E-auctions were one of the big disappointments of the dotcom boom. But the three companies profiled here demonstrate growing confidence in the re-emergence of the electronic marketplace.

MeetingZone has set itself to support online trading with services and training, pitching its conference call services to corporate and home users.

It believes that a careful business strategy and ease-of-use is why it will succeed where others have failed.

Our smallest Acorn yet is an Olympic Games memorabilia website, created and supported by Mike Pagomenos.

It has proved so successful that he is considering expanding the service to other areas, such as tennis.

Coubertin.com believes that having a clear niche and a strong sense of the customer will be the recipe for success.

At the other end of the e-auction scale are big businesses looking for easy savings. E-auctions have the potential to reset the balance of forces in the market, weighing it in favour of the buyer.

E-Three works for buyers and sellers to make sure that both sides can win.

It is clear from the demise of so many dotcoms that there is a world of pain for those who err over their business models and technology choices.

E-Three's co-founder James Anthony believes it is better to not shrink away from telling the customer where the pain is.

Experience is also key to success. Over the years, many Acorn founders have made a network of business contacts with the larger corporations with which they once competed.

It is the vital experience that can be brought to their businesses now that will prevent a repeat of the emarketplace failures of previous years.

Each is, or soon will be, in the black - another good reason to hear their stories.

E-THREE
The key to e-auctions is to ensure a win-win for both sellers and buyers, but it's not an easy balance to pull off.

Sellers may feel that online auctions depress their margins and allow large corporate buyers to drive down prices, while bumping up the conditions they need to fulfil.

It is a serious danger that was recognised by the co-founders of an Acorn aimed at helping both sellers and buyers.

Jenny Draper and James Anthony set up e-Three in November 2002, blending Draper's operational skills with Anthony's strategic skills.

With two other full-time employees, e-Three offers training and services in the growing market for e-auctions.

Buyers have taken well to the technology: it has helped them cut prices by 15 per cent. It is not surprising then that the use of e-auctions is growing at 75 per cent a year.

But buyers, unless they are careful, will kill off the re-emerging market. Buyers are making life a misery for sellers, sometimes by using unethical practices.

Unusually for an e-auction services company, e-Three offers services for both sides: without informed sellers, the e-auction market will stall. Sales teams will increasingly be exposed to e-auctions and they need to know how they can strike the right bargain.

"E-auctions are a tool to collect information on quality and services as well as price," said Anthony.

E-Three links its work for sellers and buyers with a code of ethics, Integrity Code for E-auctions, launched in November.

Anthony and Draper have split their services for buyers and sellers into three layers. The first is a £600-a-day training session separately run for sellers and buyers.

The second is a £5,000 to £8,000 e-auction preparation event lasting three days.

The third layer is a full service to enable the buyer or seller to become an e-auction-enabled enterprise, hence the name of the company, e-Three.

First year trading will generate a turnover of about £250,000, says Anthony. The second year target is £1.5m.

The founders have used their own funds to start the company. "We are not in a hurry to dilute our shareholding," said Anthony.

Anthony and Draper have already been approached to set up e-Three in the US. They plan to sign a service deal with US affiliates early in 2004 and will also expand into continental Europe.

Within a year they expect to have 10 full-time employees to supplement the affiliates they currently use.

E-auctions can be run successfully for the sale and purchase of items from £5,000 to £500m, they say. Both sellers and buyers can benefit by slashing the buying-cycle time by 50 per cent.

Sellers can gain an advantage by using e-Three's services to emphasise the quality and service of the product they are selling.

One e-Three client on the seller side - Office Angels, a temp agency - was able to retain three customers that it was in danger of losing, and at a reasonable price.

"It is difficult to establish the return on investment for e-Three services. But it can be thousands to one. Sellers are winning business at a higher price than before because of our services," said Anthony.

One problem e-Three faces is moving from the simple sale of a £600-a-day training course to the larger consulting services deals.

"We want to get embedded into clients in the long term to handle new staff coming in who need training and to help manage e-auctions," said Draper.

But to get embedded, e-Three must market to the right targets. "We ploughed about £12,000 into a direct marketing call centre campaign. We got two successes. It wasn't worth it. We have now switched marketing strategy," said Draper.

The majority of people did not like being cold-called on such a subject. E-Three will use advertising to create a higher profile.

Anthony and Draper are also working on a book outlining their approach which will be finished in early February. They could use an e-auction to find the best publisher.

COUBERTIN.COM
Coubertin.com is the smallest of the computing Acorns we have profiled so far. This Olympic memorabilia e-auction site will generate about $1,000 (£600) from commissions and advertising in 2003.

Mike Pagomenos, IT consultant behind coubertin.com, has developed the site and supports it in his spare time.

He began collecting in the early 1970s, first Greek and British stamps before his focus moved to Olympic Games stamps.

"It was pretty boring really," he said. So he branched out into Olympic memorabilia: medals, programmes, tickets, posters, torches and equipment.

The name of the site comes from the founder of the first International Olympic Committee in 1894, Le Baron Pierre de Coubertin.

"The idea came to me in late 1999 to build an online auction house," said Pagomenos.

"The existing services were expensive and sellers were not getting value for money. Seeing the success of eBay and others encouraged me.

"I spent two weeks researching possible products. I chose Auctioneer from Click Technologies. I spent $10,000 (£5,700) to buy a shrink-wrapped product.

"I did all the painful pioneering to get it to do what it said on the packet. If you've spent $10,000 and you're small, you can't ask for your money back.

"When you start you have to put a lot of trust in the software you buy. It is not like in a full-time job where you have pulling power and can get software products on test. When you're small you have to buy something and run with it."

Pagomenos finished and went live with the development in January 2000. Four years on he claims the site is the largest for Olympic collectors in the world.

It turns over more than $850,000 (£488,000) of listings by sellers each year. The site has about 718 regular members and more than 1,000 serious collectors worldwide, he says. A gold medal can be $4,000 (£2,300); torches are about $5,000 (£2,900), depending on the year.

The most popular years, he says, are Paris 1924 with its association with the film Chariots of Fire, and the early Athens games in the modern series in 1896.

Pagomenos estimates that he has put about £250,000 worth of his own time into the site, and he wants to develop more security and a credit card system.

"When I began, a credit card service was £250 a month; too much on such a small turnover," he said.

He expects his take from the site to rise to $3,500 (£2,000) in 2005, up from $1,800 (£1,000) in 2004. It will be boosted by higher volumes of business and the sale of posters and art prints.

Pagomenos is also planning a separate tennis memorabilia site. Sellers already have Wimbledon tennis memorabilia on the site, such as a ticket and programme from the 1930s at $220 (£126).

He aims for the site to be up in early 2004. "The tennis collectible hobby will become huge one day," he said.

MEETINGZONE
The founders of MeetingZone, Tim Duffy and Steve Gandy, were bored with the corporate lives they were leading. So, after getting together in a coffee shop in London, they came up with a plan for a conference-calling service based on internet technologies.

By May 2002, they had raised £2.1m of finance: a third from board members, a third from venture firm Springboard, and a third from 'high-value' individuals.

They put the technology together in eight weeks and MeetingZone went operational in September 2002. By March next year, they will be breaking even on a turnover of more than £1m a year.

Duffy and Gandy both have corporate experience, ranging from work at GEC, BT and PictureTel, which helped hone their startup skills.

The advantage they had over their longer-established competition was that, after 11 September, the big names were caught in a whirlwind of financial difficulties with the collapse of the telecoms market.

"They were milking the business and were focused on survival. We thought if we could create the best platform and the most ruthless business processes we could out-gun them from scratch," said Duffy.

New customers can be using the conference call services within 30 seconds of hitting the MeetingZone site, they claim. The average call links 4.5 people for 45 minutes at about £20.

Other services which supplement the audio, which accounts for 90 per cent of revenue, include web conferencing and a service called Glance where you can view another user's PC.

MeetingZone's technology is in three layers. The hardware is the bridging of telecoms switches, which link up to 400 people on the same call. The back end is an XML-based billing system. The front end is the website which handles presales to billing using Microsoft's .Net.

Billing is the key. "The largest customers don't trust the billing of their conference call suppliers. It's inaccurate and it's late. So we invested heavily in the billing system," said Gandy.

They bought the MetraNet package from MIT spin-off Metratech, which also lists MeetingZone's competitors, BT Conferencing and MCI.

As a result, MeetingZone turnover is growing at an average of 20 per cent each month in a market growing at 40 per cent a year. But it has some way to catch up with the established players: BT Conferencing alone captured £12m of new business in one quarter this year.

But this fast growth has allowed MeetingZone to grow to 13 people: seven in the office at Oxford and six in sales.

The focus for the sales efforts are IT directors, financial directors, office managers and personal assistants. Some customers use MeetingZone to brief the managers of their retail branches, others for investor-relations calls.

MeetingZone also sells its services in bulk, providing the conference call services for telcos such as Telstra.