Kiplinger's Personal Finance Magazine - September 1996
Making Money on the Web

To succeed, you need old-fashioned entrepreneurship, a solid business plan and a thoroughly modern pioneer spirit.In a modern-day equivalent of the Oklahoma land rush, trailblazing entrepreneurs are racing to stake their claims on the World Wide Web. While the masses of Internet explorers are sticking to well-worn paths, these "netpreneurs" are troding virgin soil. And there is money to be made from their virtual ventures.

Despite their high-tech façades, most Web ventures are no different from other small businesses. Their pioneering developer swear by the mantra of entrepreneurs everywhere: Create a careful business plan, find a loyal financial backer, and make like a miser until you get your business off the ground.

That's what each of the entrepreneurial teams in this story did, and while they harness the power of the Web in different ways, all of them are finding success in cyber space.

She never expected to be an online pioneer. In fact, Nancy LaPook Diamond of Boca Raton, Fla., was intimidated by computers until recently. But she wanted a job that allowed her to be free when her children got out of school in the afternoon. A mutual friend introduced her to Kim Bregman, a computer-savvy mother who had an idea for a business: a camp directory for the Internet.

Today, Diamond handles sales and marketing for the business and designs displays for the camps that buy space on the Kids' Camps Web site (http://www.kidscamps.com). Still no computer jock, she relays designs to a graphic artist proficient in the programming language of the Web. Bregman, with an MBA and ten years' experience at IBM, keeps the books and helps land new accounts.

Only a year and a half after Kids' Camps was launched, Bregman and Diamond's niche electronic- publishing business, Harbinger Inc., is turning a profit. Some 300 camps and camping-equipment suppliers are paying $500 a year to have a page featured in the Kids' Camps directory. More than 500 pages of advertising are posted on the system, and more go up every week. From these revenues, the partners issue themselves monthly paychecks and have paid extensive start-up costs: legal fees, copyright costs, and rent for space in a Boca Raton office that is equipped with a telephone, fax machine and PC network.

Still, the whole effort might have been unaffordable had Bregman and diamond not gotten a big break on the cost of a computer system powerful enough to support a Web-based business. Such a system would have cost between $50,000 and $100,000 for the hardware - primarily the server, which houses the Web site's data and memory - and dedicated phone lines capable of handling scores of simultaneous requests for information. But armed with a well developed business plan, Bregman approached Carl Marbach, an entrepreneur in Boca Raton who had already invested in a system for publishing his own online travel and aviation magazines. Marbach, impressed by the plan, let the embryonic enterprise hitch a ride on his set up in return for a partnership share. "Kim and Nancy have contributed their expertise in understanding the market," Marbach says. "We've worked on the technology and publishing side. It's a very good partnership."

Online start-ups can also rent or lease time on equipment owned by other companies, which advertise in Internet trade magazines or newspapers. They pay either a flat monthly rate or a fee based on the number of visitors doing business at the site.

Bregman and Diamond's enterprise capitalizes on one of the Internet's greatest strengths - the ability to market directly to a targeted audience. They attract clients by placing full-page ads in camp trade publications and attending industry trade shows. In return for the $500 fee, each camp gets a colorful stand alone Web site that is also accessible through the "featured camps" icon on the Kids' Camps directory. many sites contain e-mail links that put would-be campers in touch with the camps directly.

The more than 16,000 people who visit the Kids' Camps site daily can use its interactive database to find camps that cater to specific needs or interest - say, a camp in Minnesota for a 12-year-old girl who loves horseback riding, or a family camp in the Midwest that features fall activities. Altogether, more than 5,000 camps (most with just a simple text listing, which is free to the camp) are included in the directory, which may be searched at no cost by anyone with Internet access. The number of visitors has risen 300% since January, thanks to aggressive marketing. One example: If you use the Yahoo! search engine and key in "summer camps," a banner ad for Kids' Camps appears at the top of the screen. Kids' Camps also advertises through traditional print ads in national media.

"The difficult part is not building a Web site, it's being found," says Diamond. "That's why we market so extensively."