Dot-com: The new wave

Lessons from the '90s bust inform young entrepreneurs

To most 22-year-olds, the receipt for a breakfast biscuit is just an annoying piece of paper.

But Taylor Mingos hopes to turn those little scraps of paper into a business.

Mingos has introduced shoeboxed.com, a Web site that helps users archive receipts and filter out spam e-mail messages from companies they once patronized.

"I want to eliminate paper receipts entirely," he said. "I saw my mom collect literally shoe boxes full of receipts. They're very archaic in a society where everything has gone digital."

Shoeboxed.com, introduced two months ago, may be based on a simple idea, but Mingos knows simple ideas have gone on to dot-com immortality.

Inspired by the recent success of sites such as YouTube, Facebook and MySpace, Mingos and other young entrepreneurs are going into cyberspace with new ambition and ideas.

They want to follow in the footsteps of the dot-com millionaires of the 1990s, who are watching the new generation with great interest.

Realistically, it's a statistical certainty that all can't succeed.

So, while they scramble to create the next YouTube, these young entrepreneurs are treading carefully to avoid their predecessors' pitfalls, building their futures but determined not to repeat the mistakes that led to the dot-com bust.

Mingos was inspired by his experience two summers ago working to help introduce StudiVZ.net, Germany's equivalent of social networking site Facebook. Mingos now leads his own staff of 25.

"We were students, for the most part, working on that site, and we won," he said during an interview in the shoeboxed.com office at Durham's Brightleaf Square. "When I started Shoeboxed, it was surprisingly easy to find people who wanted to do something big."

That's the draw for young entrepreneurs and possibly the reason for the latest wave of dot-com startups, said Ted Baker, an assistant professor in the Department of Management, Innovation and Entrepreneurship at N.C. State University.

"After the bubble [in the 1990s], people were like, 'The fad about entrepreneurship is over' " he said. "Among college-age students and graduate students, it's stronger than it's ever been, and I think it's driven by this desire to have an impact."

Getting the money

One thing that has changed is the funding opportunities for dot-com wannabes.

During the heydays in the 1990s, investors wanted a piece of the next big thing. Venture capital was seemingly easy and endless. This time, the road is a bit rockier. Investors have long memories of money lost, the economy is shaky, and there's more competition.

Venture capital funding in dot-com startups surged a few years ago when people began buzzing about the more interactive Internet, dubbed Web 2.0, said Chris Gill, president of the Silicon Valley Association of Startup Entrepreneurs.

After that, funding trailed off, he said. That doesn't mean there's not money out there -- it's just tougher to get.

Ninety-eight percent of new ventures fail, Gill said. Most venture capital groups that he works with will see 2,000 to 3,000 proposals a year, meet with about 10 percent of the entrepreneurs and fund half a dozen, Gill said.

That doesn't mean the latest dot-com wave is all gloom and doom compared with the first.

Shoeboxed.com's offices, for instance, have all the funky flavor of their predecessors. Mingos' taste runs to Ikea furniture, Play-Doh and Tinker Toys.

The company hopes to make its site compatible with financial software such as Quicken, which might catch the attention of Intuit, which makes the software.

Managing the risks