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  • Nov 19, 1995
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November 19th, 1995
Coffee Stop on the Superhighway – towards the Superhighway Award 1995 – Innovation

THE WINNERS. An original idea hatched on paper napkins now looks set for worldwide success. SO that’s how you make money out of the Internet … cobble together a few computer terminals, rent out some well located property, buy a cheap coffee machine, think of a groovy name and franchise the idea around the world. In fact, something not so dissimilar lies behind the incredible story of Eva Pascoe and Gene Teare, overall winners of this year’s Sunday Times/BT “Towards the Superhighway Awards”.In just 14 months these two pioneering women have created what is becoming a fast-growth industry in coffee-time Internet. With an initial #50,000 investment, their chain of Internet cafes, called Cyberia, is now valued at nearly #5m and is becoming a famous brand throughout the world. “Our aim was to provide experience of the Net to ordinary people who are often frightened away from technology,” says Pascoe, who was born in Poland and moved to Britain 10 years ago to study psychology in London.

She and Teare, a student friend, found themselves locked in the academic world of a computer department, struggling with specialised computer languages such as Unix in order to use the Internet for searching libraries and sharing research papers with other students across the world. But then, almost overnight, the development of the Net’s World Wide Web changed everything. “It was just amazing,” recalls Pasco. “When I first saw how easy it was to use the Web, I realised that a huge new form of communication was suddenly opening up. I guess for my parents’ generation it was the TV that became the new medium that affected everyone. For us it is the Internet and primarily that is owing to the Web.” But despite its new “point-and-click” ease of use, Pascoe who was by now teaching at a London university discovered that within academic communities access to the Internet was still mostly the preserve of male computer nerds.

“I found that just because I was female and not part of the computing clique, it was almost impossible to get e-mail accounts for my students, let alone full access to the Web. The infrastructure was there, but there just wasn’t the right environment.” The result, hatched on an assortment of paper napkins in Teare’s kitchen in June last year, was to sell Pasco’s interest in a Polish software firm and use the proceeds to set up Britain’s first Internet cafe. With a budget of no more than #50,000, Cyberia, the wired-up cafe just off London’s Tottenham Court Road, was born just six weeks later. “It had to be on a street corner,” says Pascoe, “Poland has cafe culture and cafes tend to be on street corners because there is more light and a much more sociable environment.” Pascoe’s dream of turning urban technophobia into the wired Wild West is now threatening to become a serious business venture. Initially, there was a mad dash to grab the catchy name Cyberia, now highly protected by Pascoe and Teare’s legal team. “Another group was planning to open an Internet cafe in London and were going to use that name, but they didn’t have the finance and we got there first,” says Pascoe.

Since setting up, Pascoe, 31, and Teare, 28, have franchised their British operation, charging a flat fee of #10,000 and demanding 8%-10% of revenues for other Cyberias. Now there are four British franchisees, in Edinburgh, Manchester, Kingston and Ealing. Soon another will open under the Cyberia banner in Tokyo. In Paris, Pascoe and Teare have set up a branch under their own direct control and Cyberia’s global expansion is set to continue with Net cafes in San Francisco and New York in the pipeline. Another cafe in central London, probably in Haymarket or Leicester Square, should be ready to open next year. “We need more experience on the catering side,” confesses Pascoe. “We know how to teach people about the Net but food is not our speciality … yet.” Originally, Pascoe’s total investment in food and drink equipment was an #800 coffee machine installed just before the original London cafe, at 39 Whitfield Street, opened in September last year. “I spent the whole launch day in a cab trying to find a better coffee machine because the one we had made about one pot every half hour.”

But it’s not just snazzy names or new coffee machines that have crystalised Cyberia’s commercial success. The core business is as old as the hills training. Pay #25 and a two-hour session in “sub-Cyberia”, the cafe’s basement, will teach the non-computer user everything that he or she needs to know about the Net Web, FTP, newsgroups, e-mail, the works. Internet training, providing a forum for conferences and business events, and franchising the brand represent the core business.

The medium-term strategy is clear enough. An American investment fund Brahman Capital Corporation recently injected #250,000 into the business in return for equity and is prepared to proffer more.And Sebastian Conran, son of Terence, is currently designing a line of Cyberia fashion accessories fancy a computer diskette neck-case or modem-friendly belt?

Meanwhile, Cyberia has been chosen by the almighty Microsoft to be one of its key pit-stops on the soon-to-be-relaunched Microsoft Network. Courses on the Blackbird programming language are promised soon. But the ultimate goal, of course, is stock-market flotation, as is evident from the twinkling eyes of the female duo who together own a significant slice of equity. “We are thinking of a two to three year time-frame,” says Pascoe. “When we have 20 or 30 outlets then perhaps we would consider going to the market.”

Wherever their original back-of-a-napkin business model ends up, the achievement of Cyberia is abundantly clear. With more than 91,000 people having “surfed the Net” sipping cappuccino (age range: 2-93), almost 5,000 through their training courses and 132 companies launching Web sites on Cyberia computers, it is no mean achievement.

 

The Sunday Times
19 November 1995
Author: Christopher Lloyd

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