While some entrepreneurs in the current boom are proving that there are second acts in America, others are quietly proving that the first act isn't over. Case in point: Jake Winebaum. After starting Disney's first big Web effort, he joined with Earthlink founder Sky Dayton to create an "incubator" of businesses called eCompanies. One famous excess was a reported $7.5 million payment simply to secure the domain name for a new company called business.com. When the bust came, too many of the incubated babies didn't make it. But business.com kept going and, under Winebaum's stewardship, is a profitable "search engine for business" supported by lucrative pay-per-click ads. This week he will introduce work.com, a spinoff designed to provide "guides" (written not just on assignment but also by volunteers). Winebaum, 47, also blows off steam by extreme athletics; the weekend before he came to New York for our interview, he participated in the Everest Challenge, a two-day bike race in the Sierras. He finished third.
Winebaum: They're actually overwhelmed by the information. Type in "accounting software," on Google and you get 203 million results. They don't have time to go through that to find the accounting- software answer they're looking for. And articles they read have an editorial viewpoint but can't lead you to solutions on the Internet. So we created these guides that basically combine the informative editorial nature of an article with the action orientation of search results.
You'll get a lot of satisfaction out of helping entrepreneurs solve their problems. There's also a pure business motivation. If you're an expert on 401(k) plans, and you want to help business people figure that out but also perhaps use your services, you write a general guide on 401(k) plans and you have a member profile that will then link from your guide.
We stayed focused on the needs of small business. We spend all of our time trying to understand what entrepreneurs are trying to accomplish on the Internet, and to service those needs. For example, when a small-business person types [into the search field] a toll-free number, they're looking to buy an 800 line, versus a consumer, who may be looking up an 800 number. Knowing who they are gives us tremendous advantage in figuring out what kind of results will be relevant to them.
We bought it from Dow Jones for $400,000 in 2001, when it was an active site with traffic.
The $7.5 million was a stock deal that we did in 2000 when Internet companies were fairly highly valued. When we did our refinancing in 2004, that stock was revalued and we redeemed it for $2 million in cash. So it was $2 million.
I think we did exceptionally well for our generation of companies. We had Jamdat [a mobile games company], which went public and sold to Electronic Arts for $700-plus million. We were the lead investor in LowerMyBills, which sold to Experian for $400 million. We own a significant percentage of business.com, which is successful and profitable; Boingo, which is successful and profitable, and USBX, which is successful and profitable. That's a pretty good track record. There were also four companies started within the incubator that didn't make it. They were all good ideas, but there wasn't the capital and the resources to keep them going at the time.
You can't implant a CEO into an idea. Creating an idea, funding a company and keeping it going takes incredible passion and belief. It wasn't until I went back into business.com as the CEO, Sky went into Boingo as the CEO, Mitch Lasky went into Jamdat as the CEO that these companies really took hold and succeeded.