Idea alone can still take on the world

May 8 2008 by Andrew Mernin, The Journal

Andrew Mernin meets the next generation of North East online entrepreneurs and asks a man who remembers the original dotcom boom about the challenges they are likely to face.

WITH summer approaching, most teenagers will no doubt be looking forward to finishing their exams before spending the holidays knee-deep in mud at a festival, backpacking around Europe or fruit-picking to fund their social lives.

However, 17-year-old Jonathan Grubin has other things on his mind.

The A-level student, who attends Newcastle’s Royal Grammar School, is the boss of his own online empire.

Between homework, school lessons and all the other things that go with being a teenager, Jonathan has set up no fewer than 11 websites.

His business, which he started when he was 12 with the launch of a website offering free screensaver downloads, turned over £75,000 last year and this year he launched ForFree4U.co.uk – a site offering visitors free music players and cameras for signing their friends up to its advertisers.

“At the moment, I’m doing my A-levels, so it’s quite stressful. If I get a lot of school work one night, I leave the website until the next night,” he says.

But the budding Bill Gates is not the only young North Easterner creating his own internet kingdom as the region continues to thrive in a second dotcom boom.

The rapid development of the internet’s interactive capabilities – termed loosely as Web 2.0 – has created the next generation of online entrepreneurs in our region.

Meanwhile, multi-million-pound sales of sites with humble beginnings such as Bebo – the social networking site sold this year for £417m – are also inspiring would-be entrepreneurs to go online in search of a quick buck, as Jonathan explains.

“If it got to the stage where my business sold for millions, then great, but I guess it all depends on how the internet goes and how the economy is going. With the internet, things can take off really quickly, but at the same time can slow down really quickly.

“With the growth of Facebook and Bebo, people see opportunities to make money. If someone sees Facebook valued at millions, then people will start researching this and see if it’s something they can do.

“You have nothing to lose because the only real start-up cost is to buy a domain name, which could cost less than £30.”

And Jonathan is certainly not alone in the region’s online revolution. Twenty-year-old Matt Scott launched his internet business after a gift he made for his girlfriend was well received by friends. He stuck photos on a pair of trainers using transfer glue. The Newcastle University student received so many requests from friends asking for similar pairs of shoes that he decided to go into business by allowing customers to design their own pairs online.

“I’ve been in business for a year and the site has already had around 3,000 hits and I’ve sold 60 pairs.”

Matt is currently seeking £150,000 of investment to develop a production line for the business in the North East and is about to take a year out of his studies to push the company.

Meanwhile, an initiative managed by the North East Regional Portal has just awarded 36 aspiring online entrepreneurs £2,000 each to start their own business at home.

Portal chief executive Norma Foster said: “They will use their cash prize to purchase equipment which will help them start up an online business from home. This can include personal computer kit, digital camera equipment, furniture and office equipment to transform an area of their home into a suitable work area, as well as marketing materials including a website.”

The 36 business ideas include a digital-only record label, an online shop selling goods made in a day care centre and a company offering advice and recipes on barbecues.

Other recently baptised web entrepreneurs in the region include a 19-year-old who has launched an information site aimed at students and a Sunderland University student who has a site which allows unsigned music bands to sell their music to fans.

So, as the next generation of North East web entrepreneurs prepares to take on the world, what challenges can they expect? One man who is certainly not wet behind the ears about online business opportunities is Northumbrian Nick Bell, who witnessed the burst of the original dotcom bubble at close hand.

The 24-year-old made almost £1m in the late nineties through the sale of various websites, including social site teenfront.com – which he sold when he was just 16. He later bought back the site and turned it from loss to profit. His other online enterprises included studentmax.com, snapaJob.com, teen-chat.co.uk and brit-teen.co.uk and today he fronts QuickTV, a company developing applications for the broadcast industry.

Mr Bell believes more young people are being drawn to online business opportunities because of the success of social networking sites such as Facebook, which started life in a student’s bedroom. However, he warns the next generation of web entrepreneurs that landing a six-figure bid for a website isn’t easy.

He says: “There is the huge romance surrounding the web that anyone can do something if they have a good idea. In the late nineties you could create a site and have five people visit it but still put a huge price tag on it [which you can’t do today].

“The dream ticket of creating the next Facebook or Bebo still inspires people and you can certainly grow an online business quickly and reach a global audience overnight, which you can’t do in the offline world.”

The serial entrepreneur also believes there are pros and cons to being online and in business today compared with the heady days of the late nineties.

“A lot of the challenges that we faced first time round have been overcome because payment online is now standard practice. Back in the nineties, one of the biggest challenges was that people were reluctant to pay for things online. We had to convince offline partners and bricks-and-mortar companies that the web was part of the new world and I think those issues have gone now.

“However, it’s more difficult to make an impact today. In the nineties we managed to get over half a million users to our site every month.”

PAGE TWO: More on the North East Regional Portal's scheme which launched the careers of 36 would-be entrepreneurs.