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London Networking Club Is Hot Ticket for E-Business
By STEPHANIE GRUNER, THE WALL STREET JOURNAL
September 7, 1999
Copyright © 1999 Dow Jones & Company
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LONDON -- For anyone who thought Europe was sleeping through the Internet
revolution, they should spend an evening at London networking club First
Tuesday -- if they can get in. The hottest thing on London's Internet scene
these days isn't a Web site or fancy new software. It is this 11-month-old
networking club, whose parties have become the place to see and be seen for
London's wired set -- from scruffy designers, to hip venture capitalists and
even the occasional bigwig banker or politician.
Europe is perceived as being behind on the Internet. Telephone calls are
costly, making access expensive. Different languages, regulations and tax
regimes hinder growth, and compared with the U.S., only a small percentage
of the population is actually online. Despite these obstacles, enthusiasm
for the Internet in Europe is surging, as a visit to First Tuesday
www.firsttuesday.com
demonstrates. For a few hours once a month, hundreds of people cram into a
room to drink wine and schmooze, but also to do deals and land jobs. The
events are so popular that aspiring net-setters are being turned away by the
hundreds. Organizers have been reduced to using lotteries for each event,
held on the first Tuesday of each month. The next gathering is Tuesday
evening, and some 700 people are seeking the nearly 400 slots. To cope with
demand, organizers waited until last Sunday to disclose the location.
The event is so popular that First Tuesday's organizers are taking the party
on the road. Besides London, the group will host parties Tuesday night in 14
European cities as well as Sydney, Australia. Another 10 cities are in the
works for October, including Moscow, Tel Aviv and Tallinn, Estonia. The
First Tuesday phenomenon is a bit like the salons in Silicon Valley at which
Internet people swap ideas -- and business cards. Similar gatherings go on
in European cities such as Stockholm and Munich, Germany. However, few
Internet-networking organizations, even in Silicon Valley, have taken off
like this one. Companies, too, are betting on First Tuesday's success. AOL
Europe, a joint venture between America Online Inc. and Bertelsmann AG, and
Spanish banking group Banco Santander Central Hispano SA are sponsoring
First Tuesday gatherings. Venture capitalists have offered seed capital,
valuing the event, which takes 5 pound ($8) donations at the door, at as
high as 4 million pounds. Michele Appendino, a co-founder of venture capital
firm Net Partners who travels from Milan to First Tuesday parties, says, "It
would be a good idea to invest there, but for the moment it's a community
not a business."
It all began when Adam Gold, a former investment banker turned Internet
startup employee, traveled to Silicon Valley in the spring of 1998 to study
the Internet industry. He says he was amazed by how easily people shared
ideas and contacts. "I thought life is so easy out here compared to the
U.K.," he says, adding British networking events were typically stiff,
sit-down dinners with people wearing nametags. Mr. Gold discussed the idea
with friend Nick Denton. The fellow Briton also had just returned from
Silicon Valley to start an online news service called Moreover.com Ltd
(moreover.com1). The two linked up with Americans John Browning, Wired
magazine's European editor, and Julie Meyer, a venture capitalist with
NewMedia Investors Ltd., London. Plenty of people in Europe were doing
clever things on the Internet, they believed. "The obvious thing to do
seemed to be to put them all together and see what happened," Mr. Browning
says. They sent out 50 or so e-mails to friends, suggesting they forward the
message to their friends. On a Tuesday night in October, about 60 industry
entrepreneurs and others crammed into a pub in Soho. The next month,
attendance at a similar event doubled. The group moved to bigger quarters.
News about First Tuesday spread fast, especially given its reputation as a
place to find money. David Lethbridge, co-founder of wedding Web site
Confetti.co.uk (confetti.co.uk2) raised $3 million working the crowd at
First Tuesday. "It's a very exciting time," Mr. Lethbridge says. "When we
started our business, people were nervous to invest. Now they're almost
nervous not to." London venture capital firm Atlas Venture led the
investment in Confetti. Christopher Spray of Atlas says the firm also has
invested in three other Internet start-ups it discovered at First Tuesday
and is considering investing in three more. Mr. Spray typically shows up at
the event in Silicon Valley style -- jeans and a blazer -- with two or three
other partners. They sweep the room, typically returning home with fists
full of business cards.