Who were the entrepreneurs of the gold rush? The pick and shovel makers. Olga Wojtas takes a lesson in money-making
Jonathan Levie is in Glasgow. Julian Lange is in Wellesley, Massachusetts. Together, they lead an entrepreneurship seminar for about 25 students at Strathclyde University.
The rather swish teaching room in Strathclyde's Hunter Centre of Entrepreneurship is dominated by two large screens, one showing Lange, one showing Levie, who is standing only a metre away from it. "New technology is opening massive opportunities, but the real question is how do you make money out it?" Levie asks. The students lean forward expectantly. Most are engineering or science PhD students; all are contemplating an entrepreneurial career. A few of the students are earning credit towards a DEng degree, but the vast majority are taking the evening class in postgraduate technology entrepreneurship out of personal interest.
They are learning the difference between a business idea and a business opportunity. Tonight they are tackling a case study prepared by Lange, an entrepreneurial studies professor at Babson College, and founder of Visicalc, the company that invented the spreadsheet. It focuses on Ben Narasin's development plans for his pioneering internet fashion mall, the first website dedicated to fashion.
Levie carries the phone from desk to desk as the two academics draw the students into discussion of Ben's strategy. "Is there an opportunity here for Ben?" Levie asks. "Would you invest in his business?" One male student says he would not, because he would never buy clothes on the internet. "I need to see if it fits me, if the colour's right." But a female student tells him that lots of men buy clothes on the internet "because they really hate going into clothes shops". A heated debate ensues: some think Ben is on to a winner because he is trying to make clothes shopping easier and more fun. Others think shopping is a social event, or warn that many people have internet access only at work, or that they would be reluctant to send their credit card details into cyberspace.
"A variety of people descended on California in the 1840s gold rush. Who do you think made money? That might help us understand a little more who might make money on the internet," Lange says. The pick and shovel makers and hoteliers, the students decide, which translates these days into internet service providers, hardware providers and web designers. Technology may or may not change, says one student, but business basics stay the same. The important things are cost control, marketing and a "profitability concept". Lange reveals that Ben Narasin has experimented with different business models. He has shifted his web enterprise, for example, from being an "internet portal" for fashion, with live transmission of fashion shows, to a discount fashion mall. He recently bought some of the assets of the defunct boo.com for a rock-bottom price.
"What are the main lessons I want you to take from this?" Levie asks. "Entrepreneurs are fast, focused and flexible. You've got to anticipate who your next market sector is going to be."
Lange eventually has to sever his connection because the Babson teaching room is needed by someone else. But, although the evening seminar has overrun its two hours, the students show no sign of flagging - they bombard Levie with questions. As well as answering them himself, he offers Lange's email address. Science postgraduate Claire Blue is delighted. "He's a leading businessman in America, so we're getting it straight from the horse's mouth."
Drama graduate Fiona Lambert-Fraser has been scribbling copious notes throughout the seminar. She is drawing up a business plan for an internet site selling artwork and textiles. "I was really intrigued by today's lecture. He was saying a lot of things Jonathan's been saying, and it was really relevant to what I'm planning," she says. "You gain so many things from this course."
Chemistry postgraduate Douglas Taylor is equally enthusiastic. "As a chemist, you're not taught how to commercialise your research. This doesn't contribute anything to my PhD as such, and I'm here purely out of interest. The video conferencing was good - I've never actually been involved in anything like that before."