Modern-Day Tech Startups Tread Carefully

Landy Ung and her boyfriend Wan Hsi Yuan work on their startup company out of their studio apartment on Oct. 30, 2007 in New York. (AP Photo/Mark Lennihan) (Mark Lennihan - AP)

There's a lot to keep her up nights.

Like the Internet bubble, startups are clumping in a few areas and wireless services is one. Some companies do text coupons exclusively, such as San Jose-based Cellfire.com, which has venture funding and national advertisers such as Hardee's. Others send coupons as an add-on to other services, such as GoMobo.com, which lets users order coffee or meals by text message.

Mobile coupons "could work if done in association with a service the user opted in for, but as a stand-alone service, it has many challenges," said Jed Katz, managing director at DJF Gotham Ventures.

Ung and Yuan have put $30,000 into the business. They figure they have enough money to last a year, but they're hoping to get venture funding by March. According to their projections, 8coupons should be profitable by the first quarter of 2010, but one lesson of the Internet bubble is that profitability projections often prove overly optimistic.

To expand, Ung would love to find a business development person, another programmer and a traditional media partner whose ad sales force can bundle 8coupons.com text-message coupons into its ad sales.

She did get a lead on a programmer at the camp, which was held not at a ritzy hotel or a swank downtown loft, a la Web. 1.0, but at low-budget conference center in a Masonic Lodge. The food was served from plastic takeout containers and the coffee was cheap. Reps from sponsor Sun Microsystems Inc., which itself imploded during the dot-com bubble, were there to talk about how Sun could support startups (with advice, not cash) and what it wanted from them: Customers. Sun sent two speakers, both from its marketing department.

Scott Medintz, the editor of a planned magazine about startups, surveyed a crowd split between khakis and T-shirts, and said, "It's a lot more bootstrappy now."

That suits Ung and Yuan perfectly.

At home, they sleep in a queen bed and their workspace/living area is roughly the size of a king bed. They have Internet-only cable; their flat-screen TV shows their Web site, and Yuan works from the couch on an arrangement of pillows they call "his shrine," typing braces on both wrists, a serving tray with a wireless keyboard on a pillow on his lap.

When Yuan was 16, his mother sent him from Taiwan to live with an aunt in Athens, Ga. "There were no Asian people there!" he said. He knew no English, but he learned it and went on to get a master's degree in information systems from the University of Maryland at Baltimore County.

Asked if the risks of starting a company make Ung nervous, she answers, "My parents came to this country from Cambodia when they were 40 with three kids, no money and no English. What's the worst that can happen?"

While working at American Express Co. in New York, Ung started thinking about starting a neighborhood Web site. One day, coming home from work and bombarded by people handing out flyers and coupons, she thought, "Why not take all this and put it online?"