the old tune goes: If it doesn’t fit, don’t force it. Find a more accessible model.
Consider Ralph Clark, a serial entrepreneur and current venture partner with Ascend Venture Group in New York. Three years ago, he received $3 million to $5 million from Angell Investment to develop Bigbow.com. Clark originally developed it is as an online gift and concierge service using e-mail technology. But he discovered this business-to-commerce paradigm was flawed. For one, Bigbow.com’s target market was over-developed. Secondly, according to Clark, “the economics needed — to go out and get more customers — was costly and not viable.” As a result, e-commerce sales tanked.
Says Clark: “I found that we had to re-orient our assets.” He renamed the entity, blue makoi, and made the shift from a business-to-commerce site to “an e-mail marketing services company,” helping other companies promote their wares on the Internet. The end result: In October 2001, blue makoi was successfully sold for an undisclosed amount to UpShot Inc., an online subscription service.
All this means that entrepreneurs will have to demonstrate their competitive advantage to dig up capital these days. To strike your rich vein, it will require the acquisition of the right tools.