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CAMBRIDGE, Massachusetts -- The subtitle for Harvard Business School's sixth annual Cyberposium ought to have been "Raising Capital for an Internet Startup is So Easy Even Your Grandma Could Do It."
"Right now, raising money is free -- it's duck soup," crowed Mike Maples, co-founder of Motive Communications, an Austin, Texas, software company that has raised almost US$5 million in venture capital. "If you can't get your idea funded, you've either got a bad idea or a bad team."
Added Ken Morse, director of the Entrepreneurship Center at Massachusetts Institute of Technology: "There is tons of money out there," but "a shortage of excellent entrepreneurs who can make startup ventures successful."
Encouraging words.
The Cyberposium, started by Harvard Business School students as a way to survey the Internet industry in hopes of landing plum jobs, this year turned into something of a start-up pep rally.
The event, which drew students not only from Harvard but from 35 other business schools, opened with a keynote from Garage.com CEO Guy Kawasaki. The former Macintosh evangelist exhorted the audience to "jump to the next curve, or create the next curve. [As revolutionaries, you] can't duke it out on the curve you're on."
But Morse tempered Kawasaki's enthusiasm, advising the Friday night audience to avoid starting a company -- or working for an early stage firm -- straight out of school.
"Go to a well-managed, high-growth firm," he said, arguing that freshly-minted MBAs would have more opportunities for learning in a more structured environment. "Starting a company right after graduation is what I call premature incorporation," Morse quipped.
That advice didn't prevent hordes of soon-to-be-MBAs from swarming the venture capitalists and successful entrepreneurs who came to address the conference -- people like Christine Comaford, managing partner of San Francisco-based Artemis Ventures, and Warren Adams, who last year sold PlanetAll to Amazon.com, transforming eight of his company's 30 employees into paper millionaires.
Other sessions at the conference addressed larger industry dynamics. In a panel on "Attackers vs. Defenders," John Risher, senior vice president of product development at Amazon.com, argued that not only was it important to be a first mover, but a continuous innovator.
"When we introduced one of our cross-selling features to the site -- 'customers who bought this book also bought these other books' -- it took Barnes & Noble eight months to copy it," Risher bragged, adding that the cross-selling contributes significantly to Amazon's overall sales. "Meanwhile, we kept running."
The panel seemed to agree that rather than reacting to competitors, the key to online success was understanding one's customers. For America Online, that means ignoring the "Internet elite" and focusing on the middle-of-the-road, according to Chris Hill, a senior executive with AOL Europe. Responding to a sales pitch delivered by a representative of @Home on the merits of broadband, Hill said, "Most of our customers today wouldn't know what to do with huge speeds -- the services and the content just aren't there yet."
Quantitatively-oriented business school students in the audience wanted to know about profitability -- and how long companies like Amazon could continue to incur losses.
"Market share will never again be as inexpensive as it is today," said Risher. "And customers will never be easier to acquire. We're investing in those."
Warren Adams, the chief executive of PlanetAll, was asked what was required to retain his best employees when Amazon bought the company and transplanted it from Cambridge to Seattle.
"Two words," Adams replied. "Stock. Options."
He said that most of PlanetAll's employees options weren't scheduled to vest for another two years after the August 1998 purchase, and that Amazon.com layered new options atop those, with a longer vesting schedule.
PlanetAll's migration from East Coast to West sparked a series of questions about whether the Boston area was losing momentum. Carl Wolf, Sun Microsystems' vice president of business development and a Harvard Business School alum himself, said it was.
"If you want to start a shoe firm, you go to Milan. If you want to make movies, you go to Hollywood," he said. "The balance of power in the 80s went back and forth from Route 128 [in Massachusetts] to Silicon Valley. But now it has shifted to Silicon Valley."
The final panel, held Saturday afternoon, was an advice-fest on securing venture capital -- or a job with a VC firm.
"We really like to see someone who is absolutely committed, and doesn't have other jobs waiting in the wings," said Steve Harrick of Highland Capital Partners. "We're very sensitive to that. We don't like people who say, 'If we get funded, we'll do this, if not, we won't.'"
"Do due diligence on your investors," venture capitalist Comaford recommended. "Go to one of their failed portfolio companies, and see what happened, where things went wrong."
A core team of about 30 Harvard Business School students from the High Tech & New Media Club worked to organize the conference for nearly a year, putting in "over 10,000 man hours," said Matt Eichner, Cyberposium's marketing director.
"It was really jam-packed," said Krystian Cieplucha, a first-year student from the Richard Ivey School of Business in Ontario, Canada, assessing the event. "We don't have a big Internet curriculum at our school, and this was a pretty comprehensive overview."
Students like Cieplucha, who have not yet raised their first $10 million in funding, were reassured by several speakers that they weren't too late.
"People think the Internet is big today," said Eric Brandon, vice president of strategy development for AOL Studios. "This is 1965. People thought rock and roll was big in 1965. Elvis had had a few hits, and the Beatles had been around for a while. But we ain't seen nothing yet."
