Lessons worth more than a million dollars
LURID and crowded, Alex Tew's million-dollarhomepage.com website looks like an online Las Vegas -- hectic, improbable and making a fortune out of nothing.
It boggles the mind as much as the eyes: the website raised its target $1.0m (£573,000) in five months, with costs of less than $50,000. Mr Tew admits it was a one-off, but the 21-year-old believes the knowledge he gained was worth more than $1.0m. "Potentially I have gained more than $1.0m worth of information," he says.
He had already made several less successful attempts at online businesses. His first was a music festival website, set up while he was a teenager at boarding school. It was easily eclipsed by better-funded competitors. Undeterred, in 2002 he launched another website around his love of human beatboxing -- making percussion-style hip-hop sounds with the voice -- with the help of a £2,000 Prince's Trust grant.
"Socially it was successful because I met a lot of people and did things like organising events and touring in Europe," he says. But despite gaining thousands of members, he says, "that community just wasn't big enough to support a business". In early 2005, with little financial success to show for all his efforts, Mr Tew decided it was time to try university.
Reluctant to spend three years going into debt, he revisited an earlier idea of internet-based relaxation tools. He had saved £1,000 from working in Tesco and got a loan of £1,500 from Barclays towards the website, loginchillout.com.
But it, too, struggled and in August, almost out of desperation, he invested euro50 (£34 in setting up milliondollarhomepage.com. Friends and family bought the first $1,000 worth of pixels. The proceeds of the first sale of ad space went on putting out a press release on PRNewswire, which brought the site to the media's attention, while the audacious project was already generating chatter among bloggers.
The beatboxing project had exposed Mr Tew to the media -- he had written press releases for the events and garnered national coverage. He knew the importance of marketing but insists that having a good idea was just as crucial. "The whole thing is built on attention," he says. "Media is only one part of attention."
After a couple of months of intense media coverage he had sold about $400,000 worth of pixels, but sales were waning. "There were times when I thought it was slowing down, and I hated that." In November Mr Tew hired Imal Wagner, a US publicist, to organise a weeklong media tour.
He sold another $100,000 worth of pixels in that week alone and in late January the last pixels were sold. In total Mr Tew has spent between $40,000 and $50,000 setting up and promoting the website, with most going on publicity.
Mr Tew's plans have changed slightly: he has deferred his business degree at Nottingham University. "I'm no good at studying in the traditional sense," be says, but recognising his skills and shortcomings was one of the most valuable lessons from the venture. "I'm terrible with accounting. I've got an instinct for marketing and can recognise good ideas ... but I don't know enough about business."
Learning to delegate has also been important. He pays his mother to work part-time as his PA and his brother Nick, a graphic designer, looks after the website fulltime. For his next big project, a social networking website to be unveiled in the next few months, he wants to bring in more experienced business people.
"It could be a billion dollar company. I'm always thinking really big - there is no point thinking small. I wanted to do something as impactful and profitable as Google," Mr Tew has been contacted by about a dozen serious investors, and his success means it won't be difficult to get an audience with venture capitalists.
Mr Tew is also writing an e-book to sell via his website, and plans to revive loginchillout.com, which he sees as a potentially successful, if small, business. He plans to invest "a few thousand here, a few thousand there" in other, smaller projects, although he is wary of becoming unfocused.
"I don't mind if I'm not running the company," he says. "My ideal would be to sit in a room all day, coming up with ideas." That, he says, is often overlooked. "People don't spend enough time on the idea -- they just focus on the execution."
Mr Tew has also learnt the importance of resilience. "If it doesn't work out," he says of his next big project, "it is not the end of the world."
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