you're thinking, "This seems okay."

And you get real confident, and you take your hands off the bar, put them up in the air. And then you get to the top of the first hill and the car kind of slows down a little bit, straightens out, and all of a sudden you are rocketed forward, as your company grows and as the industry changes around you.

Your first round of funding or that first contract catapults you around these hairpin curves and moves you through the loops as you go upside down. And, all of a sudden, you're holding on to that bar for dear life.

Then you come to the next hill and the car slows down. You've got some time to breathe before the next surge of speed. And just like the roller coaster, being a netpreneur means that the hills and the valleys are incredibly high and incredibly low. And every time you climb one of those hills, you think it can't possibly be any higher than the hill you just left behind and that valley can't possibly be any lower.

Well, surprise, they always are. And sometimes those highs and lows occur within hours of each other. It is one of the scariest and one of the most thrilling rides that you'll ever be on in your life. No matter how low the valleys are, none of us would have traded that ride for anything in the world. Most entrepreneurs, when the ride is over, run to get back on again.

I'm an entrepreneur for a lot of reasons. Mostly because I wanted to build something. In my case, I can't discount the gene pool. My grandfathers, both of them, and my father were, or are, entrepreneurs. I'm a netpreneur, though, because of the exciting nature of the industry. It's an opportunity to be part of an historic sea change, a change in the way we communicate, the way we gather information and the way we do business. It is, in short, the most thrilling of the entrepreneurial rides.

Women's Connection Online is a rapidly growing online community that targets professional women and women business owners. We received our first round of venture capital funding last May and have since built a team of seven that includes a former USA Today editor, a former community builder from AOL, and the former deputy director of the National Women's Business Counsel. While we are still a small site in terms of traffic, we have grown 2,300% since last May and we continue to grow at about 30% a month.

To give you an example of some of the highs and lows of being a netpreneur, it took six months for my business partner, Gary LeFever, and me to raise the capital for the company. From what I gather, that's not long, but to us it seemed like forever. After six months without pay and no revenues to speak of, we were out of time and money. This was last April. And we were within two weeks of shutting the company down when we got a call from Marc Benson at Mid-Atlantic Venture Funds who called to say that they were proceeding to due diligence in the process of funding.

Now, that didn't mean we had funding, but it was a huge step forward for us. I was confident that we could pass the due diligence phase if we could just get there. When Mid-Atlantic called to say we were getting the investment, it was important. But it wasn't nearly as important or as pivotal for us as that call saying they were proceeding to due diligence.

Mid-Atlantic and four individual investors believed in our company and gave us the opportunity to pursue our vision. And no matter how far this company goes and no matter what we face, I will never forget that first call from Marc Benson. And I don't lose sight of the fact that many companies never get the opportunity that we have and I know that we almost didn't.

Fast forward one year. We are the leading Web site in our space. Traffic is growing fast. We've got some major corporate partnerships with companies like IBM and National Discount Brokers. We are still working on the revenues. When people ask us if we are a nonprofit organization, we say, "Not on purpose."

One of the keys in keeping our sanity on this roller coaster ride has been the Netpreneur Program and I'd just like to say a couple of words about that tonight. It's an organization of netpreneurs who support one another and who understand what each of us is going through. I urge any of you who are thinking about starting your own company in the Internet area, or who may have one already, to get involved with the Program. Try as they might and as supportive as they might be, your friends and family just don't know what it's like to be you in this situation.

Within the Netpreneur Program community, there are people who know what it feels like to get hammered by potential investors. There are people who get as excited as you do about the new technology. They really understand what that first contract or that first investment really means and how it impacts your company's credibility. There's a "been there, done that" experience to be shared and there are companies who want to do business with you.

What's going on in this area with the Netpreneur Program, with the technological achievements we have made, is amazing. It's not just the growth of the technology industry but, more importantly, I think it's the culture that's evolving, the people who are helping to make this happen, those who are making the threads of a very vibrant and a very strong network. The Netpreneur Program has been a catalyst in that culture change. As we're building our own companies, we're working together to build a community that does business together, that fosters younger companies and, ultimately, which will invest in those companies. For me, it's not only a chance to be in on a new revolution, but to be involved in the early stages of a new center of the revolution.

In closing, I'd like to leave you with one thought. Temple University used to have a great slogan when promoting its famous graduates, like Bill Cosby: "They could have gone anywhere, but they chose Temple." It's the same for the companies that are growing up in this area. We could be anywhere, but we choose to be here. And I look forward to sharing more of our experiences with you in the question and answer period. Thank you.


Nat Kannan: Chasing The White Whale

Thank you. I truly appreciate being selected to share some ideas and thoughts about what it is to be a netpreneur. I have derived a lot of enthusiasm and energy from some of the model entrepreneurs in this area.

There is an old saying that only those who have succeeded are remembered. We don't have a Tomb of Unknown Entrepreneurs. A lot of them fail; it's the nature of the beast. It's something that we all have to live with. We never hear about the failures, simply because they just fade away, or they reincarnate themselves if they are crazy enough to start all over again. It's a triumph of hope against experience.

This has been a very long uphill struggle for me as an entrepreneur. I was inspired—unfortunately—by reading Moby Dick, that if you only find the right whale and you chase long enough, you will find it. Or you'll get killed in the process. The whale that I was chasing was to transform education worldwide. I had a very personal agenda. I come from India. A lot of people want to come to America for its great access to higher education, but only one out of 10,000 can afford to do so. I'm one of those fortunate ones. Others are willing to pay to get that access to education, one of the crown jewels of the American economy. And it's a tremendous commodity for export and a huge testimonial to American ingenuity for creating a free-form education system that's the envy of the world.

For 20 years, I had obsessed over the idea of somehow capturing that sense of American higher education and making it available in countries like India through distance education. It was not until Internet came on the scene that this became really possible. Sure, there was satellite TV and all the other forms of outreach, but they are very expensive. I was obsessed with somehow succeeding in this, at all costs, all expense.

Every time I got discouraged in this long struggle, I thought of the great American entrepreneurs, Lewis and Clark and their search for a passage to the Pacific Northwest—the struggles they went through, the absolutely hopeless days when they had just reached the Continental Divide and had to climb a huge mountain to get to the Columbia River. They didn't even have horses. They had to find a tribe which had horses. They had to send scouts. The scouts got killed. Such high risk. You feel really fortunate that they did what they did and succeeded. It's amazing that they were able to succeed in such an uncertain and hostile environment.

Everything that I faced as an entrepreneur melted away, and I said, "It's nothing compared to what they had done." Reading about them, and looking at my own experience, I have created my own philosophy towards entrepreneurship, that it's an art form. It's a dynamic art form. It's almost as intricate as composing a symphony or choreographing a ballet—assembling the right talent and putting together something that sounds great or is accepted visually by an audience.

The real fact is that, in our case, the audience is a marketplace. The process is Darwinian and it's merciless. It decides. No matter what your great idea is, it eventually either makes you a winner or condemns you to failure. No one can figure out what a marketplace will buy up front. We can identify a need and a market; we can forecast it to be the size of Texas; we can design a product and the venture capitalists can be ready to write checks. Everything looks hunky-dory, but people don't buy it and you can't figure out why they don't buy it.

I don't think anybody can actually forecast what people will buy. The only advice I have for you entrepreneurs is to mentally visualize how a check goes from the end user—who is getting some value for your product or service—to your bank account. If you can't trace it, don't get into business.

Constantly tell yourself that you are willing to endure the costs of entrepreneurship, which is countless hours, a great deal of pathological commitment, and a lot of dealings with a preponderance of naysayers . . . who tend to be the majority of the whole population. You have to swim against all of these currents, keep your spirits up and hope for the best when you go out in the marketplace. It's brutal.

I have discovered that the simpler the idea and the easier it is to communicate to the market, the better it is—whether it's a capital market or the people who buy your products and services. If you can't tell someone what you do as a company very quickly, in a 20 to 30-minute presentation or a one-minute summary, you don't have a real business or a unique value proposition. You have a business if you can figure out what it is that you are offering, how it is valuable so that they will write you a check, and why they are happy enough with the product to write you a second check.

If you get a third check, then you are ready to retire.

Being an entrepreneur is to decide up front that you want to do this, and if you are taking other people's money, the sole purpose of entrepreneurship is to create wealth.

Let me talk a little about the Net. Until the Internet came along, we were struggling with a lack of distribution channels for education. When the network hit the scene—it was instantaneous—I could actually create something of value and have it available worldwide, immediately with a zero marginal distribution cost. That was not possible before in the history of human race. It couldn't be done until the network, which I consider the greatest gift that the American taxpayers have ever given to human kind . . . other than digital computers, the radar satellites, I can go on and on. So, thanks to the American taxpayers for funding open-ended research, such as the network. This network made it possible for things to be scaled. That's the favorite word on Wall Street today; you can scale your ideas globally.

No longer the markets are limited to nation states. Any idea that's valid in Northern Virginia, that can generate a customer in Northern Virginia, should be able to do so in Kazakhstan. That's the power of the Net. Anything can be digitized—including, one of these days, the "Beam me up, Scotty" stuff—can be sent via the Net across the globe. The information travels at the speed of sound.

The fundamental purpose of entrepreneurship is to create wealth, both for yourself and for the investors who are willing to hand over money in the greatest act of trust. My own estimate is that somewhere in the neighborhood of $12 trillion of wealth will be created in the United States, alone, in the next 25 years. All because of the network. So, you sit down and figure out how much of that $12 trillion you want before you start a business. One percent, wouldn't be bad. And you know what? You haven't even seen the beginnings of this new wealth and opportunity. So, sit down with an idea. Think about its global possibilities; think about ideas that are truly universal, that can be launched as a business. Any idea that can create a customer in one location, you can create anywhere else around the globe. And if you can't use the Net, put the network to use in some fashion. You really are seriously undervalued and underselling the potential of your business without it.

By the way, I also think that the network has two very big handicaps. One is that good news spreads fast, and bad news spreads faster. If you don't have a product or a service that is absolutely rock solid, the chance that you will go out of business is virtually instantaneous. People can cut you off. The other handicap, which is turning out to be a nightmare for a lot of accountants, is that for the first time a consumer buys something when they are clicking a mouse on an icon. Until they make a choice to click on an icon that belongs to you, they haven't bought anything. All you have is an inventory of billions of bytes sitting on your server, and the electrons haven't crossed over the boundary of business. Those inventories are worthless bytes of information until somebody at the other end actually clicks. Then the act of purchase occurs instantaneously and electrons speed up across the network and the dollars speed up on the other side, back to your bank account.

This is a truly amazing business. I'm doing a thought experiment right now. Is it possible to create a $1 billion business with just one person, a one-employee company? I think it is. I don't know how to do it, but I believe, I believe. That's my next big whale.


Raul Fernandez: Darwinism On Steroids

You've heard Susan and Nat talk about how their businesses are radically changing the ways in which people collaborate, communicate, teach and learn. But the need for constant change does not stop at the door of our companies. Change needs to happen every day in our business lives, as we examine the competitive landscape and the current and future value that our product and service has to our clients.

In 1996, Proxicom was an early entrant in the Web site design space. At the time, Web site development was viewed as an advertising and communications-oriented industry. Having started the company a few years earlier as a small boutique systems integration firm, we came to the conclusion that we needed to change our business and hire very skilled, creative, and content development talent in order to win against the Madison Avenue ad agencies that were our biggest competitors at that time. Through the aggressive hiring of creative professionals, we were successful in growing the business from $4 million in 1995 to $8 million in 1996. We were also successful in gaining ad agency recognition by winning the first ever Gold Clio award for Web site design in 1996. For those of you who, like me at the time, are not familiar with this award, it's the ad industry's equivalent of a Grammy, and its traditional recipients were dominated by Madison Avenue firms. No other company in this region, not DC, Virginia, Maryland, won any Clio award that year in radio, TV, print or new media. It was quite an achievement for a small Northern Virginia-based firm.

Rather than rest on that success, we looked at how we could expand our service environments and capture assignments that had higher strategic value for our clients. We realized that the power of the Internet only started with communications and that there were so many more core business processes that could be reengineered and revolutionized. We changed our business model and began to hire people that could build complete Web-based business solutions for our clients. Instead of hiring more Web masters and creative designers, we began hiring business analysts and strategic consultants. We began hiring people from Andersen Consulting, McKinsey and Booz-Allen. Instead of hiring content coordinators, we increased our hiring of developers, MBAs, experienced project managers. We recognized and bet on the fact that Fortune 500 companies were going to use the Internet to fundamentally change the way they communicate, the way they collaborate and the way they conduct commerce with their trading partners, suppliers and customers.

The use of the Internet is accelerating business cycles and making obsolete some traditional business designs. It's like Darwinism on steroids—evolve or get eliminated. That concept applies to our clients and it also applies to our businesses. Twenty-two months ago, at a ceremony in San Francisco, I accepted this very neat-looking award named Clio. At the time, 80% of our 1996 revenue was creative in nature, 20% technical. Today, 80% of our revenue is technical and consulting, 20% is creative. A complete shift. That is a small example of how changing our business model has helped us maintain a growth rate of over 100% for the fourth year in a row.

Today, we are on track to do more than $30 million in revenues. Proxicom has over 200 employees with offices in Reston and New York City. By the end of this year, we will have opened two additional domestic locations and one in Europe. Along the way, we did the obligatory venture capital round, more for the value that they added in knowledge than for the cash. Fortunately, we were profitable from day one. Having invested everything I ever had in the business, I had a "fourth down and ten" mentality. We had to be profitable at every step. That's a good way of keeping you on your toes. Our investors today include General Atlantic Partners and GE Capital.

I want to talk to you about something else that is of interest to me and is of interest to many of you who work and live in this town. I have been blessed with the opportunity to have two different careers here. One is a Capitol Hill staffer and one is a founder of a fast-growing Internet company. You know a little bit about Proxicom, but I want to talk to you about the time I did on Capitol Hill and why I think a traditional Washington, DC career can be a great training ground, as you think about pursuing your entrepreneurial dream. I spent four years as a legislative assistant, covering, among other issues, appropriations committee work for then-Representative Jack Kemp.

Working on the Hill prepares you for the private sector by forcing you to become an instant expert on issues—understanding them and effectively communicating them to others, so that they can communicate those issues to the public in turn. It literally exposes you to a world of issues and cultures in a way formal education just can't do. It gives you experience in using the power of your ideas to convince others to follow you. It teaches you valuable negotiation and people skills. It teaches you the value of self-promotion.

And finally, it gives you extensive experience spending other people's money. That's a very helpful skill when raising venture capital.

I want to leave you with five lessons learned in my adventures as a netpreneur.

The first one is to listen. Listen to your employees, your investors and your competitors. Listen to the organizations which are set up to help people turn their ideas and dreams into reality. When I started this, I simply wanted a book. Today, you have a community and that community starts with the Netpreneur Program and all of the other groups. Reach out to those sources. They can be very valuable and they can save you a lot of time and grief.

Lesson two, no matter how much you research and craft your business plan, the reality of executing it will be completely different from what you thought.

Lesson three, always ask for money when you least need it, and understand the language of venture capital. It's a very, very different language.

Lesson four, if you have the passion and the drive to start your own business, and if you are not afraid of failure, then do it.

And lesson five, this revolution and all of the change that's happening in this space is really about people, not technology. It's about people using technology. It's not about technology fundamentally changing lives, it's about people changing their own lives through the use of technology. Sometimes we forget about that as we sit behind our computers and forget to interact and forget to see how difficult it is for some people to get connected. Someday computers will be as easy to use as appliances, but today I don't have to reboot my refrigerator. So until that day comes we've really got to keep our eye on the people issues. Thank you.


Rob McGovern: A Shiny New Schwinn

I thought I would give you a little history about my life as an entrepreneur, how I got into the "Jolt Cola and Twinkies" world of high-tech, the birth of CareerBuilder, and a few points of advice from the lessons I learned along the way.

I started my life as an entrepreneur in Feasterville, Pennsylvania, at the ripe old age of 12 years old. I was a mostly happy kid at 12 with one key exception. My friend Kevin Horn had a brand new Schwinn Varsity ten-speed bike which was cranberry red and built for cruising. When I asked my financially-challenged, divorced mom for a similar bike, she had a three-word answer: Get a job. Not realizing I was about to succumb to the siren song of materiality, I took my mom's advice and secured my first job as a media sales and marketing consultant which, by the way, is another term for paper boy. For the kids among us, this is how things were done before PointCast.

When you're 12 and need work, you don't exactly get your choice of assignments. In my case, the only paper route I could secure was the route covering a local apartment complex. In the world of news delivery, apartment routes are considered the worst. The tenants are transient, meaning they skip out on their bills and they are never around on collection day. Mom always said when you were dealt lemons, it's time to make lemonade. It was about this time that I learned some of the most valuable lessons of my business life.

On my first day of work, I met Mr. Jim. Mr. Jim was like a parent who worked part-time trying to make sure the routes were staffed and the money was collected. Jim taught me that the heart of every successful newspaper is a growing circulation base. To make his point, he pulled out a prize catalogue which was sort of like an S&H Green Stamps catalogue. You could buy prizes with the points you got for bringing in new customers. Somewhere towards the back of the book, I found my destiny. It was a green Schwinn Varsity with custom newspaper racks on it. It was a thing of beauty and I knew I had to have it.

My first few weeks as a circulation engineer went off without a hitch. I learned that if I collected on Sundays I could catch nearly every one home or at least in a guilty mood. Our controller is always trying to teach me the latest tricks in accrual accounting, but I learned early that every business is a cash business at its roots.

It was in the fourth week of my route that I learned today's secret of the free Netscape browser. You see, when they package a newspaper in a bundle, they always put a throwaway copy on the bottom and one on the top, so when they throw the bundle on the ground, they don't absorb the moisture from the earth. For the first four weeks, like everyone else, I threw these wasted papers away. Finally, I got the idea to use these giveaways to give to people when they moved into the apartment complex. When I saw a new family move in, I would deliver the paper to them for free for a week. At the end of that period, I would leave them a note at the door, telling them that I was the person giving them the free newspaper as a welcome to the neighborhood present and if they wanted to subscribe, simply mark "yes" on the form, and I would start delivering the paper the next day. My first-ever marketing program worked like a charm. I grew my route from 42 customers to 225 and reset virtually every record the Bucks County Courier-Times had for new customer attainment.

It wasn't long before I showed up old Kevin Horn with my new Schwinn from the catalogue, because mine came with the custom racks. Making lemonade now became a quest.

It wasn't until college that I got my start in high technology. I enrolled at the University of Maryland as a business student and, during freshmen orientation, my student advisor somehow talked me into a computer science course as an elective minor. This course was Fortran 101 taught by a foreign professor without full command of the English language. The first day of class was a spectacle. There must have been three students for every seat in the large lecture hall, with freshmen fighting for seats in the aisles and along the walls.

The teacher abruptly walked into the room and immediately started covering Fortran programming syntax on the chalk board. About halfway through the class a young woman yelled, "How long are we going to have to sit on the floor?"

The teacher slowly turned and said, "You no need worry about that. In three week, one-third of you be gone. In six weeks, one-third of you be left."

It was about that moment I decided that the most valuable skills are the ones that everyone else thinks are hard.

In my senior year, with COBOL, Fortran and Basic, I was able to secure a job with IBM as a co-op student. IBM had just won a rebid of the Selectric typewriter contract, but somewhere in the contract's fine print they had removed the free installation provision, which had been a hallmark of the IBM typewriter experience. Before long, chaos was breaking out in the Pentagon and major government installations, as all the secretaries were complaining that they missed the personal interaction with their handsome, blue-suited IBM salesmen. Before long, IBM was recruiting college students like me to work part-time installing typewriters in the U.S. Government.

About the time I started working at IBM, an amazing, life-changing event happened. It was truly an epiphany. The IBM PC was introduced. Our branch office machine was installed in our service room, where it sat collecting dust. As you may remember, in the beginning, there wasn't a lot of software for the machine, and IBM certainly wasn't in the habit of having third-party software around the branch office. Curiosity overtook me, which led me to learn that the only software we had were compilers. It wasn't long before I was doing my computer science homework on the machine. It sure beat waiting in line at the computer science building. I loved this little machine which, for the few months, was nearly my very own.

Soon, word got around the branch office that I was the only person who knew how to operate the PC. Predictably, the salespeople had me writing demonstration programs and toting the PC around to see generals and colonels in the Pentagon to show off IBM's newest innovation. I was allowed to take the machine home with me, which meant I may have been the first college student in America with my own PC.

After I graduated, I spent ten years at Hewlett-Packard Company and two years at Legent. Both were very gratifying and educational experiences. In the process of learning a whole lot about the software and hardware business, I also learned something about myself. I learned that there was a paper boy inside of me who was aching to reassert himself in the form of an entrepreneurial endeavor. I was 34 when Legent was acquired by Computer Associates, our largest competitor, and I figured it was now or never.

You may know that I founded the company under the name NetStart. There were lots of opinions about that name which I eventually changed to CareerBuilder. At the time we were working with a list of about 15 names, all of which sounded really cool, like Net Power Catapult, ImagiNet, et cetera. While I was working this list, I also secured my first $500,000 in investment capital which came as the result of making about 40 investor presentations. The problem was, I couldn't open a bank account without an incorporated company name. It put me in the obtuse position of having $500,000 in one hand and no ability to spend it. Our first 13 names were taken, so we knew that NetStart wasn't encumbered by any trademarks. We grabbed it, founded the company and got on to the business of delivering value to our stakeholders. Over time our CareerBuilder.com product gained national prominence with over 600 paying customers and millions and millions of job seekers who come to visit us. It led to the decision to rename the company CareerBuilder Corporation.

Incidentally, we also learned something else. We learned that having the prefix "Net" in your company name was simply an acronym for "No Earnings Trajectory."

Becoming an entrepreneur has been the second most gratifying experience of my life. The first was building my family, although close behind is the exhilaration and satisfaction which can only come from building a great team and winning in the market. Along the way I've learned a few key lessons which might be of interest to you. There are four of them.

First, in my brief career in the newspaper business, I learned that business is about fundamentals. We all want to read the red herrings in fancy business books about spin selling and business process re-engineering. The fact is, 99% of this game is Business 101. You have to deliver products that have benefits which outweigh their costs. From an operational standpoint, all businesses are cash businesses, meaning you simply have to collect more than you spend.

As Netscape and the 12-year-old paper boy from Feasterville have proven, the word "free" is still the most powerful word in the English language.

In my career as a student I learned that money flows to jobs and skills which are hard to do. We have a saying around CareerBuilder, "If it was easy, it would pay minimum wage." Writing great software and delivering value by an electronic medium is hard. That's why society is so willing to pay us these ridiculous salaries to make it happen. I often see business plans which describe a get-rich business model, which typically involves creating a Web site, then sitting back and waiting for the checks. My advice to you is, if that's your plan, it might as well pay minimum wage.

At CareerBuilder I have learned about the fine art of figuring out what you can afford not to do. Every day I receive input from my 100+ employees, my board of directors, my investors and my customers. They almost always sound something like, "We must do X, we must do Y, or we must do Z." Truth is, I can't afford to do 10% of these things. A start-up is the ultimate manifestation of the 80/20 rule. You're always trying to figure out the 20% of activities which will yield 80% of the results. I have developed a habit of looking at each of these inputs and making a quick value judgment about whether I can afford not to do X, Y, or Z. Most often, I come to the conclusion that, if I don't do X, I think we'll be okay.

Lastly, at the age of 37, I have started the process of gaining perspective. When I was a salesman at Hewlett-Packard, I once had a sales manager tell me that we are never as good or as bad as we think we are. At the time I was too young to understand what this meant. Now I think I'm starting to get it. In my opinion, the people in this room are the luckiest people in the world for a very brief moment in history. We have the good fortune of being good at organizing 1s and 0s into logical patterns at a time when society values that skill.

Remember that 100 years ago, society valued people who could grow good crops, and 50 years ago, people who knew how to build complex machines. There is no doubt that history will render us obsolete in our due time. In fact, I'm fully prepared for when my 4-year-old son Grant will some day think of my profession in the same way we collectively think about people who work in old industries like automobiles or steelmaking. The key is to make the most of a great thing now, while keeping perspective about the truly important things in life.

Life is simple. It's about learning and making lemonade, and seizing the opportunity we are lucky enough to have put before us. Thank you.


Part 3 and 4: Audience Questions & Answers and Wrap Up

Networking With the Netpreneurs



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