As founder of E*Trade, one of the Net's hottest companies, Bill Porter could be a role model for entrepreneurs hoping to make it big in e-commerce. His online investing service is a major US brand name and one of the few Internet companies that has made money.
Yet rather than acting as cheerleader to Web start-ups, he warns would-be billionaires: "I wouldn't want to be getting into the Internet business today. It takes only one to two people in a garage to establish a site. There are so many ideas, so many garages, so many companies to finance. . . Some will be winners, but most will not."
This may sound odd coming from a man who plans to launch his second Internet venture - the International Securities Exchange - in March. It will be the first fully electronic options exchange in the US, and the first new registered US securities exchange in 26 years.
Yet Porter knows that there is a big difference between him and new entrants. As the multi-millionaire creator of a major Internet success, he has clout and can get financial backing easily. He is also going after a new market in which he will encounter few online competitors.
"You have to go for the niche businesses now," he says. "I wouldn't want to try to put up a general auction site or a book seller today. The door has closed a bit."
Bill Porter also knows how important timing can be. He tried to build up a successful electronic trading business for a decade before E*Trade. After years of losses, he suddenly found himself with a rapidly expanding, profit-making venture.
There is fierce competition among new Internet start-ups and big bricks-and-mortar companies are joining in as well. "The major players are catching on; they are getting wiser and wiser about how to use the Internet, and that raises the cost of entry for others. It's all about market share and brand name," he says.