Making a career dream come true means different things to different people. For a certain brand of entrepreneurs who have a passion to share with the world, the best career path is self-employment.

“I’ve always been big into goal-setting and making dreams come true,” says Anne Leighton, an independent music publicist from the Bronx. Arnold Schwarzenegger’s inspirational book, Arnold: Education of a Body Builder, occupies a coveted space in her personal reference library.

Leighton was previously an editor with Hit Parader Magazine, a teen-oriented entertainment tabloid, where she input song lyrics and handled op-eds. “Friends just started asking me to do publicity for them, and they happened to be in various rock bands.” These friends included groups like Warrant and musicians like Glenn Hughes from the groups Trapeze and Deep Purple.

Write On!

What makes self-employment a dream job for Leighton is the fusing of two aspects of work—working from home and creative writing. “I’m working from home so I’m doing enough to get by and feed my cats.”

Leighton finds publicity writing “easy, because it’s nonfiction. But when you’re doing the creative writing, like scripts… that’s a challenge.” It’s not that she’s getting published, she says, but that she’s always writing. “And getting things done, working toward getting published.”

While her success rate with her more adventuresome projects hasn’t been as fruitful as her recent music publicity coups, Leighton remains enthusiastic. “At some point,” she says, “there’s going to be a script that’s going to get published.”

Polite Persistence Pays

Leighton’s trained writing skills are just some of the attributes she employs daily. She’s also adept at contacting and interacting with the media–a highly valuable skill–whether she’s promoting herself or her clients. One of her accounts is the enduring rock band, Jethro Tull, which, over a career spanning nearly 25 years, has sold more than 60 million CDs and records worldwide.

A common refrain heard throughout Leighton’s resume is one of persistence. She’s affably tenacious, a skill to be cultivated by the self-employed regardless of one’s field. “You can’t be intimidated by having to make ‘cold calls,’ to borrow a term from the sales world,” Leighton insists. “If you don’t promote yourself, who will?”

Labrador of Love
Sandie Hollander’s clients include Beauregard, Ginger, Misty, and Miko. Most, except for the ones with feathers, walk on four legs. As the sole proprietor of Exec-U-Pet (The Tail Wagger’s Best Friend), a personal pet care service in Jacksonville, FL, Hollander wouldn’t have it any other way.

After living in Atlanta for nearly 30 years, she greeted her silver years with a second husband, a new home city–and a new career. Her advice to those frustrated with their careers, office politics, or the daily grind? “You have to do something you really love.”

Citing personal experience, Hollander recalls how her husband, a well-to-do corporate executive, complained daily. “He used to say to me, ‘I hate this job; I can’t wait to retire.’ The only reason he continued is because the money was good,” Hollander says. “I’ve come to regard that as such a waste. To do something that you love is rewarding. I enjoy this so much; there are days when I wake up at 4 a.m., eager to see all my clients.”

Use Your Strengths
Hollander combines her seasoned business skills with modern technology to accomplish her tasks. With as many as a dozen or more furry clients per day, spread out over a sprawling geographic area, time management is paramount. “I have a ‘paw pilot,”’ she quips about her version of the palm pilot. “And I also keep a tape recorder in the visor of my car. That way, when someone calls with me directions or instructions, I just quote directly into it.”

Hollander also uses her strong customer service skills. As a result, most of her business is due to enthusiastic referrals. “My goal is to give my clients the same service I’d expect from someone looking after my beloved pets,” she says.

The spirit of providing excellent service, combined with unbounded enthusiasm, can give the self-employed an edge on job satisfaction that few workers enjoy.

“It’s especially difficult when you have three stores. There’s a lot going on. But I wouldn’t trade the experience for anything,” says Breindel.

The undergrad decided early on that he would rather work for himself than someone else. He opened his first on-campus store, called Nate’s Place, in August 2000. The store provides students with an array of services, including cellular telephones, test preparation and travel-arrangement services and computer repair.

Breindel came up with the idea for a student-focused store after he went to a nearby mall to buy a cell phone. He was upset with the service and soon realized that most students would rather go to an on-campus store geared toward their needs than drive several miles to a nearby mall.

“This is a platform for student-oriented services. We can add and take out,” says Breindel. He not only added services. He added stores. Breindel now operates three stores and employs seven part-time employees. In addition to the first store, he also operates a store at St. Louis University and the University of Missouri-St. Louis.

“With any luck, we’ll have five more next year,” says Breindel, who plans to continue the business after graduation. “I see the large state schools as the most lucrative. I think there eventually could be 350 Nate’s Place stores across the country.”

A Good Alternative

Starting a business now, while the job market is lousy, may be a good alternative to finding employment. At first glance, though, it might seem especially risky with the economy still in the doldrums. But Breindel may be on to something. Over the years, college-age students have started some of the largest and most successful companies. At the age of 17, Fred Deluca borrowed money from a friend and started Subway Restaurants. Paul Orfalea leased a garage, rented a copy machine and launched Kinko’s.

And now actually may be a good time to start a company, says Kenneth Harrington, professor of entrepreneurship at Washington University. Harrington has seen the entrepreneurship program at his school triple in size since the year 2000. Breindel is just one of 450 students in the program this year.

“If you find the right opportunity where you can make high margins and high growth and cover your capital needs, it’s possible that these types of businesses can get started without support financially in good times and bad times,” says Harrington.

But how do you go about finding the right opportunity? Harrington says the first and possibly the most important step is creating the idea. Think about major societal trends.

Next, look for pain. Harrington says it’s important to notice things that bother you. “If you see a major trend and see some things around that trend that are causing pain or not working well, then that creates an opportunity,” he says.

Who Will Buy and Why?

Once an opportunity is identified, ask questions to find out if the idea is promising. Who would get the most value of any offering? How much is that person willing to pay? How would you sell or distribute the product or service? “What we want to do is identify whether the opportunity is really real,” says Harrington.

If you still think the idea is promising, the next step is team formation. Decide what kind of team is needed to implement the business. What kinds of skills are needed? Who would play what role? What legal structure would be most appropriate? These questions help the entrepreneur to imagine what the business would look like.

Now comes the hard part: raising the necessary funds to get started. Since most college-age students would have problems raising money for a new venture, you may want to consider the bootstrap approach to entrepreneurship, which means starting a business with very little money.

“If you bootstrap, [your] idea has to be valuable enough for you to get the customer to give you high enough gross margins or terms on your offering, in terms of paying you early or paying you for your effort as you create your product. The value has to be high enough that they, in fact, are funding your business,” says Harrington.

He continues: “You could have a mediocre idea, execute flawlessly and be successful. But the probability to have an undergraduate execute flawlessly is low. Therefore, the opportunity has to be right, or we would recommend you not pursue it.”

Good Timing

A lack of family responsibilities is another reason why undergrads may want to consider starting a business, says Caron St. John, director of the Spiro Center for Entrepreneurial Leadership at Clemson University in South Carolina. “It’s not as much risk for them to try to start a business as it would be for someone with a family and other obligations,” she says.

The key to success, according to St. John, is the student entrepreneur’s willingness to rely on others with experience. “If they’re willing to work with people who have experience in developing new businesses and launching them, then I think they’re much more likely to be successful than someone who wants to do it completely on their own.”

Help From Friends

Many students she works with are good at enlisting the free assistance of friends and family, she adds. “Often they enlist the support of others to give them time. That’s a wonderful source of bootstrap funds,” says St. John. “That goes beyond the ability to recognize an opportunity.”

Adam Witty, a marketing major at Clemson University, enlisted his friends and family to help him start a business. Witty launched TicketAdvantage in the fall of 2001 with the financial backing from his father and help from friends.

TicketAdvantage is an online secondary-market ticket exchange that allows season-ticket holders to sell their unused tickets. Witty spent about a year building the infrastructure of the business before launching it.

He says his biggest problem is skepticism from the business community. “It’s probably a little bit harder to get the attention and the respect of companies that you are trying to work with, because a lot of people think we’re just stupid kids,” he says.

Witty plans to continue the business after graduation and hopes it will eventually support him and the friends who are working with him. He advises other students who want to start businesses to follow their dreams.

“If you do have an idea, develop it, and if the pieces fit together, start a business,” he says. “Starting a business in school is a great opportunity. If you can get it going, then when you graduate, you won’t have to work for someone else.”

With the dry-up of funding, fewer students are thinking about starting businesses, particularly dot-com ventures. At Harvard Business School, the decline in student entrepreneurs has been steep. About 40 teams entered the school’s annual business-plan contest in 2008, compared to 60 in 2007, even though the top three winners receive cash prizes.

About 12 of the b-school’s teams received venture-capital funding in 2007, compared to 33 teams in 2006. School officials aren’t sure how many of this year’s 41 entrants received VC funding, but expect the number to be low.

“We’ll probably be able to count them on one or two hands,” says Thomas Eisenmann, a Harvard Business School assistant professor.

Two Risk-Takers

The decline in entrepreneurial activity at Harvard has made rarities out of students bold enough to risk writing a plan and seeking funding for a business. Paula Pontes and Samantha Ettus, recent Harvard M.B.A. graduates, say they stuck out like sore thumbs when promoting their new business idea on campus. Called Magic Ribbon, it would sell a software-based solution aimed at improving employee retention rates by enhancing communication.

“Last year we might have been a dime-a-dozen,” says Ms. Ettus. “This year it just wasn’t the case.”

Ms. Pontes and Ms. Ettus tried to use their “novelty status” to their advantage when seeking funding for their business. Being among the few “enabled us to get a lot of attention from the venture community, as well as the people on campus,” says Ms. Ettus.

Much of the change in attitude toward starting companies has been due to the stock market’s erratic performance in 2008, says Ms. Pontes. “Business-school students in general are just more risk averse,” she says. “When the market was very high and it was very easy to get funding for any kind of idea, everyone had a business plan in their back pocket.” Adds Ms. Ettus, “Last year starting a business was the cool thing to do…this year it’s, ‘Oh, that’s risky’.”

Other Harvard students noticed a drop off in entrepreneurial activity. In 2000, if three students were sitting together at lunch, “that meant they were working on a business plan,” says James Ratcliffe, a 2001 M.B.A. graduate now with Narad Networks, a 135-employee start-up in Wesford, Mass. “It’s definitely wasn’t that sort of frenzied atmosphere.”

The class of 2002 seems to be even more risk-averse than the class of 2001, says Mr. Ratcliffe. Whereas his class gravitated toward consulting careers, new second-year students seem more interested in banking, he says.

Packed Conference

Despite the new risk-averse sentiment, industry leaders speaking at Harvard’s annual Cyberposium high-tech conference for M.B.A.s encouraged fledgling entrepreneurs not to give up their dreams. As long as their businesses solve problems and their plans make sense and show how and when cash flow will be generated, capital is still available.

Students from 30 business schools world-wide attended the event and crowded into a career fair afterwards. Technology giants with booths at the event included Yahoo Inc., Microsoft Corp., Dell Computer Corp., Inktomi Corp., Intuit Inc., RealNetworks Inc., AOL Time Warner Inc., Akamai Technologies Inc., Cisco Systems Inc. and the Extreme Blue program created by International Business Machines Corp.

Yahoo drew the largest crowds, attracting students seeking positions in business development, brand marketing, graphical user interface and administration. The big turnout at Yahoo indicates that the dot-com crash is encouraging students to find new ways to use the Internet, not desert it entirely, says Mr. Eisenmann. While launching a dot-com isn’t a popular option for M.B.A.s, neither is working for firms with 40 or fewer employees, Mr. Eisenmann adds.

New View of the Internet

Still, keynote speaker Tim Koogle, former president and chief executive officer of Yahoo, encouraged entrepreneurs to hold on to their dreams. Now that the Internet is going from “experimental and quirky” to “essential for consumers and businesses,” more opportunities exist for start-ups that focus on finding solutions, he says.

Mr. Koogle described the recent slowdown in the U.S. economy as an “economic pothole” and predicted the number of Internet users world-wide will grow from to 500 million in 2002 from 300 million in 2001 — providing more opportunities for well-conceived startups.

“The Internet is becoming essential,” says Mr. Koogle, now vice chairman and director of Yahoo. “Businesses world-wide are adopting it as their infrastructure…this is a very interesting breakpoint we’re crossing over, because this is when real value gets built.”

Funding is available for start-ups that provide solutions for businesses and consumers using the Internet for their infrastructure, says Mr. Koogle. “The capital markets are being a little more discretionary right now,” he says. “You need an idea with some promise of a decent business model that gets you to cash-flow-positive in some rational period of time. That combination is actually being rewarded for new business ideas right now.”

Ms. Ettus and Ms. Pontes agree that investors want to see solid business plans that spell out solutions to specific problems instead of broad, grandiose business plans presented by early dot-com entrepreneurs. “VC and angel investors really want to hear that you’re solving a problem,” says Ms. Ettus. “That seems to be the universal sentiment — that you’re solving a problem.”

Ultimately, the funding climate proved too tough for their idea and it’s been tabled until conditions improve. “We still believe in the product, but it looked as if there would be an enormous battle to raise funding,” says Ms. Ettus. “This isn’t to say that in two years we won’t be back.”

Different Approaches

“There’s no diminishment in interest in the New Economy…[students] know their jobs are going to involve a wired world: networked commerce, communication, content and all that jazz,” says Mr. Eisenmann.”They’re just going to be doing it in a different kind of place than the [prototypical] five kids in a garage.”

Moreover, although entrepreneurial interest has declined at Harvard, it’s still higher than in pre-Internet days, says Michael Roberts, the school’s executive director of entrepreneurial studies. “The pendulum is swinging, but it hasn’t fallen to levels of the pre-Internet bubble,” he says.

The Internet explosion was an aberration, but for students to flock to the market with business plans was rational behavior because competition was weak and starting a dot-com was easy. “Everybody was starting from scratch, and therefore, our M.B.A. students weren’t at the kind of competitive disadvantage they would be in an established industry,” says Mr. Roberts. “The kind of rush you saw, in a large measure, was a rational response to that.”

Nowadays, entrepreneurial-minded students are applying ideas to other sectors, though not in the same numbers, says Mr. Roberts. These include health-care services, wireless applications and social enterprises, such as education.

What’s more, international students are using their skills to start international businesses. “Every year more international students, working along with classmates from the U.S., focus on overseas opportunities,” says Mr. Roberts.

Trends at Other B-Schools

Other top b-schools also report declines in entrepreneurial activity. At Northwestern University’s Kellogg School of Management, fewer students are interested in starting companies because they have less access to funding, fewer opportunities and less profit opportunity, says Barry Merkin, clinical professor at the school. “Our students seem to follow society,” he says. “Fewer people are doing it.”

The Massachusetts Institute of Technology’s Sloan School of Management is an exception. Entrepreneurial activity there is alive and well, even when compared to the dot-com craze of 1999 and 2000, say school officials.

“We haven’t seen a significant drop-off,” says Kenneth P. Morse, managing director of the M.I.T. Entrepreneurship Center. At Sloan, students are encouraged to take a long-term view of their prospects. Consequently, even during the dot-com craze, Sloan students didn’t launch web sites, says Mr. Morse.

“Most of our students didn’t get caught up in the dot-com craze,” he says. “We always knew that the laws of gravity hadn’t been repealed, and we’ve always insisted that student teams needed to quantify the value proposition and have a sustainable competitive advantage.”

The school’s annual business plan competition is a good way to measure entrepreneurial interest. Called the “$50K” competition, it awards a total of $50,000 and a lot of exposure to the top three teams. This year, 135 teams entered the well-publicized derby, down from the 206 that entered in 2000. However, enrollment in entrepreneurship classes remains high, says Mr. Morse.

Sloan has a strong focus on technology, and students have been developing innovative technologies ahead of the competition, says Ms. Morse. He describes it as “serious technology” compared to what he calls dot-com b-to-b and b-to-c “BS.”

“Two years ago [our students] were thinking about optical networking, and now everyone is talking about it,” says Mr. Morse. “Three years ago [our students] were talking about the confluence of the human-genome data and the new technologies in bio-informatics and how to pull those together for new drug discovery.”

Currently, Sloan students are exploring “last mile” fiber optics and ways to provide wide-band Internet access in the home, which could solve drawbacks to DSL, says Mr. Morse.

Women entrepreneurs secured just 5% of the $48 billion of venture capital invested last year. Though that is up from a 2% share in previous years, studies show that women are starting businesses at twice the rate of men. A study released earlier this year by the National Foundation for Women Business Owners shows that when women entrepreneurs actually get their business propositions before venture capitalists, their approval rates aren’t different from their male counterparts.

Thus the upshot: The biggest challenge for women is cracking the tight network of venture capitalists who are deluged with potential deals. But first, more women have to get out there — and learn how to play the game.

“This is a learned skill for most women,” says Kay Koplovitz, founder of the cable-television concern USA Networks and the chairwoman of the National Women’s Business Council, a bipartisan government advisory panel. “I don’t think women are as boastful and bald-faced about their business as men. They have to learn to project themselves in a way that makes a venture investor feel confident.”

Denise Brosseau, president of the Forum for Women Entrepreneurs in San Mateo, Calif., recalls going to a Venture One fair last fall where start-up companies seeking shots of equity gave presentations before investors. Of 80 presenting companies, two were headed by women. And, she says: “I brought both of them.”

Ms. Koplovitz and Ms. Brosseau are among the organizers of Springboard , a venue for women entrepreneurs to make their pitches to equity investors. At the group’s first event this year in January, 20 woman entrepreneurs raised $180 million.

Last spring, organizers borrowed a hall on the America Online campus here and 44 women entrepreneurs made pitches and chatted up venture capitalists.

The presentations to venture capitalists last eight minutes. To prepare, the organizers spent days screening and grooming the entrepreneurs, thus assuring the investors that they won’t be wasting their time. The group also attends a one-day “boot camp” before the event, honing their presentations further.

The boot camp is “torture,” says Tanja Balkan of LeaseStar.com, a Plainview, N.Y., service that provides auto-leasing information on the Web. In small groups, entrepreneurs met for two or more hours with venture capitalists who volunteer to provide critiques. The women answer questions and refine presentations, often based on conflicting advice from investors. Says Ms. Balkan: “One would say, ‘I want to know more about your marketing.’ Another one would say, ‘Let’s hear more about your financial projections.’ ”

For Kelly O’Brien, co-founder of MoneyLife Inc., a Garrett Park, Md., provider of sales leads to financial-services companies, the boot camp drove home the point that investors care less about what her business does than about the return on investment. “At first, we were sidestepping the whole topic, and [the boot camp] made us decide to hit it between the eyes,” she says. The pair changed their last slide to focus on financial results, and closed with: “It’s about the money, honey.”

There was an hour or more spent with a professional coach. The lesson: show biz — how to project their voices, minimize gestures and avoid saying “umm.” A tradeshow coach instructed attendees on what to wear (neutral colors) and what to do (have an organized booth).

Ms. Balkan says she spent about 15 hours a week on the whole process for the past couple of months — a huge time commitment for someone involved in a new business. It was worth it, she says. “The minute I got off the stage, an investor grabbed me and we scheduled a meeting for the next day,” she says.

More-experienced women entrepreneurs dispensed their own advice. Susan Acker, chief executive of Blue292 Inc., of Durham, N.C., already had raised about $20 million for her business-to-business electronic marketplace for environmental health and safety products. “I’ve learned that you can’t just work one channel,” Ms. Acker says. “You have to work all of them — bankers, accountants, attorneys. You have to get your business plan in front of all of them.”

The preconference work was evident in the presentations — sharply distilled talks before 300 people, with the entrepreneurs striding around on the stage, Oprah-style, as giant power-point slides loomed on screens overhead. Virtually every entrepreneur included at least a sentence on the “exit strategy” for the investor — a likely merger, sale or initial public offering.

“If nothing else, we’ve learned how to play this game,” says Ms. O’Brien of MoneyLife.

The coaching clearly fills a need. The study by the National Foundation for Women Business Owners found that many women entrepreneurs are woefully unfamiliar with the expectations that are part of an equity investment. To the question: “If you did seek equity capital for your business, what share of ownership of your company would you be willing to give up in exchange for the investment?” a whopping 48% said none. Just 15% said they would give up as much as 10%. Venture capitalists typically receive large chunks of ownership for their investments and are active participants in the business.

Attitudes are changing. Clara Conti, for instance, was wary of debt and equity deals when she launched her first company, Aurora Enterprise Solutions, a software maker. She bootstrapped her business from a few consulting contracts, and last October she and her partners sold the enterprise for $10 million.

Now launching her second company, Ms. Conti is well aware of the advantage that a round of big financing confers on a technology company — getting it off the ground fast at a time when first movers usually win. Wearing a bright red blazer, she paced before the giant screens at the conference to make her pitch for a $10 million investment in her new venture, Red Spruce Inc., a Great Falls, Va., maker of software for computer-to- computer wireless communication.

“A couple [of venture capitalists] came by and said that they wanted to start due diligence next week,” she reported with satisfaction after her pitch.

Investors also have a stake in crossing paths with women-owned start-up companies. According to the new study, 72% of institutional investors said their approval rate for women-owned businesses was the same as for men; 6% said the rate was higher for women. Linda Powers, a partner with the $60 million venture fund, Toucan Capital, of Bethesda, Md., which invests in early-stage technology companies, said that more than two years ago, the fund hadn’t invested in any women-owned enterprises.

Indeed, its partners hadn’t reviewed a single business plan from a woman, to her chagrin. “I am genuinely surprised and embarrassed by how many great women entrepreneurs this event has brought to light,” Ms. Powers says. “I’m surprised how many are tech companies.”

What does it take to be an entrepreneur today?

Perhaps more than anything else, entrepreneurship is a mindset. How entrepreneurs think about four key elements of their business — process, timing, customers and information — can determine their success. Examining how they deal with these four factors can provide insight into the entrepreneurial attitude.

The Process

The conventional wisdom is you start with an idea and if the idea is good and you implement it correctly, your business succeeds. If the idea is bad or you falter in your implementation, the business fails. The conventional wisdom is wrong.

For an entrepreneur, starting a business is the first step in a never-ending process that you never get right the first time. “We’ve let go of perfection,” says Michelle Toth, CEO of the Inner Workout in Cambridge, Mass. She founded her weight-management business in 1998 and launched it online in 1999.

Trying to get a startup right guarantees that by the time you open, not only won’t it be right, but you won’t have enough time and money to go back and make it right.

Successful entrepreneurs live on instant feedback-and-adjustment cycles. You can’t be locked into one business concept.

Says Shayne Gilbert, president and founder of Silverweave Interactive, Inc., an Internet strategy consulting firm in Boston, “Whatever you can develop in three months, develop it and get it up on the Web and begin interacting with customers.” In addition to starting a business, the entrepreneurs’ challenge is to establish a flexible business-building process. This process should incorporate change and enable you to try, learn and adapt quickly.

Perfect Timing

Everyone knows speed is important. But moving at the right time is what counts.

Can anyone teach you how to develop a sense of timing? Successful entrepreneurs learn to rely on intuition to guide their sense of timing. They know when to take a step because they feel it.

Start-up founders aren’t bound to such arbitrary measures of time as 12-month budgets or three- or five-year business plans. Instead, their love and passion for their business causes them to constantly observe and gather information about their business. This builds their intuition and helps them to take the right step at the right time.

Love and passion for your business is the key to increasing your intuition. When a mother loves her child, her intuition about the child grows because of the constant care and attention she’s giving. In the same way, if you love your business, the constant care and attention you give it will boost your intuition about it. The longer you’re in a business you love, the more your intuition about it will grow.

Timing decisions shouldn’t depend on arbitrary external measures. You must develop your ability to integrate your passion and intuition to make decisions that are right for your business and make them at the speed required for success.

Customer Support

Building a successful business is about satisfying paying customers. Even in cyberspace, you need a customer with an open wallet to provide the return your shareholders are expecting. Traditional thinking says that having a strategic advantage over your competitors is how you become successful. Being better than the competition worked in the era of mass production, but the customer has more control now. Technology has created markets of one through individual customization.

Kathy Allen, entrepreneur and a professor of entrepreneurship at the University of Southern California, says to be a successful entrepreneur, you need to “identify potential customers even before you design your product or service since you need to involve them in the design process.” Then test the feasibility of your products or services before committing your limited resources.

Many successful entrepreneurs base their businesses on customer input and feedback, even in the development stage. Satisfying your customers is the only way to achieve lasting success and realize the potential of your business. After all, you can beat the competition and still not have a satisfied customer.

Necessary Information

Being an entrepreneur requires “a tremendous knowledge of the industry you’re going to be competing in,” says Ms. Allen. Constantly gathering information about your business helps feed your intuition and sense of timing. The gathering, processing and connecting of information is critical to its success. Entrepreneurs talk to their customers, read about them and their industry and attend trade shows. They’ll do everything they can to stay in touch with their business because they love it.

When they can feel their business in their gut, it means that their intuition has developed so that the tiniest fluctuation is a signal to act.

“So,” says Roosevelt Montas, the teacher, “you missed the midterm.” He adds, “If I had to give you a grade today, it would be an F.”

Minutes later, walking across the Columbia University campus in New York, Mr. Berkett is reflective. “I try to go [to class] occasionally, but there’s so much stuff I have to do,” he says. “I’m taking six classes, which is actually stupid for a businessman.”

A businessman, indeed. Mr. Berkett is a college freshman, barely 19 years old. But like many collegians today, he sees academics as a sideshow, a formality to be handled expeditiously. His real reason for attending this Ivy League institution is to forge the connections and gain the credibility needed to jump-start a business.

And college campuses are increasingly ideal settings for aspiring entrepreneurs. They are flush not only with brainpower but also with capital, connections and accommodating administrations. Columbia is no exception. Last year, the university launched Columbia Media Enterprises LLC, a wholly owned company that secures funding and new uses for business initiatives hatched at the university. An undergraduate investment club plans to sponsor its first entrepreneurship competition next year. And the university’s trustees include many heavy hitters on Wall Street.

“I came here for the opportunities, whether it’s [meeting] businessmen, politicians,” says Mr. Berkett, a native Californian. “New York City was such a huge factor.”

And so it’s no surprise that Mr. Berkett seems unruffled by his encounter with Mr. Montas. He doesn’t pretend to be interested in Columbia’s vaunted core curriculum made up of required liberal-arts courses. “At some point, it hit me,” says Mr. Berkett. “I’d rather do stuff, be a mover, than a reader.”

Taped to the door of Mr. Berkett’s dorm room are several photocopied passages from Ayn Rand’s “Atlas Shrugged.” One, highlighted in yellow, reads, “Money is the barometer of a society’s virtue.”

Apologetic No More

“He’s never ashamed of himself,” Mr. Berkett says admiringly of John Galt, the protagonist in “Atlas Shrugged.” Mr. Berkett straightens his six-foot-three-inch frame in his black leather jacket. “He was proud that he’s making money. He gave me a new confidence. I went through a lot of my life feeling apologetic that I’m a rich white boy from Beverly Hills.”

Mr. Berkett crosses a city street and enters another university hall. He hasn’t even glanced at his paper on Saint Augustine, which Mr. Montas returned to him marked B and “one week late.” There’s no time. He has a business engagement. At 11:15, Mr. Berkett is meeting with Robert Moskovitz and Christopher Simoneau, the directors of business and contract services at Columbia. The men have agreed to discuss an idea Mr. Berkett thinks will make him rich: creating a credit card for children. “The idea is giving the kid almost financial training wheels,” he explains.

The three men sit in Mr. Moskovitz’s office. “I’ve made huge strides since our last meeting,” Mr. Berkett says. “All those parental controls we talked about seem completely doable.” He ticks off a few — spending limits, parental approval, a vendor list.

“You’re going to hire us once you get started,” jokes Mr. Moskovitz.

The meeting is the result of careful calculating by Mr. Berkett. Months earlier, he ran for class president. Elected, he scheduled an appointment with Mr. Moskovitz to discuss dining services. But he had other motives for the session. “I started harvesting that friendship,” he explains.

And so, when Mr. Berkett stumbled upon his idea in February, he quickly booked time with the directors to bounce it around.

“If the card is associated with traditional credit issuers,” cautions Mr. Moskovitz, “you have to question whether that’s a negative or a positive.” He and Mr. Simoneau suggest that Mr. Berkett perhaps align with an independent or online bank.

A book titled “The Heart of Coaching” sits on a nearby shelf, and Mr. Berkett opens a leather binder and uncaps a pen, ready to take notes.

The conversation quickly turns to the viability of the teen market. “If we can get a child when they’re 12 and hold onto them for years, we’re really going to have that loyalty,” says Mr. Berkett. “The average weekly allowance for a teenager is over $50 a week. It’s a $150 billion market.”

Mr. Berkett should know. After all, he’s still a teen and looks it. On this morning, he wears a royal blue houndstooth Tommy Hilfiger shirt. His cropped brown hair is slicked up like that of Morrissey, the British rocker.

Mr. Simoneau raises the issue of teaching credit responsibility to young cardholders. “How do you plan to do your education?” he says. “It’s probably a couple-million-dollar-a-year educational process.”

“Is it?” asks Mr. Berkett. He jots that down.

Names for Networking

The trio discusses potential competitors, focus groups and business models before Mr. Berkett seizes a lull in the conversation. It’s time to network. “What about potential incubators?”

The names come fast and furious. In addition to Columbia Media Enterprises, there’s Columbia Innovation Enterprise, a university organization that licenses intellectual property. There’s the Lang Fund, which bankrolls student projects at the business school. There’s Joe Ienuso, who brokered a deal between the university and Citibank, a subsidiary of Citigroup Inc., in New York, concerning automatic-teller machines on campus and student checking. And, of course, there are Columbia’s trustees: the 24 men and women who oversee the university’s roughly $3.5 billion endowment.

Reading aloud from a bound copy of Columbia’s phone directory, Mr. Simoneau ticks off a few of the trustees: John Chalsty, chairman of Donaldson, Lufkin & Jenrette, Inc., New York; Michael Patterson, a vice chairman at J.P. Morgan & Co., New York; George Van Amson, a principal of Morgan Stanley Dean Witter & Co., New York; and Alfred Lerner, chairman and chief executive officer of MBNA Corp., Wilmington, Del.

Mr. Berkett scribbles down the names. “This may sound bizarre,” he says, “but is there a way I could just bump into [Mr. Lerner] on campus?”

Mr. Simoneau offers to speak to Mr. Lerner’s secretary, but only after Mr. Berkett has pulled together his business plan. “You’re going about it the right way,” he says. “Just ask people for connections.”

By the time the meeting ends, Mr. Berkett has gotten names of potential investors and 70 free minutes of counsel. The three shake hands and Mr. Moskovitz turns to the freshman. “You are a student here, aren’t you?”

After the meeting, Mr. Berkett is brimming with confidence. “This may sound cocky,” he says, “but I guarantee I’ll get meetings with all those guys. Alfred Lerner — I’ll call him 100 times a day.”

He has reason to be optimistic. In just two semesters, he has spoken with Sheldon Weinig, a former vice chairman at Sony Corp. of America, and Henry Schacht, former chairman and CEO of Lucent Technologies Inc., in Murray Hill, N.J. But Mr. Berkett is less a novelty than a young man with a well-executed modus operandi. He has attended calculus class just two times all semester, while just twice he has missed a class he wangled himself into at the business school. He devotes his nights to sculpting his business plan, reading the Industry Standard, the San Francisco-based Internet magazine, and e-mailing contacts. And he’s a regular at business lectures at the university, which, time and again, have proved fertile.

In March, for example, Mr. Berkett went to hear Alby Hecht speak on campus. After the lecture, Mr. Berkett approached Mr. Hecht, the president of the film and television division at Viacom Inc.’s, Nickelodeon division, and told him about his credit-card idea. Mr. Hecht arranged for Mr. Berkett to meet Mike Skagerlind, general manager of Nickelodeon’s Web site. Their meeting was scheduled for a Wednesday morning, smack during a quiz in Mr. Berkett’s International Politics class. Mr. Berkett skipped the quiz.

“I hate to call a businessman and say I can’t make it,” Mr. Berkett says. “That’s why I end up missing classes.”

Mr. Berkett walks into Columbia’s new student activity center, Alfred Lerner Hall. He grabs a sandwich and checks his mail. It’s a good day: Both Business Week and Maxim, a cheeky magazine for young men, have arrived. Mr. Berkett turns to Business Week first, fitting for a young man who puts work before pleasure.

Still, Mr. Berkett insists that he has fun with friends. “It’s awesome,” he says. “We go to a bar and get drunk and just talk about business.” But it’s clear that for Mr. Berkett, college is less an opportunity for friendship than partnership.

‘Like the Gold Rush’

“Brian’s very bright,” says Mr. Simoneau. “And he’s made the same realization that many people in the world have made — that [the Internet age] is like the Gold Rush of 1849, that this is like the Industrial Revolution, and he wants to be a part of it. That’s what’s driving him.”

Mr. Berkett’s plan to market a credit card to children may just work. “You could do it,” says Steve Boyden, a spokesman at MBNA, the world’s largest independent credit card issuer. But, he adds, “we don’t feel it’s appropriate to market to someone who can’t make that decision.”

In most states, the age of majority when people can sign their own credit-card slips is 18. But parents can guarantee credit cards for children below the age of 18 — as long as they assume the responsibility for their children’s charges. “Whatever [the child] charges on that card, the primary cardholder is responsible,” says Catherine Cummings, vice president of consumer affairs at MasterCard International in Purchase, N.Y.

At 2:15, Mr. Berkett and Roni Laserson follow Omar Dessouky into an empty boardroom in the student center. They close the door behind them. The three students are officers in CORE, the Columbia Organization of Rising Entrepreneurs, which Mr. Dessouky co-founded in 1998. They’ve gathered to discuss forming an entrepreneurship competition similar to the $50,000 bonanzas mushrooming on campuses across the country.

They discuss competition guidelines, judges, sponsorship, business cards. Were Ms. Laserson, a sophomore, not to flip up her ponytail, strap on her backpack and walk off to catch the remaining minutes of a professor’s office hours, the meeting might be at any corporation.

Like Mr. Berkett, Mr. Dessouky, a senior, is hoping to start a business (distributing ergonomic chairs). But first he will graduate. And he’s certain Mr. Berkett won’t. “I bet him $200 and 200 pushups that he’s going to quit school and start his own business,” says Mr. Dessouky.

If Mr. Berkett isn’t careful, he may be forced to leave school — no matter the $35,000 his family shelled out this year just for his tuition, room, board and assorted university fees. Students at Columbia College whose grade average slips below C for two consecutive semesters are asked to take a semester off. But Mr. Berkett says that even though he rarely attends class, he’s in no danger of landing on academic probation.

“I’m dismayed by his willingness to give up his entire education,” says Mr. Weinig, the Sony executive who spoke with Mr. Berkett. “I told him, if he wants to be rich and stupid, it’s not a bad plan.”

George Rupp, president of Columbia University, is also concerned about students less interested in graduation than networking. “I think it’s deeply problematic,” he says. But, he adds, “that kind of energized focus on developing business plans is extremely rare.”

Missing Person

The CORE meeting ends, and Mr. Berkett heads for the building’s exit. A student with a Prince tennis bag slung over his shoulder stops him just shy of the door. “Hey,” he says. “Haven’t seen you in philosophy in awhile.”

Mr. Berkett walks past a colossal 16th-century tapestry that extends nearly from floor to ceiling some 25 feet high. He has come to Mr. Rupp’s office for a meeting he managed to schedule just the day before. Quickly, Mr. Berkett makes it known that he hasn’t come on class-president business. “My company’s designing a kid’s credit card which allows kids to take care of e-commerce,” he says.

Mr. Rupp settles into an armchair beneath an oil portrait of Seth Low, president of the university 100 years before, and Mr. Berkett begins his business presentation. He rambles on for three minutes, then asks Mr. Rupp if he’d shop his idea to Columbia’s trustees.

“It’s great that a student has an idea,” says Mr. Rupp, “but it’s not something that I’m going to make a knee-jerk reaction to.” He adds, “We have 21,000 students, lots of them imaginative.”

But Mr. Rupp quickly turns encouraging. He mentions Columbia Innovation Enterprise, which last year alone wrote more than 300 licensing agreements and earned about $100 million in revenue from its patents. And he tells Mr. Berkett that if he hands him a written business plan, he’ll consider showing it to some people at CIE.

Perhaps Mr. Rupp was wary of getting burned. Administrators who don’t take seriously their students’ flights of fancy run the risk of missing out on substantial rewards.

Consider the case of Andrew Perlman. In 1994, during his freshman year at Washington University in St. Louis, Mr. Perlman and a fellow student met with the school’s provost and executive vice president to discuss a business they hoped to form together with the university. “We wanted to make them equity partners,” recalls Mr. Perlman, now 24. “They said, ‘I’m sorry, we don’t do business with students.’”

Rebuffed, the students left school and soon enrolled as part-time students at Boston University. There they approached John Westling, then the university provost. “He said he would love to help us,” says Mr. Perlman. “He said the university would be interested in investing.”

The students’ idea developed into Cignal Global Communications Inc., a private Internet services and data provider in Cambridge, Mass., with an estimated value of $1 billion. And though Boston University ended up not partnering with the students, Mr. Perlman remains indebted to Mr. Westling, now the university president. And so, he says, he plans on making “a significant contribution” to the school in the next few years.

People at the Georgia Institute of Technology’s College of Computing in Atlanta know just how significant a donation from a twentysomething can be. In March, Christopher Klaus, 26, donated $15 million to the college. Mr. Klaus attended the school briefly before dropping out to found Internet Security Systems Inc., an electronic-security management company in Atlanta.

Venture-Capital Backing

Venture capitalists are also recognizing student-entrepreneurs. In March, James Marcus co-founded UniversityAngels.com (www.universityangels.com), an angel-investor network based in New York. Mr. Marcus says that roughly a quarter of the businesses his company has paired investors with are run by students.

Mr. Berkett is certain he’ll find investors on his own. Fresh off his meeting with Mr. Rupp, he tells two friends that he has already spoken to an angel investor in Hong Kong and has plans to meet with several venture capitalists in New York. “When you’re talking to that VC,” advises one friend, Christopher Tse, “have the card in your hand.”

Mr. Berkett is sitting in the business-school cafeteria with Mr. Tse and Nicolas Perkin. His class doesn’t start for two hours, but the normally frenetic Mr. Berkett is relaxed. For him, this is heaven: a place where business graduate students mill about beneath television sets forever tuned to CNBC, a financial-news station.

It is also a place where Mr. Berkett learns a great deal. Mr. Tse, 24, is working at his fourth start-up. Mr. Perkin, 28, is a part-time business student and also a veteran of four start-ups.

The conversation turns to the dangers of creating a credit card for children. “For some reason,” says Mr. Perkin, fingering his cell phone, “I have this huge liability red flash going on in my head.” He passes on the name of a law firm, and Mr. Tse warns of exorbitant attorney fees. “Paying $6,000 is just too much,” he says.

The young men discuss everything from retainers to insurance to cellular phones to assembling a staff. Mr. Berkett says that he would like to farm out all of the positions in the company beginning with CEO. Both Mssrs. Tse and Perkin laud the decision but neither dares raise his hand.

Suddenly, Mr. Berkett leaps up. “Professor Low!” he calls.

Murray Low, the director of the entrepreneurship program at the business school, turns to see Mr. Berkett. He recognizes him, remembering when the freshman approached him after a lecture. “This is an aspiring entrepreneur,” he says.

Mr. Berkett is delighted to be recognized. Mr. Low isn’t as pleased by the encounter. “I think you have a chance to go to college once,” he tells the eager young man. As for Mr. Berkett’s business plan, he adds, “the chance of a lifetime comes around once a week.”

Today when his first-year students get the same assignment, some tackle the project by starting businesses — surprisingly sophisticated ones. One 20-year-old is pursuing an online die-making business. Another is cutting deals to sell advertising space in public restrooms.

“These are mostly freshmen!” exclaims Mr. Atkin, a longtime lecturer at the University of Pittsburgh’s Katz School of Business. “There is a tremendous belief that they can do this that I didn’t see 10 years ago.”

Such down-to-the-marrow confidence has always been a defining characteristic of the young. But at this historic moment, it seems, that aplomb is based on more than the arrogance of youth. Against the backdrop of a booming economy, capital aplenty and the wide open frontiers of technology, a new generation of entrepreneurs are utterly prepared to amass their fortunes under their own steam. Guided by their own rules, they are, along the way, changing the way America does business.

Some of the young entrepreneurs are fleeing corporate life; others have never so much as set foot in a Fortune 500 cubicle. But even amid the wild stock-market swings of late, nearly all recognize that they are in the perfect time and place in economic history to chart their own course.

“Our parents were upset if they didn’t work for the same company their whole lives,” says Dan Nevers, a 30-year-old from Winchester, Mass., who is attempting to launch an Internet start-up selling a line of toys. “Now it’s like, ‘Thank God I don’t have to work for the same corporation my whole life!’”

The New Carnegies

Certainly every era spawns its self-made business titans. Some historians see echoes today of the advent of the railroads and the “Go west, young man” era that gave rise to the Carnegies, Rockefellers and Morgans.

“There’s that same sense of boundless opportunity, that anyone can go out and make a fortune,” says Ria David, a Pittsburgh business historian.

Other periods have been marked by the influence of the young. The 1920s flappers threw off the restrictions of Victorian mores. The 1960s “youthquake” rocked politics and the arts.

But, many historians agree, the past decade or so presented a confluence of events perfectly calibrated for a vast number of young entrepreneurs to strike it very, very rich.

Indeed, something shocking happened when tech-savvy Generations X and Y launched their businesses into the waiting embrace of the 1990s economic boom.

“Technology, particularly the Internet, has changed everything,” says Andrew Zacharakis, professor of entrepreneurship at Babson College in Wellesley, Mass., known for its strong entrepreneur program.

Twentysomethings across America haven’t just been exposed to technology; they’ve wielded it and shaped it their whole lives — writing code for their computers, mastering games, conducting their social lives on the Internet.

Young entrepreneurs are making a profound stamp on the culture of business, even on buttoned-down Corporate America. They’ve lowered the dress code and raised the expectations for fun — and hours — on the job. They’ve increased the speed of business (it’s no coincidence that coffee is their beverage of choice) and embraced risk more tightly than ever as a signal that the potential payoff is great.

Happy Days

Dave Nelson keeps his young tech employees happy at CoManage Corp., a start-up in Wexford, Pa., by encouraging them to wander around barefoot, drinking the company-provided Starbucks coffee and Frappuccino. He also provides them with Nerf rocket launchers and the company’s beloved Mystery Castle pinball machine to give them breaks from their work on high-tech communications software. “I’m the old guy at 39,” Mr. Nelson says.

It was only a decade or so ago that freshly minted M.B.A.s would go striding off to Goldman Sachs, McKinsey or Procter & Gamble, suits pressed and obsessed with market share. Today’s college graduates are coming of age at a time when cynicism about corporate life couldn’t be higher. Dilbert reigns. Even a starched Old Economy behemoth such as Procter & Gamble has adopted casual dress, apparently in hopes that it will spark some youthful creativity.

These days it’s instinct and fooling around that spark new technological applications — not plodding market studies groping at the unknown. Look at 19-year-old Jacqueline Thorpy, from Scarsdale, N.Y., who helped her father write software code when he was starting his own software company. At 14, she started her own Web site where friends could register their brand preferences on teen clothes and other products. Soon, the site, Teenfx.com (www.teenfx.com), was the No. 1 site for teenagers using the Lycos and Alta Vista Web portals, polling visitors and posting their comments on everything from braces and bath products to movies and sexual preferences. With plans to earn a profit through banner advertising and e-commerce links to other sites, Ms. Thorpy says her Web site is on its second round of financing, and she’s interviewing potential chief executives.

“It was a hobby,” she shrugs. “It was fun with my friends.”

Business-school instructors certainly recognize the upheaval, and have adjusted accordingly. “Traditionally, we used to tell students that they should go out and build their experiences and learn on someone else’s dime” before starting their own businesses, says Dr. Zacharakis of Babson. No more. Now Babson, like many colleges, has an in-house incubator to help students get started in business before they even get their degrees. There’s no reason to delay a start-up because of a lack of experience, he says, and every reason to jump in fast before a competitor stakes out the turf.

Students Take Charge

At a recent informal gathering at Pittsburgh’s Carnegie Mellon University, nine students of its Graduate School of Industrial Administration met in a conference room and kicked around some thoughts about their businesses already under way.

Their confidence is the stuff of self-fulfilling prophecies.

The group displays a knack for coldly eyeing old-style industries and envisioning a transformation through technology. Michael O’Connor, 28, is starting an online portal for trucking companies.

“It’s not glamorous,” he says, but it beats his previous stint at a joint venture of General Electric Co. and Hitachi Ltd. designing industrial products. “I was off in my corner. It was boring.”

Yong Kim and Chang Oh are launching a business called airFreightCentral.com that auctions air-cargo space. Don Herzog is starting PowerNetworks.Net, an online marketplace for outsourcing power-engineering contracts.

Other students have decidedly less gritty nuts-and-bolts business ideas, but they bring the energy and, well, lack of dignity that has been the hallmark of many a young entrepreneur. Mr. Nevers is planning a blitzkrieg invasion of the New York toy show in June. He can’t afford the several-thousand-dollar cost of a booth, but will rent a hotel room, stuff fliers under doors, and parade outside the trade-show floor with his laptop to give presentations about his own line of character toys, akin to Beanie Babies, to anyone who will listen. Why not? “There’s no longer a black mark to try to start a business and fail,” he says.

To many, the challenge of the New Economy endows business with an irresistible calling, an air of romance and bravado. “You are making stuff happen, and it’s invigorating,” says James Walker, a 30-year-old who spent time at a telecommunications company in Sweden, and is now involved in two tech start-ups — one a dot-com and the other involving wireless communications — while finishing his degree at Carnegie Mellon.

At the time of the group meeting, one of Mr. Walker’s companies was just 10 days old, but already had secured a lawyer, “and three hours ago we cleared some short-term financing,” he tells the group, based on “a bunch of bullet points on a piece of paper.” He adds, “It has to happen quick” in the hypercompetitive wireless-Internet-technology world. “There’s a revolution every year and a half now,” Mr. Walker says.

Interestingly, though the gathering preceded the recent Nasdaq slide, most seemed to anticipate a shakeout of the sky-high valuations for start-ups gone public. “There are a lot of businesses that are overvalued now,” says Mr. O’Connor, who adds that even if a new business doesn’t achieve those excessive levels, “it can still be very profitable.” And the prospect of less than a stratospheric payoff doesn’t make the alternative — corporate life — any more appealing. “What’s going to be safe?” asks Elena Kholodenko, who is part of an Internet start-up that provides night-life guides. “There aren’t safe choices. You just have to do it now.”

Capital Games

Raising capital as a young entrepreneur was once an exercise in humble supplication before bankers. Now, a typical twentysomething with a technology-business plan can choose among competing equity partners swimming in capital. San Francisco-based VentureOne Corp., which tracks venture-capital investment, says companies raised some $36.5 billion in venture capital last year. And a Babson study found $55 billion in so-called angel capital, seed money from small, independent sources such as individuals. Today there are special venture-capital funds for women, for African-Americans, for Hispanics. Banks are starting equity funds.

We are already well past the point in the cycle at which young entrepreneurs cash out of their first start-ups and take on the role of venture capitalists themselves. Consider Tony Hsieh, 26, and Alfred Lin, 27, who sold LinkExchange, which let Web sites swap banner advertising under a barter system, to Microsoft Corp. for $265 million in 1998. Now they preside over that sum as venture capitalists in an operation called Venture Frogs, based in San Francisco.

Heroes of the young entrepreneurs today include Jeff Bezos, Michael Dell and Steve Case — high-tech builders who have amassed wealth and empires unimaginable only a decade or two ago, all while relatively young.

“Role models have been driving this explosion in young entrepreneurs,” says Dr. Zacharakis of Babson. When the 37-year-old professor was growing up, he read about sports heroes. That was before Bill Gates and Steve Jobs attained star status. The prestige and perks enjoyed by the new business idols don’t “make being the starting quarterback of the New England Patriots that appealing as a dream,” Dr. Zacharakis says. Nor is the public sector exactly inundated with heroic figures these days.

Increasingly, even those who want to change the world with youthful idealism see business as the best tool for such work.

Tracey Pettengill is a co-founder of a San Francisco-based “e-marketplace” called 4charity.com (www.4charity.com), where visitors can shop and contribute to charity, and where nonprofits can learn about putting the Internet’s power to work. Ms. Pettengill, who holds an M.B.A. from Stanford University, says she spent significant time at refugee camps in Somalia in 1992 and in Sudan in 1994. And she came away thinking about ways in which business skills could be applied to nonprofits, yielding huge payoffs for those in need.

“Think of a refugee camp,” she says. “The logistics of distributing food, water and medical supplies — it’s a business problem. “She wants her business to grow fast to help people like those refugees. She feels the time pressure another way, as well.

“I’ll be 29 soon, but you can still say I’m 28,” laughs Ms. Pettengill. “Twenty-nine is old to be an Internet CEO.”

“Planning is the key to success in e-commerce, that is definitely what I would stress,” says David Albert, president of Publishing Dynamics, a Web-services consulting firm in Chicago. “Any business owner needs to do a cost-benefit analysis before starting an e-commerce venture.”

Mr. Albert, who oversaw Web development for Cahners Business Information (now Reed Business Information) before starting his firm in 1999, recommends that entrepreneurs work with a reputable consultant to identify the best approach.

Each business is different, but every business owner needs to plan his or her online sales channel the same way as any new venture, he says. Factors to consider include:

• Projected sales;
• Inventory required;
• The number of employees needed; and
• The expected rate of returns of the products.

Numerous technical options are available for e-commerce, Mr. Albert says. They include “storefronts” built by hosting providers and off-the-shelf solutions from such companies as Yahoo Inc. Basic storefronts can cost as little as a few hundred dollars a year plus transaction charges levied by credit-card processors of between 2.2% and 2.9%. If you’re considering a prepackaged solution, says Mr. Albert, make sure it has the capacity to support your business and is scalable to match future growth.

If you’re inclined to opt for an off-the-shelf online store, try buying an item or two from another client’s site first. If your shopping experience isn’t a good one, Mr. Albert says, “you might want to look somewhere else.”

Ryan Thompson, president of Arial Media, a Web-development company in Addington, Texas, says that for growing businesses, custom-built systems represent a better long-term solution, and are relatively inexpensive because if planned well, they don’t need to be redesigned later to accommodate growth. “People assume that they have to spend hundreds of thousands of dollars for their e-commerce solution. But you can scale up your system [without spending more money] if you design it correctly from the outset,” Mr. Thompson says.

Another factor that will influence your plans is whether you’re selling to consumers or to other businesses. For example, Wrenchead Inc. of White Plains, N.Y., is a business-to-business seller of automotive electronic parts. Much of the work on its e-commerce site involved getting the different computers at other companies to talk to one another, says Paul DeSantis, who was its executive director of e-commerce when the site was built in 2000.

Additionally, entrepreneurs should think about their prospects for growth and plan accordingly, says Mr. DeSantis, who is now a consultant in Howell, N.J. Start-ups can expand to the point where it’s advantageous to interact electronically with a supplier or distributor.

“Sure, if you are a mom-and-pop shop, there are plenty of off-the-shelf, plain-vanilla solutions [for a store] that you can use,” Mr. DeSantis says. He cites VeriSign Inc. and BEA Tuxedo as two well-regarded vendors of online stores. “But if you are in the business-to-business space, machines have to talk to one another, and then you’re into another level of coding.”

For Do-It-Yourselfers

The technically savvy entrepreneur has still more options. Aaron Hazelton, a self-taught 24-year-old programmer in Sylva, N.C., relied on a packaged solution when he launched FixtureFactor.com, which sells faucets, claw-foot bathtubs and other plumbing-related wares. (He learned the retail bathroom-and-kitchen remodeling business from his father.) He downloaded so-called open-source software free of charge from the Web and then customized it. He concedes that his approach to building an online store “might be a little unusual.”

His advice to entrepreneurs? Make sure you also can track and fill orders. “That’s just as important as the front end the customer sees,” Mr. Hazelton says. Plus, don’t forget about offline customer service, he adds. FixtureFactor.com employs four people. “When people call us, a real person answers the phone. Our customers love it. An awful lot of people call just because they like to talk to somebody.”

The Big Picture

Bear in mind, too, that technology is only a part of the e-commerce equation. Robert T. Plant, author of “eCommerce: Formulation of a Strategy,” (Prentice Hall, 2000), believes it isn’t even the biggest part.

“E-commerce is fundamentally a business problem, not a technology issue,” he says. “You can buy the technology. If you don’t understand the process, or understand what you want to do, then you won’t be successful.”

Mr. Plant teaches information-technology strategy to master’s of business administration candidates at the University of Miami. During a sabbatical in 1997 and 1998, he interviewed executives at large companies about their e-commerce initiatives. He says new entrepreneurs can learn from their experiences.

“It starts with the customer: What is the value proposition that you’re offering? Why would somebody want to buy what you are selling?” he says. As a first step, he suggests, would-be entrepreneurs should make sure their ideas pass the “friends” test. “If they laugh at what you’ve got in mind, OK, but if they like it, they’ll give you good ideas,” he says.

Will Customers Find You?

Don’t make the mistake of assuming that because you’re successful offline, you’ll automatically be successful on the Web. “It’s not as bad as a few years ago, but even today people assume that if they open a storefront on the Web, people will come,” says Mr. Thompson. “But it’s not like being on a busy street. You’ve got to invest in making sure your site is found. I’m a big believer in pay-for-performance marketing.” He recommends using paid-search-engine-listing company Overture Services Inc. or Google’s AdWords program, which sells text-based ads that pop up on its site when a user searches for a related word.

“The Internet is the first medium that allows you to intercept interest in a topic,” says Fredrick Marckini, president of iProspect, a search-engine positioning firm in Arlington, Mass. Mr. Marckini wrote “Achieving Top 10 Rankings in Search Engine Positioning” (Direct Response Inc., 1997), which is considered a seminal work on the topic of improving Web sites’ visibility on search engines.

“You’ve got to be where people are looking,” he says. “When I was an entrepreneur, I measured success by the number of times I reached out and spoke to someone during the day.” E-commerce entrepreneurs should approach the Web in the same fashion. “If people don’t find your Web site, it doesn’t matter how good it or the product is,” he says.

Every day a boisterous online populace debates the subject in countless e-mail lists, Web sites and discussion groups. The most stirring questions all touch on efforts to exploit the commercial potential of the global network, a movement unabated by the dot-com collapse of three years ago. Among those questions:

Will security problems, ever more intrusive advertising and efforts to tax online activities result in technical and commercial ruin for the Internet? Will innovation be stifled by battles over intellectual property? When will vast repositories of human knowledge in the form of books and other media go online in a serious way? How will technology help users navigate all that information? What will today’s leading Internet companies look like tomorrow?

There are no simple answers, but it’s clear that corporations and individuals alike will define what comes next.

1. How Safe Is Safe?

Computer security experts know that the Big One is coming.

Though most hacker attacks so far have been only annoying, the recent attack on the Web site of SCO Group Inc. by thousands of computers infected with the Mydoom virus gave a hint of more serious damage to come. The CERT Coordination Center at Carnegie Mellon University reported 137,592 computer security incidents last year — more than six times the total reported in 2000.

Security experts warn that once an intruder gains access to a computer, he or she has nearly full control, including the ability to wipe clean a hard drive, implant an eavesdropping program or even shut down a power plant.

“People are choosing low-destructive payloads,” says Dan Farmer, chief technology officer of Elemental Security Inc. a security-software company in San Mateo, Calif. “It’s just a matter of time before one of these causes some serious devastation.”

Many companies remain lax about installing available patches for software security holes. Passwords and other identity-management systems remain vulnerable. The proliferation of wireless connections and notebook computers has extended network boundaries, making them tougher to police. Even well-written software code has an average of one bug for every 1,000 lines, each a potential security gap, and some popular operating systems have tens of millions of lines.

But the tide may be turning. Fear of terrorism — and the prospect of additional regulation — has increased attention to such vulnerabilities, meaning organizations like Pittsburgh-based CERT distribute security alerts more quickly, software companies test more rigorously and companies and government agencies are more likely to install backup systems.

“Even though we have greater reliance on the technology, we have greater resiliency,” says Howard Schmidt, former deputy to the government’s cybersecurity czar and now chief information security officer for eBay Inc.

2. It Begins With the Search

It’s impossible to overstate the importance of search: It’s the second most popular activity on the Internet, after only e-mail.

Although searching for information on the Internet has always been hot, more companies and consumers are recognizing the vital role it plays as a starting point for all kinds of online activities, especially e-commerce. Companies that specialize in search have seen strong growth over the past year, fueled by an increase in the number of users and, in many cases, advertisers looking to tap the hordes of users visiting those search destinations. Keyword search advertising jumped to 31% of all Internet ad revenue in last year’s second quarter, up from 9% in the year-earlier period, said a Pricewaterhouse Coopers LLP study for the Interactive Advertising Bureau, a New York trade association. Keyword search ads are the text ads that show up on a search-results page when computer users search for certain keywords.

Various machinations in the search industry also demonstrate the priority that companies are placing on the area. Google Inc., the Web-search company in Mountain View, Calif., which now ranks ahead of Yahoo Inc. as the leading search destination. Yahoo itself, in Sunnyvale, Calif., acquired search-related technology company Inktomi Corp. and Overture Services Inc., a search-related ad provider, last year. Meanwhile, software titan Microsoft Corp. and Web retailer Amazon.com Inc. are developing search technologies, too.

This year should see more personalized searches, as well as searches focused on local information. Yahoo wants to be able to better determine, for example, exactly what its users want when they enter the keyword “plumbers.” Most likely they want phone numbers of plumbers in their area. But while some Yahoo users give their ZIP Codes when they register as users, right now the company can’t always tell what area they live in.

3. More Regulation — but How Much More?

Regulation of the Internet continues to be a contentious issue, as state and federal officials wrangle over taxation, junk e-mail and privacy.

Concerned about hampering the growth of Internet and online business transactions, Congress imposed a moratorium on state and local taxes for e-commerce in 1992, only to expand those restrictions in 1998 to include a ban on Internet access taxes. State and local municipalities have been fighting federal legislators recently to impose taxes on Internet access service. And no wonder: Market-research firm Forrester Research of Cambridge, Mass., now predicts local governments in the U.S. will be missing out on $11 billion in potential Internet access tax revenue this year.

A similar standoff exists over the regulation of online privacy and spam, or unsolicited commercial e-mail. Thirty-seven states have passed laws regulating spam, but those laws were pre-empted by a congressional bill regulating e-mail that was signed by President Bush in December and took effect Jan. 1. Some consumer advocacy groups, state legislators and regulators are piping mad. In fact, eight state attorneys general have derided the congressional bill as being weaker than existing state laws for protecting consumers and businesses.

4. That’s Entertainment, Maybe

Entertainment, the most popular form of content for television, radio, movies and publishing, has yet to become a big revenue producer online.

Blame slow dial-up speeds, which hinder the delivery of high-quality video and sound; the complexity of the software and hardware required for online entertainment; pricey failures by many media companies attempting to create online products; and the less-than-intriguing quality of material now available.

But there are signs that things are changing. For starters, high-speed, or broadband, access by consumers is increasing globally, led by South Korea, Japan and other countries. According to a recent report by Leichtman Research Group Inc., Durham, N.H., the top cable providers in the U.S. have made broadband access available to 88% of their service areas, while DSL providers have extended availability to 70% of their markets. In addition, consumers are snapping up a plethora of new Web-related devices as well as improved existing ones, including higher-resolution computer screens, wireless hand-held devices, media-oriented computers that are easy to use, and software that’s getting better at working with different systems.

Now, attention is at last being focused on the content, which has largely remained a huge repository for information about or retreads of offline entertainment. There is new excitement, for instance, about “blogs” — Web sites by individuals who comment on and provide links to almost anything — advances in interactive gaming, and a push by big portals to provide specialized exclusive content. Many think that the kind of online entertainment consumers are likely to embrace will be interactive, more community-based and more controlled by consumers than by traditional content creators.

5. Free No More

After years of trying, more online content creators are figuring out how to make consumers pay.

Some important breakthroughs: RealOne, from RealNetworks Inc., which has become the biggest subscription service for audio and video on the Web largely because of sports offerings; iTunes, the online music service from Apple Computer Inc. that shook the recording industry into finally distributing music the way consumers wanted it; Time Warner Inc.’s decision to move much of its once-free magazine content “behind the wall” at America Online; and, most important, the recent spurt in growth of high-speed access, a necessary development for the delivery of images and sound to rival those of television and movies.

A few cautions are in order. The growth of pay audio and video services, for example, has slowed as big competitors like Microsoft’s MSN service are once again offering free material embedded with ads. The jury is still out on how much profit can be made from the low-margin online music retailing, except in its ability to goose the sales of more music players. Sheltering premium content, as in Time-Warner’s case, is also seen as a means to get consumers to stay with an online service rather than as an end in itself. And, there is still no record of “hits” online that people have been willing to pay a lot for.

Still, expect more experimentation in pricing and creativity as time goes on. Arenas to watch: gaming and social networking, where high-speed access will allow for more interaction; and portable devices that are more feature-rich and able to receive more varied content. Expect Asian countries such as Japan and South Korea, where consumers are more willing to pay for a range of content, to keep breaking ground in what interactive content will work and where.

6. Making Money With Blogs

Web logs, or blogs, have long been derided in some quarters as chatty and sometimes self-absorbed vanity projects. But a handful of Web-based writers have begun to turn their blogs into something resembling actual businesses.

Blogs vary greatly in content and quality, but for the most part they tend to be idiosyncratic, regularly updated collections of links to news stories and other Web sites, short essays or dialogues, and personal trivia. No one knows exactly how many blogs there are. Many are started as hobbies and abandoned after one or two postings. Those that last, however, can build up devoted followings.

Some of these writers are beginning to capitalize on their popularity. Many bloggers, for instance, install links to Amazon’s “Honor System” program. These allow a given blog’s readers to click through and make donations to the blogger using Seattle-based Amazon’s payment technology. It’s also possible for bloggers to recommend books via links to Amazon that kick back a percentage of the purchase price to the blogger.

Some bloggers have made surprisingly effective direct appeals to their readers. Andrew Sullivan, a free-lance writer and former editor of the New Republic who runs a popular conservative-leaning blog at www.andrewsullivan.com, says he raised $79,020 from 3,339 people in 2002 after a weeklong “pledge drive” on his site. The sum was enough to hire an intern, cover Mr. Sullivan’s bandwidth costs and pay himself a salary, and now he is fund-raising again.

In October, free-lance reporter Joshua Micah Marshall asked his readers at talkingpointsmemo.com for contributions to help him report from New Hampshire on last month’s presidential primary. In less than 24 hours, he wrote on his site, he raised almost $5,000 and had to ask readers to stop contributing.

7. Offline Content Moves Online

It’s easy, in this age of Googling, to think that all information worth digesting is merely a mouse click away on your favorite search engine — a viewpoint the technologist Brewster Kahle sums up as, “If it’s not on the Web, it doesn’t exist.”

While periodicals, music and feature movies are gradually reaching the Web, much of humanity’s creative output has remained doggedly offline, including everything from books to old radio shows.

“The problem is, the best we have to offer is not available on the Web,” says Mr. Kahle, the founder of the nonprofit Internet Archive in San Francisco. “Will it be? I think the answer is yes.”

Indeed, thanks to the efforts of Mr. Kahle and others, there’s a growing movement to expand the scope of information available on the Net to encompass what is normally stuck on the shelves of libraries and storerooms. The Internet Archive, for one, is building a digital library that provides free computer storage and Internet access for any historical collections now available in digital format. The site allows searching of about 20,000 books, a number that could jump to one million in a few years as major book-scanning projects in India and elsewhere accelerate. The Internet Archive also has about 3,000 moving images, including cigarette commercials and Cold War survival-instruction films.

Copyrights limit what content can be put on the Internet, which explains why the Internet Archive and other sites are concentrating mostly on works in the public domain, such as Shakespeare. But some for-profit ventures are trying to fill in the gaps: Amazon, for instance, recently introduced a feature that lets users freely search the complete text of more than 120,000 books, including many still under copyright. Google also recently began letting its users search through excerpts of books.

8. An Intrusive Word From Our Sponsor

Internet users have complained increasingly about the clutter, most of which comes from online advertising.

Internet ads have become more intrusive as advertisers and technology companies — striving to be more creative, more targeted, and more effective — essentially move beyond banner and pop-up ads, long the “work-horse” ad formats of the Web. Many consumers express alarm at the widespread adoption of so-called rich media ads, which cause animated objects to move across one’s computer screen; “pop-under” ads, which can be found on the screen after files are closed; ads that mask “spyware,” or programs that surreptitiously monitor one’s actions on the computer; and junk e-mail, or “spam.”

Though most consumers haven’t taken action against these more intrusive ads, at least 28% say they’ve stopped going to a specific Web site to avoid ads, according to Forrester Research. And 15% have downloaded ad-blocking software, up from just 1% in 2001, Forrester says.

9. When Business Models Collide

When the Internet’s biggest companies first opened for business, it was easy to label eBay an auction company, Amazon an online retailer, Yahoo a Web portal and Google a search engine.

Now the Internet’s most powerful players are increasingly stepping on each others’ toes, making the old distinctions less meaningful. There’s a good reason for the convergence: It has become clear that some of the biggest profits flow to companies that help users find and buy things, instead of companies that actually store the things in warehouses.

Consider eBay’s success: The San Jose, Calif., company doesn’t hold a stick of inventory but runs a virtual marketplace for buying and selling almost anything. It has long been one of the most profitable companies on the Net. But while eBay dominates what was once defined as the Internet auction market, it faces growing competition from sites trying to connect buyers with sellers.

Google makes most of its money doing just that — presenting links, paid for by advertisers, to commerce sites as its users are conducting online searches. And Amazon now rarely expands its selection of products by actually warehousing goods; it cuts deals with other merchants to sell through the Amazon site.

10. An Internet Protocol Battleground

Tech battles on the Internet are increasingly fought with weapons — patents — that cause unintended casualties.

The dangers were shown by a $521 million verdict won against Microsoft last August by tiny Chicago-area based Eolas Technologies Inc. and the University of California. A U.S. district court jury in the Northern District of Illinois said Microsoft violated a 1998 patent that covers how Web browsers work with separate programs. Luckily for Microsoft, it has $52.8 billion in the bank and managed to convince the court to stay an injunction pending an appeal by the company.

But bystanders may not be so lucky. If Microsoft changes Internet Explorer, as it could be forced to do, thousands of people who make Web sites may have to modify them to work properly with the revised browser, says Tim Berners-Lee, a founder of the Web and director of the World Wide Web Consortium, a group that works on protocols to increase the interoperability of the Web.

Businesses are aggressively using patents to protect not only software but ways of doing business, such as the “name-your-own-price” system pioneered by Priceline.com Inc. While protecting inventors against deliberate theft, such patents can also deter innovation by raising risks of accidental infringement — particularly in fields like Internet software that rely on many technology components working together. No entrepreneur can be assured of uncovering all of the patent landmines.

Short of changing patent laws — which isn’t likely anytime soon — businesses must gird themselves for battle and prod courts and government agencies to apply existing rules more rigorously. The U.S. Patent and Trademark Office, in response to an appeal by Mr. Berners-Lee and others, stated that there are questions about the validity of the Eolas patent and could cancel it.

Literally five minutes after there were reports that a plane had hit the Pentagon, “the phones no longer responded once the calls were 20 times our normal volume,” says Egervary, noting that in an average year, consumers purchase about 2 million house flags. On this one day, 25 to 30 million people wanted house flags instantly.

At Annin & Co.’s main offices in Roseland, New Jersey, about 25 miles from where the Twin Towers used to stand, “we noticed the increase right away,” says Randy Beard, the company’s vice president of corporate sales. “That day, a lot of employees left. We did have management get together and strategize how we were going to handle [the demand], but we were more concerned about people we knew in New York. It was very scary.”

“We were shocked and devastated about the tragedy, but as the shock wore off and noncustomers were calling with orders for a million flags, we knew the country was going to rally around the flag like they did during the Persian Gulf War,” explains Beard.

Meeting the Demand

The flag industry’s busy season is typically April through July. So by the time September comes around, nothing is on the shelves and seasonal workers are elsewhere.

“The entire industry scrambled to meet demand,” says Egervary. Both Valley Forge and Annin streamlined the manufacturing process and hired temp workers.

“Core consumer flag users in the US have always been tied to a single event that gave them the emotional connection to the flag, like fighting in World War II,” explains Beard. “But overnight, everyone at once felt that connection. We focused on the 3-by-5-foot flags for many months; everyone was looking for them.”

Valley Forge took the same approach. “When you reduce the number of items you produce, you produce more efficiently,” says Egervary. “You had to see through the fog and tears and see what was happening. Customers would buy anything they could get their hands on. Not having experience with that was difficult for everyone in the company.”

“I’m most proud of being able to impose order on a chaotic situation,” Egervary continues. “It wasn’t a matter of making more money, because we didn’t raise the prices. That wouldn’t have been right and Americans wouldn’t have stood for it. Sales went up, and so did [our] costs because we had to hire temps.”

Annin hired 100 temps for its Ohio factory alone, some of whom are now permanent employees. Unlike during the Persian Gulf War, when the demand for flags lasted about a month, consumers’ request for flags just started to plateau in mid-July. Annin plans to keep its temp workers until things quiet down, and Valley Forge intends to employ its temporary workforce through the next season.

Patriotic Workers

The bittersweet surge in business brought new meaning to many employees’ jobs. “We have a number of different nationalities in the production area,” says Beard. “They’re all Americans and proud to be making the American flag. They worked as a team.”

Egervary explains how for some, manufacturing the American flag has helped them through the experience: “Not everyone could go to Ground Zero. Every worker here, from the oldest [who had worked with the company since the bombing of Pearl Harbor] to the newest [a temp worker hired to help with the extra work] employee, saw the job as a way to do something personally.”