Speak to Shikhar Ghosh and Lee Rosenbluth, and they’ll tell you there is nothing mystical about launching a successful dot com—you just have to make all the right moves. Simple? Not on your life.
So far, Ghosh and Rosenbluth’s companies are cooking. If they don’t make any glaring faux pas, their firms may actually turn profitable. Ghosh, 43, and Rosenbluth, 45, have backgrounds that are as different as the industries they serve. But they also have a lot in common, primarily a fanatical attention to detail.
Find the right opportunity
Ghosh is president and CEO of iBelong, Inc., a Boston company he cofounded with Howard Kessler in 1998 that creates portals for companies. Rosenbluth is chairman of Cruise411.com, an e-company started last year that exclusively books cruise reservations.
Prior to iBelong, Ghosh founded Open Market, Inc., an e-commerce and information-publishing software company. Rosenbluth, on the other hand, grew up in his family’s travel business, which was started by his grandfather in Philadelphia in 1892 and specialized in bringing immigrants from Europe to the United States. He learned the travel business from the ground up and had the good sense to utilize technology before many of his competitors did. In the early 1980s, for example, Rosenbluth developed the first electronic leisure application in the travel industry on Prodigy.
But when the Internet emerged, Rosenbluth’s imagination really fired up. “When I heard about the Internet, I wanted to migrate my services to it,” he said. “The Internet offered a unique way to reach consumers.”
What’s more, he wanted to create a site that specialized only in cruises. His main competitors—Travelocity and Expedia—were selling $1 billion in airline tickets apiece each year, along with cruises. Yet no one was exclusively dominating the cruise market until Rosenbluth jumped on it with a vengeance.
Rosenbluth says business is good. He has racked up $22 million in sales, but he’s still not profitable. If he doesn’t lose his stride, he projects to be profitable by 2002.
Like Rosenbluth, Ghosh understood his industry. Even when the venture capital community started thinking twice about backing new ventures, Ghosh succeeded in capturing $12 million in his first round of financing and an additional $22.5 million during the second. He was able to pull it off because he presented the VC crowd with a well-conceived business plan. His investors also knew that past history is the greatest predictor of success.
“We had realistic goals and ideas,” Ghosh said. “Unlike many dot coms, I never intended to build a business to be sold.”
He also went out of his way to build an experienced management team, with all members having between 10 and 20 years of experience under their belts. In the dot-com world, that’s the equivalent of senility.
Coincidentally, about 10 percent of his 100-person staff served in the military. His managers include two Desert Storm veterans, a former Navy commander and submariner, a West Point graduate, and a former infantry paratrooper.
Hiring former military men turned out to be one of Ghosh’s smartest moves. “They’re disciplined, hardworking team players, and they’re trained to be problem-solvers, which makes them ideal for a dot com,” he said.
Apply old-school rules to your new-economy business
Rosenbluth took pains to watch his pennies, unlike free-spending dot coms that made speedy descents into oblivion. Instead of retaining expensive advertising agencies, he saved a bundle by creating all of his advertising campaigns in-house.
Still, that’s only part of Rosenbluth’s success equation. From the onset, he was passionate about his company and driven to succeed.
“Not everyone is cut out to run a dot com,” he said. “You need to constantly think ahead, be a motivator, and have well-honed business skills, a steel stomach, and the stamina of an ox.”
Ghosh adds to that list the ability to handle risk and ambiguity, traits that often trigger ulcers in ill-prepared managers.
Finally, timing is critical for success in the dot-com world. “Being first on the block can be good and bad,” Rosenbluth adds. “Many people got out of the gate too early. The trick is analyzing whether it’s the right time.”
If you’re thinking of starting a dot com, take Ghosh and Rosenbluth’s advice and think carefully about whether you’ve got the right stuff. It’s no crime if you don’t.
With many dot coms closing their doors, we’re wondering what the ones that are left are doing differently? If you work at a dot com and you’re still standing, tell us why. You can also start a discussion or post a comment below.