CAMBRIDGE, Mass., Nov. 22 (LocalBusiness.com) -- The bloodletting that
followed the crash in the Nasdaq last Spring has made the search for investment
by entrepreneurs, young and old, very difficult. And nowhere is that more true
than in the college dot.com marketplace.
Ask Young Il Kim, known to his friends as Gil, who is looking for $250,000 in
angel funding to continue operations at his latest venture, CampusNut.com Inc.,
an entertainment and academic Website he says is aimed at Generation Y. That's a
marketing term for the generation of kids born in the U.S. starting in 1996.
Although young, this earnest 27-year-old Harvard economics graduate already
knows something about running a business. He was the business manager and sales
manager of The Harvard Crimson, the campus newspaper at the eponymous
university.
He also started Xanadu Inc., a candy and nuts distribution company, from a
$5,000 investment that now encompasses 300 retail clients, including colleges,
supermarket chains and convenience stores. Kim's parents are now running that
business.
And then he got into education Websites, co-founding and serving as director
of sales, recruiting, and marketing for Campus24.com, the first college auction
site. Campus24 became the first acquisition of CollegeClub.com Inc., which only
weeks ago was saved from the bankruptcy block by Student Advantage.com Inc.
Unlike various community and content sites, Kim told LocalBusiness.com,
CampusNut.com distinguishes itself by having a network of "talented and
humorous" writers from top-notch educational institutions.
He runs a tight ship. Financing so far is $50,000 and the company employs two
full timers and gets help from family and friends. He is under no illusions that
the idea is a hard sell. "I may have to go to friends and family to finance
this further," he said.
Meanwhile, the company has no debts and has streamlined its business so that
the anticipated operating cost does not exceed $50,000 per month (currently
$12,000 per month). Its content development has been acquired for less than
$20,000. Current revenue models are divided into three broad categories:
advertising, direct marketing and electronic commerce.
"No company has been able to penetrate Generation Y the way Yahoo.com or
Amazon.com have done for the overall population," Kim said. He estimates
that there are literally hundreds of Internet companies in the Generation Y
space and those represent potential competition and/or partners.
While the broad Internet audience within CampusNut.com's target group is
nearly 50 million, Kim anticipates a small market penetration, perhaps around
two percent. "This is an aggressive estimate. Plenty of companies such as
StudentAdvantage.com, Mybytes.com, Snowball.com, and Alloy.com failed to reach
significant market share despite millions spent on marketing."
CampusNut.com thinks that effective grass roots and cost-effective marketing
can help it to reach a base of 1 million visitors if the content is well
developed.
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