A toast to beginnings
Both recent UND graduate and entrepreneur Tommy Leikas and members of UND's Dakota Venture Group are learning about business on the run. However, that doesn't mean they aren't getting any real work done. With a $20,000 investment from DVG and a p...
Both recent UND graduate and entrepreneur Tommy Leikas and members of UND's Dakota Venture Group are learning about business on the run.
However, that doesn't mean they aren't getting any real work done.
With a $20,000 investment from DVG and a personal contribution of $25,000, Leikas' newest business venture, a Web site called TheWineStandard.com, launched earlier this month.
For DVG, which is directed by four UND graduate students and one undergrad, it was the group's first investment in a start-up company. The group was created last fall with $200,000 in seed money from benefactors Bart and Lynn Holaday.
"It's really fulfilling to see your money being put to work. And also, it's fun to see how business comes to life, how a business plan becomes reality," said Lee Groeschl, an MBA student who serves as the group's president.
Leikas presented his business plan to DVG in early January. After about two weeks of negotiations, he had secured funding for what he hopes will lead to a career. "We felt very confident in Tommy and his ability to execute the business plan," Groeschl said.
Leikas graduated in December with a degree in entrepreneurship and wants to work for himself. It's a new direction for the former UND basketball player, who was named North Dakota's Mr. Basketball in high school. Leikas decided to give up his basketball career to develop his business.
TheWineStandard.com is essentially a one-stop shop for wine accessories. Leikas said he currently offers about 200 items online and hopes to grow his product line to more than 2,000 items. The site specializes in higher-end products such as wine openers, decanters and vacuum pumps. It does not, however, sell wine.
But Leikas' plans don't specifically revolve around wine. He is entering the world of Internet marketing and a process called search engine optimization, or SEO. He said he originally researched more than 100 different markets, but settled on wine accessories because the topic is frequently searched on Web sites such as Yahoo! and Google.
"It's such a big market," he said.
He is already looking at starting Web sites that sell other items, such as basketball hoops. The goal, he said, is to roll out Web site after Web site with each one catering to a specific niche market.
"A major strength of the Internet is its ability to amplify the power of niche marketing," Leikas said. "Niche sites allow marketers to define themselves as experts in specific fields."
And in those specific fields, business success is related to ranking on search engines. For Leikas, the goal is to get TheWineStandard.com on the first page of Google when people type in specific keywords -- an accomplishment he hopes will spark increased consumer traffic on his Web site.
"They don't find you unless you're on the first page of Google," he added.
In order to get there, Leikas is currently studying SEO principles and applying them to his business. SEO involves identifying specific keywords and phrases related to a Web site and finding a way to get the Web site a high ranking when those terms are used in an online search.
"There's a real science as far as how your site ranks," he said.
Leikas does have some experience in e-commerce. He operates another Web site that sells a downloadable e-book called "Best Man Secrets." The book offers etiquette tips and speech ideas to individuals who will serve as the best man in a wedding. Over the past year, Leikas has sold about 50 of the books for $24.99 each.
The site caters to a small market with limited potential, but it doesn't require a lot of day-to-day oversight. Leikas said the site is currently down because he'd like to switch it up and offer additional wedding-related products that offer advice to parents and women charged with serving as maid of honor.
"Once you get it to work, it's addictive," he added.
Leikas is following the footsteps of another UND graduate. Dan Thralow, CEO of Thralow Inc., operates a number of Internet specialty stores that generated more than $26 million last year. He began with one Web site, Binoculars.com, in 2001.
Members of the Dakota Venture Group also are looking to grow. Groeschl said the group currently has about $250,000 to invest in student ventures and regional growth companies.
With one deal under its belt, he said the group is currently reviewing business plans for other ventures, some of which he said look "extremely profitable." The initial investment in TheWineStandard.com is exciting, he said, because the group is stepping into some new territory.
"It was a learning experience. Each one of our group members learned an enormous amount about deal structuring," Groeschle said.
In addition to seeking investment opportunities, DVG is soliciting additional contributions of capital. The group will soon unveil a for-profit model that members hope could allow the fund to grow to more than $2 million.
DVG is one of a handful of college-based investment funds in the United States. More information about the group is available online at www.dakotaventuregroup.com .
Edison reports on business. Reach him at (701) 780-1107, (800) 477-6572, ext. 107; or email@example.com .