Peep Peep

Ideas Hatched Internally

Business.com serves as a combination directory and business library. The site allows users to search for businesses on the Internet by company name or industry. The information on Business. com is selected and organized by a team of 50 industry experts and library scientists-your own "librarians," if you will.

Business.com is new kind of incubatee, one where the idea is hatched inside the incubator and then handed over to a professional executive to develop as his or her own. Gumbel came on board with a founder's stake and the charge to oversee the development of content on the site, bringing his 16 years of experience as an award-winning reporter and senior editor at The Wall Street Journal.

Although Business.com had only incorporated in November 1999, the site "graduated" to its own space and self-sufficiency by May 2000 and launched in June. "The real challenge was to build the company quickly and efficiently, and that's where the incubator was a tremendous help," says Gumbel, 42. "We could focus on building a really strong product and didn't have to worry about being bogged down by details."

Christian Gunning of eCompanies says that 80 percent of the ideas incubated there are generated internally. In its first year, eCompanies reviewed 4,713 ideas, built business plans for 42 and chose 11. Companies are rejected for a variety of reasons, primarily unworkable revenue models, weak audience demand, lack of addressable markets or low expectation for VC funding down the road.

Companies that choose the incubator route still need to seek outside funding to grow. But when the incubated start-up seeks additional capital, the valuations are typically higher because the company has a launched site and a strong management team.

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This article was originally published in the February 2001 print edition of Entrepreneur with the headline: Peep Peep.

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