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Sidebar: Opportunities Online

When Elon Musk C/W’95 came up with the idea of creating interactive classified ads and local entertainment and restaurants listings on the Web, he struck Internet gold—his Zip2 Corporation sold for a reported $300 million-plus early this year (see main story). Only time will tell whether his latest venture, a planned financial-services Web site called X.com, will be equally successful, but some other Penn alumni—while not yet in Musk’s league among cyber-moguls—have carved out niches of their own on the Net.

Page-turners for Practitioners

    With volumes that include EKG Pocket Survival Guide, Fluids and Electrolytes: A Practical Approach; and Mucosal Biopsy of the Gastrointestinal Tract, one might assume that an online bookstore would be hard-pressed for customers.
    But that hasn’t been the case for www.MedBookStore.com, created by four Penn alumni. They honed in on required reading for thousands of doctors, nurses and health-professionals-in-training; added a 10 percent discount and next-business-day delivery; and amassed a loyal customer base faster than you can say Sphygmomanometer (they sell those, too). "This is a much faster, cheaper, easier way" of purchasing medical books, explains Sundeep Bhan C’94, the chief executive officer of Medsite.com Inc. His friends and business partners include Rajnish Kapoor W’93, chief operating officer; Sameer Shariff W’93, chief strategic officer; and Sanjay Pingle W’93, chief marketing officer.
    Selling texts to time-pressed doctors is just one of the company’s ventures into e-commerce. "I think our long-term strategy is really to be the physician’s home on the Internet," Bhan says. "We’re basically looking at their everyday needs and providing solutions to make their lives easier, and save time and money." Already they have built upon their book trade by offering software and medical supplies, launching a medical-journal tracker to help doctors keep up with the latest news in their fields, providing an e-scheduling tool and hosting online discussions to cultivate an interactive medical community.
    The business itself grew out of an idea Bhan had while taking biology during his sophomore year at Penn. At the time, he was a pre-med student; he later switched to business and communications. "I had to write some papers using Microsoft Word. It kept getting stuck on every medical term. The thought crossed my mind that somebody should make a medical spell-checker. Three or four years later, we went out and created the software." Although Bhan and his friends eventually sold it off to another medical publisher, their efforts to market the product led to the creation in 1997 of www.medsite.com—a medical search engine which reviews other Web sites and now offers an array of products and services to health professionals. They have set their sights on a potentially huge international market.
    According to Bhan, Medsite has more than 200,000 registered users from more than 60 countries; one-fifth of its revenues come from customers outside the United States. He expects the company to bring in more than $11 million this year and for its staff of 100 employees (up from 20 less than a year ago) to double within the next six months. They take up two floors of an office building at 13th and Broadway, in Manhattan’s "Silicon Alley," and are looking for more space. "The beauty of the whole thing," Bhan says, "is the growth is phenomenal. The excitement is unbelievable."
    Like that other, really large online bookseller, Medsite hasn’t turned a profit yet. Bhan, however, emphasizes the importance of company growth at this stage. "If we wanted to be profitable today, we could be, but we’re spending a lot of money on marketing, building our brand, and it won’t be long before we can leverage our existing customer base to bring new products and new services to them. Right now, it’s a land grab."

Just Click, then Sniff and Sip

    Looking for a hearty Argentinian Malbec for less than $10, a 1995 Bordeaux with chocolate and currant accents or simply a last-minute birthday gift for Dad? James Cawley C’91, president and founder of Directcellars.com, hopes you’ll get on the Web and browse in his store. Cawley gave up bond trading on Wall Street about a year and a half ago to start the business.
    Experienced connoisseurs and novices alike can search the site for wines by color, varietal, country and price, or simply peruse the latest recommendations and selection of gift samplers. Wine reviews and a food-and-wine pairing database provide information that is typically absent from actual wine stores.
    What you won’t find on these virtual shelves, however, are scores of high-priced "trophy wines" or popular supermarket sellers. "We’re not the Amazon.com of wine," Cawley explains. "We troll the universe of wines—we have access to 35,000 for next-day delivery—and we edit them down to a list of 1,000. We go out there looking for cutting-edge wines." His company employs two "very high-end, exciting sommeliers" who taste about 150 wines per week.
    With so many e-commerce businesses popping up in every category, Cawley says, the biggest challenge is figuring out how to "drive the traffic to your site and get them to buy." Direct Cellars’ strategy is to make wine-buying "an entertainment proposition, as well. We don’t want to be like a state-owned, stodgy wine store. We want to make it a pleasurable experience."
    In this vein, DirectCellars has begun organizing on-line wine tastings, using Real Audio broadcasts. "People will be able to pre-buy a sampler of South African reds, and we’ll bring over a wine maker from one of the [featured] wineries to talk about the harvest," Cawley explains. "Then we’ll have a tasting where you can ‘sit’ with a few friends on a Tuesday evening" and try the wines. "We’re taking the old world of wine and blending it with the new world of the Internet."

One Hopping Shopping Site

    How do you convince customers to fill their virtual shopping carts with CDs, clothing, jewelry and even pet toys? "You need to have value and convenience combined with the familiarity of a brand consumers feel comfortable with," says Scott Lenet WG’97. "What Internet-commerce companies need to do is make sure they provide all three things, so shopping online is superior to shopping in an outlet mall and sifting through bins or picking up the telephone and calling an 800 number."
    Lenet and his partner, Peter Bauert, believe they have achieved that winning combination with their Web site, SmartFrog.com. Customers sign up for the free service and earn cash-back rewards each time they make purchases at any of 100 online merchants, ranging from JCrew to Omaha Steaks and The Disney Store. The rewards, known as "Frog Dollars," can be redeemed for cash twice a year.
    Lenet says, "There are many ways to help and reward customers when they shop online, and we’re expanding the number of services and stores dramatically in our new release." The next version of SmartFrog.com (the site was officially opened in February) is due to be released this fall. Lenet and Bauert, co-CEOs of the enterprise, based in Austin, Texas, brainstormed the idea while working for the technology company Trilogy. "We used to come up with about an idea a week for a business. Generally it’s easy to shoot ideas down," Lenet explains. "There are always a ton of reasons why a business isn’t worth pursuing. But we couldn’t shoot this one down."—SL


   

 

 
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