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June 2002
Who wants to be a millionaire?
Interview with Peter Atalla, founder of StudentNet

Peter Atalla

Peter Atalla, made and lost millions

In three years Peter has made and lost a £10m company, been promoted to managing director of Serano in London and has just founded the UK branch of Russian based company Dataart which will be worth $250 - $350 million in five years… just another graduate then?

Nottingham Trent's Platform magazine catches up with man who had an idea while he was brushing his teeth.

Age: 24

Degree: Applied Physics, 1999

How did the website come about?
A very good friend and myself decided to setup a business in selling computer networks, during the first year of university. We set the business up from £200 and ran it out of my student room, within the 1st year it went from £200 to approx just over £100k. The business grew while we were completing our degrees (i.e. spent 70% doing business 30% doing degree). When we finished our degrees, the start of the Internet boom was just beginning, and we were looking for a way to break into the Internet. At the time people were talking about e-commerce sites being able to sell products to every household in the country. However, there wasn’t enough computers, or IT literate people to achieve this. That being said, students, for some reason, had been left out, and the business case was really very good. Of the 4.3 million students in the UK, the majority were IT literate, and had been on the internet for the past three years, free access to PCs and the net and spend £5 billion pounds a year !

So we setup a web site that would achieve 3 things:

  • Provide a unified resource for help and advice on all student related matters. This information has almost always been available but only from disparate sources.

  • Target the local area, i.e. cities. There seemed little point in make a very general site that tried to cover the entire country, because the key to it all was students interacting. So if you were a student in London, and wanted to find a partner, you wouldn’t normally be interested in meeting someone from Aberdeen. This local focus allowed us to target local businesses for advertising and sponsorship opportunities.

  • Do nothing remotely academic. I had been a student, and the last thing I would have logged on to after a hard day of lectures or exams, was an academic site. So we focused on witty, satirical stories, games, chatting, dating, risky content, etc, etc. The site would be written by students for students.

I came up with the idea while brushing my teeth one morning. I went and told my business partner and a couple of other friends, the next day the company was formed.

We invested all the money we had made from the first business into the new company and before we had received any outside funding had we had a team of around 10 people and were making £23k a month from Nottingham alone.

Around Jan 2000, due to a lot of press coverage we had a number of companies approach us to invest or buy the company.

We agreed a deal with an American company in Feb. 2000 to buy 70% of the company at a deal valuation of approximately £10 million.

What happened in the end? Rumours had it that it was worth alot of money?
StudentNet was a classic dot.com story. We made a lot of money and lost a lot of money. The company who bought Studentnet in February 2000, was hit very badly by the dot.com crisis.

So much so, that we decide that we needed to buy the company back from them. We bought the company back in September 2000, and started to bank roll the company ourselves, while looking for other investment.

By December 2000 we still had not found a satisfactory deal for the company and decided it was about time we called it a day (bearing in mind the amount of money that we had already invested in it ourselves). So we decided to voluntary close the company down on the 22nd December 2000.

How did you move on from the website?
During the course of Studentnet I spent over 12 month doing corporate finance in the UK, US and Switzerland. From this I had quite a large network of contacts. The next day after Studentnet had closed I had three job offers.

After some consideration I decided to accept the position of Marketing Director for Australia’s largest portal BSF. After six months I was offered a promotion to Managing Director of a one of a group of companies owned by a private equity fund called Serano, based in London.

Where did your next ventures/ideas come from?

While I was employed by Serano, one of the biggest tasks I I had to undertake was the development of a very large, software development project.

At the time we were looking at developing the software in the UK or the US. A friend of mine, who had been working extensively in Russia, suggested that I talk to a company called DataArt.

I approached the company to see if they could build the software, they built it at a tenth of the cost in half the time.
We were all amazed! It was at that point when I realise although the IT sector is experiencing hard times at the moment, development is still needed. However, the problem is maintaining standards and minimising cost.

This Russian company represented the way forward. I approached the company to take a stake in it, to establish the UK / European operations.

In February 2002, I established the UK headquarters of DataArt Technologies. The company now employees over 80 people, and have offices in New York, San Jose, London and a software development centre in St Petersburg Russia.

Ideally where will your latest venture be in five years time?

Russia is an emerging market that has been neglected after the economic reset five years ago. The major investment banks have moved into Russia in a big way, and there is major investment.

One of the prime areas for growth is software, seeing as the work force could be located anyway in the world, and the best software developers are in St Petersburg (where Dataarts SDC is located).

In the international software programming competition which is held every year, the St Petersburg State University have come 1st for two years, with MIT 7th and Harvard 10th last year. It is now regarded as the Number 1 University for Software in the world. 95% of DataArt’s developers have graduated from this university.

Due to this talent and our international offices, DataArt is set to be one of the largest software houses out of Russia. In five years the company looks set for a flotation and at conservative estimates the valuation placed on the company should be somewhere in the region of $250 - $350 million.

Where do you want to be in 10 years time?

Ten years is a very long time. In truth I really don’t know. The most important thing for me is to be happy! My personal life plays a very big part, and although business is important you work to live not live to work. Business comes and goes, but good friends are much harder to find, these are the people that stick with you through thick and thin, and are worth their weight in gold.

What’s your advice to anyone wanting to go into business?
Why haven’t you done it yet!?! Seriously business is about action. I have heard many people with great ideas, but the ideas are reserved for the pub. Very few people act on them. This, I feel, is the big difference between entrepreneurs and people who just want to work. If you have an idea, or business, why not make it happen?

Once you have decided to go ahead, learn to sell!! I can’t stress this enough, every aspect of any business is sales. Whether it’s a legal negotiation, a staff meeting, or actually selling products. You need to be a master, if you can sell, everything else will follow!

And for those who have already started on business ventures remember there are only ever four ways to grow a business:

1. Increase the number of customers
2. Increase the frequency of the transactions
3. Increase the price of the products
4. Increase the efficiency of the operation

Any other information you think will be interesting?

I firmly believe that almost anything is possible if you try. I don’t feel that Studentnet did anything that the majority of students if they put their mind to couldn’t achieve. So if we got this far, how far can you go?

We won some, lost some, but it has been an amazing journey, and it’s not over yet!

I am sure there are people at university now, with even better ideas.

Come on Trent I know you have it in you.


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related

Trent Graduates:

Adam and Adam, founders of Provision


Peter Atalla, founder of StudentNet

Jill Foster, Features Commissioning Editor of the Daily Mirror

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