After the dot-com crash, a web-site developer needed vision, persistence and the right market niche to survive.
| Entrepreneur |
Jim Limberis, Managing Director |
| Company |
Netseek |
| Business type |
Online community web site developers |
| Founded |
1999 |
| Employees |
3; contracts IT consultants as required |
| Head office |
Sydney, New South Wales |
| Contact details |
1800 180 183 |
Key Learning Points |
|
Persistence
If you really believe in your business vision, do not listen to people who say it will fail. Persevere.
Product design
Keep products simple. Too many features may confuse or frighten customers. Do not create a helpdesk nightmare.
Government grants
Tap into government support early. Find someone who understands the process.
|
The Netseek Story
In 1999, when Jim Limberis started Netseek, the excitement surrounding the internet was intense. Everyone was talking about globalisation. But Limberis, who had worked for a software development firm in Sydney before setting up Netseek, resisted those who urged him to focus on global markets.
He had a different vision. “I wanted to use the internet to provide local information to local businesses in a way that made sense to them. That’s why I developed Netseek: to build localised online communities focused on adding value and forging business relationships.”
Netseek’s key clients are mainly local chambers of commerce, although charities could prove to be a new and important market niche. Netseek can develop an online community web site for a chamber of commerce in less than a day. The entry cost to join an online community for a chamber of commerce is $220 per year. Netseek’s main costs are web hosting and support expenses.
Liverpool Chamber of Commerce in south-western Sydney is a Netseek client. Businesses that belong to the chamber pay an annual fee to join the chamber’s online community. In return, they receive a microsite to showcase their products or services. Netseek receives a small percentage of the payments to the chamber.
Netseek’s software allows businesses to track activity on a chamber’s web site: what is being searched, how many times pages are viewed, and how many referrals are made. Limberis says: “Chambers of commerce can say, ‘We generated 600 leads last year, which equated to $90,000 in revenues within our group. We attracted X number of visitors to the site and Mr Joe Butcher, your web site was viewed the most’. Community groups can demonstrate why they exist, which has been a real challenge for a lot of them.”
Netseek has learnt to keep its software design simple. Limberis says: “Many of the small businesses that we deal with are not that computer or internet-savvy. They don’t want to see too many bells and whistles. If they do, they will just get scared. The last thing we want is to create a support nightmare for our customers and ourselves.”
Limberis’ vision for Netseek was tested during the IT industry shake-out after the dot-com bubble burst in 2000. By 2001, many IT decision makers had stopped spending money. Everything went on hold. Netseek continued to develop its online community software but faced hard decisions about its research and development spending.
Limberis says: “The pain was almost unbearable for a while. You have your family to support, you have your wife saying, ‘Jim, we’ve got to make some money; you’re still spending money building your core products. Are you sure they’re going to work? Are you sure there is a market for this?’ I was almost willing to put my life on the line. I knew that I had something the market needed. The lesson for me was that you must persist if you believe in what you’re doing.”
Having another income stream helped. Limberis sustained Netseek by working on software development projects. He continued to finance Netseek’s R&D by using his own money and cashflow rather than bank debt. He says: “I have a great small business mentality. I can take a small business and run it very well on an oily rag. You can’t burn money without making money.”
Netseek was also helped to ride out the IT downturn by its admission in 2000 to the Australian Technology Park's business accelerator scheme, ATP-Innovations (ATPI), located in inner Sydney. ATPI is owned by four Australian universities and supports emerging technology companies by providing office space, services, business advice and access to shared business networks.
Limberis says: “ATPI was a critical component of minimising our risk exposure. We didn’t need to worry about office support services, we had access to advice, and we could present clients with a professional work environment.”
Limberis regrets not researching possible government grants. He advises others to tap into government support as early as possible. A government grant can double the finance available for a company’s R&D effort. But securing a government grant is easier if you can find someone who understands the complex process.