Despite this setback, Yankee Group's Smith thinks MercadoLibre has legitimate value for Latin American consumers. "MercadoLibre's model takes advantage of what the Internet does best. The fact that they aren't trying to sell bricks or pet food -- along with their relatively early, well-funded start -- means that they've got a chance," he says. However, he cautions that MercadoLibre will have to start showing some solid success (in terms of increasing revenues and eventual profitability) this year because a significant percentage of the highest income Latin American residents are already online, Smith says.
Bringing in the grownups
One of the luxuries of doing business as a B2B rather than a B2C Web startup -- whether in the United States or abroad -- is that your customers are likely to be much readier to accept your offering. For the founders of Stockholm-based Jobline International, there has been precious little in the way of waiting around. Jobline was founded in Stockholm, Sweden,
in 1997 by Lars-Henrik Friis-Molin. Friis-Molin had been conducting online research on university students' attitudes for another company, Universum, when he realized that the personal data the students had entered would make an excellent job-hunter database. So, with the students' permission, Friis-Molin created a database (now up to 644,000 CVs) for recruiters and job boards for students. Clients pay Jobline about 10 percent of a successfully placed candidate's salary -- a major savings over the traditional 25 percent employers pay offline headhunters.
In 1998, Friis-Molin forged a profitable partnership with Bonnier Group, the largest Scandinavian publisher, which positioned Jobline to expand from Sweden into Norway, Denmark and Finland. U.S. venture capital firms invested in the growing company in late 1998. At the time, European VC firms were just getting up and running, and it was easiest to start with U.S. investors.