Dot.com to Dot.bomb

This is a period of time when the Internet growing rapidly in the late 90s. Internet companies growing with an incredible speed. Which has lead market to the situations that internet companies are being overvalued and gained an abnormal attraction from the investors. During this period, many tech companies become giant in the market such as GovWorks.com, Yahoo!, Broadcast.com, AOL, Info 

Space, etc. Some of them has found a way to adapt with the market such as Yahoo!, but most of them have collapsed because they were failing to predict what is coming.

To illustrate this event, Andrew has used dinosaurs to explain how those companies experience the five stages of the dot.bomb, from ‘innocent beginning, boom, insanity, bust and finally ‘crawl back to sanity’. The dinosaurs were giant species and were dominated the world for a long time. They were strong and were a big part of the world, but they were not able to see what is coming to them. Finally, just like those giant companies during the dot.bomb, most of them were finished. Only a few species have adapted the changes and survive until today, such as crocodile, this reflects exactly Yahoo! and AOL during that period.

Another story about the dot bubble that Professor Andrew has shared in class is the story of AOL and Time Warner. During that time AOL was decided to merge with Time Warner, which was a huge acquisition in business history. However the merging did not give a great result and finally the AOL Time Warner decided to be separate from AOL and the company has changed its name back to ‘Time Warner’.

Guest Speaker - John Dimmer

Last Thursday we got John Dimmer has as our guest speaker. Mr. Dimmer has a B.S. in Finance from University of Oregon and after getting a degree, he started working at Puget Sound Bank. He shared that he took a job to after graduation to get experience and looking for opportunities. Then, he built the company named Free Range with Andrew Fry in 1994 and they had a happy exit in 1999 by selling it to Luminant Worldwide. When the new owner bought the company, they require Mr. Dimmer to have an employee agreement with them because they want to keep the company’s stability. However, after the short time, he was ‘sack in call’ due to the reason “we don’t use your talent appropriate”.

He became an angel investor in the technology area and build an air-streamed and Honda dealership. He talked about a lot of interesting experiences about this. One of an example, his using ‘golden cuff’ to keep talented people. Mr. Dimmer has a great employee named Ted and he was successful in using ‘golden cuff’ to keep and move him to air-stream business. Then he hired another great guy and he has another problem which is figuring out how to keep him. In another example, Mr. Dimmer shared that the leader must choose between gaining market share and being profitable. Gaining the market share is a great thing, but then due to the revenue is smaller to the expense, the company will have to face with the problem of being acquired by a larger company and the large company will enjoy that large market share. Therefore, firstly we must be profitable, which means keeping revenue larger than expense, so we could be in control and do a lot of things we want.

About funding, there are different types of funding. The first one is debt, which include commercial source, banks, SBA, relatives and investors. The second is equity, which is funding raised through selling an ownership interest in your business, which include hybrid, debt or preferred securities convertible into equity. Some other methods include price money from business plan competitors, government grants, etc. All of them are really helpful for us in order to look for a funding for our business.    

Guest Speaker - Amy Sallin

Last Thursday we had Amy Sallin, from Buerk Center for Entrepreneurship of Foster Business School in UW Seattle, as our guest speaker. She has introduce to our class the Entrepreneurship's Business Plan Competition that is held in UW Seattle every year.
About the Business Plan Competition, this is a $70,000 prizes competition for students from colleges in Washington States to have some experience in starting their businesses. First, there are resources to connect students with other students from different majors and the ability to form a strong team that people with different skills could work together. Students can start seriously from their ideas into a further step with valuable feedback from experienced entrepreneur such as judges or potential investors. Moreover, students also will learn a lot from other students. One of the most important benefit students in this competition is building networks of contacts. Lastly, they will also receive many coaching and mentoring on their skills to maintain their businesses well in the future. In general, this will be a great opportunity for all students from many colleges to learn and improve skills on business start-up, and the team that is good and lucky enough to win the completion will have some money to implement their ideas. For us, this is a chance to make a further step from our business plans that we will need to submit at the end of the quarter, which will help us to transform our plans into a real business. Obviously it is very difficult to win the completion, but even if we cannot go far in this competition, we still will gain a lot of things from this contest such as personal experiences or connections.