Beyond The Net
Humble start vital to dot-com's success
By Janine Warner
Too much funding can kill a company.
Just consider Latpro.com, an online job site that specializes in helping bilingual professionals. What has always impressed me is that founder Eric Shannon says he's still in business today, in part, because he didn't get millions in venture capital when he started five years ago.
''Getting lots of early funding would have been a disaster,'' says Shannon. ``We would have tried to be the Monster.com of Latin America, and I don't think the market was ready. I could have lost the company.''
Instead, Shannon built the business slowly, keeping overhead low and filling a niche no one else was serving.
Latpro's story serves as an example of how to make a new company work on the Web and a reminder that it's not too late to create a new online venture -- if you have a solid business model, can fill a niche, and have a product or service for which people are willing to pay.
Latpro.com specializes in jobs that require fluency in Spanish, English or Portuguese. It's a niche he learned first-hand didn't exist after he had trouble finding a job himself in 1996.
The language requirements distinguish the site, which now attracts more than 200,000 unique visitors each month, but Shannon says customer service is what wins them awards and keeps people coming back.
''We try to respond to every e-mail,'' he said, and staff screen every job listing to ensure it's a legitimate position.
After a little experimenting, Shannon realized he could collect revenue from both recruiters and job seekers and create a sustainable business model. The site provides limited services for free to attract new users, and premium levels of access for those who want to post longer résumés or access more job descriptions in more languages.
It may seem like Shannon has just followed good business practices, but you don't have to look far to find a long list of failed dot-coms that overestimated their potential value, tried to grow too fast, and wasted millions on overhead and advertising.
Just look at the many articles that have been written about Webvan Group, which blew through $830 million in start-up and IPO investments in just two years as it tried to reinvent the grocery store business with a fleet of home-delivery trucks and warehouses. Or consider companies such as Wineshopper.com and Winebuyer.com, which underestimated the challenges of shipping alcohol across state lines and also ended in financial disaster. The list of casualties in the dot-com industry serves as a warning and illustrates the challenges of starting a new online venture.
But Latpro is one of a growing number of small online businesses that have done enough things right to make payroll every week and even show a profit.
Shannon admits he did get some initial funding, from his wife, who gave him $500 a month for the first year. After he had built up an audience and job listings, his wife's investment paid off: Latpro started charging for services. Shannon's wife left her job to join him in the new business.
Today, Latpro.com serves 171,000 registered job candidates and has 9,500 registered companies, including 84 of the Fortune 100. The majority of jobs are in the United States and Latin America, with the most common placements in Florida, California, Texas and Mexico. But you'll also find positions that are as far away as London, Angola and Mozambique.
''The most important thing is we've always provided something of real value,'' Shannon said. ``Most Internet companies failed because they were nifty ideas, but not something people would pay for.''
What can you learn from studying both the failures and successes of the Web? Begin with realistic expectations, brace yourself for a lot of hard work, and keep your overhead low.
This week, Shannon and his small staff are excited about moving into new offices in South Florida, but they're sticking with their simple office furnishings, complete with homemade desks made of doors and file cabinets.
''It makes it easier to move,'' Shannon joked. ''They fit right into the back of our car. We've always been careful with expenses,'' he added. ``My wife's the accountant, and she's really tough.''
First publication, The Miami Herald, Mon, Feb. 25, 2002