Julius Dreyer

This post is a translation of an article called Netzwerker (engl. networkers) published in the most widely read weekly German newspaper Zeit in August 2008. It covers the founding story of The Netcircle Shanghai and gives a little bit more insight into David’s, Robby’s and my background. Published nearly a year ago it is not exactly new anymore, but the story is written better than I would be able to tell it, so I felt like sharing it with my English-speaking readers here, too:

The Networkers

Without knowing a word of Chinese three brothers from Bielefeld, Germany, went to Shanghai to start an Internet company. And they succeeded.

Summer 2004 turned out to be far from fantastic. Germany was eliminated from the European Football Championship without much ado or win. This seemed quite appropriate, as there was little which could have made David, Julius and Robert Dreyer stay. Germany, and in particular Bielefeld, felt too small, too narrow and bourgeois. They needed to get away. Travel, see the world. And make a living from the Internet on their way. They were hoping the World Wide Web would allow them to combine a global nomad lifestyle with entrepreneurship. David, 22, and Julius, 20, already had some experiences in the web industry, and now they only had to wait until their youngest brother graduated. So once he did, they snatched him straight from school and boarded a plane to Shanghai.

Monday morning, four years later, about 9,000 kilometers away from Bielefeld. A heat haze fills Shanghai’s streets; the sky is a shapeless off-white; Suzhou Creek follows Yi Chang Road for a bit with a lazy ripple. At the end of the street, where high-rise compounds grow between delicate bamboo scaffolding, there is a small area that seems to resist the city rule number one: “Rise or give way!” These cots have not risen. They have transformed. From having been small warehouses for over 80 years to becoming a center of creativity for young startups, supported by the city council. It is hidden here, in the Warehouse Creative Center, behind a massive fortress-style steel door, the office of three lao wai – “Strangers” – the Chinese term for Non-Chinese people.

On the first floor, Julius Dreyer is sitting behind a large flat screen, in a white t-shirt and shorts. Next to him sits his brother David. Julius talks fast and plenty, David mostly listens and nods every once in a while. “In hindsight”, Julius says regarding the escape from Bielefeld, “you could call it teenage foolishness.” Shanghai was meant to be the first stop of their world business trip. They didn’t speak a word of Chinese; in fact, they “didn’t have much of a clue in general”. A fellow air passenger was nice enough to scribble a few characters on a piece of paper so that they would at least find their hotel. Shanghai turned out to be their final destination. However, this only meant saying goodbye to being a nomad: Today the Dreyer brothers have gathered around 40 employees in their two storey, 1000 sqm office; developers and system administrators, marketing professionals and web designers from more than ten different countries. Their company is called The Netcircle, specializing in niche social communities and developing virtual hubs for schoolmates, for homosexuals or for fans of one-night stands. A lot of them are just half-done test sites but some have took off and generate altogether up to 170 million clicks per month, entertaining two million members. This is making good money through advertising and “premium memberships” turning over seven-figure revenue.

At an age when they could not even buy a beer in the shop (16 in Germany), Julius and David had already earned their first money online. They followed a simple strategy: Buying memorable domains such as www.konzert.de and optimizing the websites to make them easy to find on Google. Having attracted visitors to their sites they would link them to other providers’ pages for a few Euro cents “commission fee”. By 2004 they had made enough money to pay for their trip around the world.

Their father was less excited about his sons’ erratic wanderlust. They should at least be starting a career with their travels. He showed them an article about Shanghai – according to it the “City of the future”.

Once they had arrived in the future, the brothers rented a six bedroom flat. From here, they started their Internet business. They bought domains, started communities, and sold domains again. The sleazy dating site poppen.de was overrun by visitors right from the launch and quickly rose to one of the biggest dating websites in German language. They were working around the clock to keep the site up and running. They invited developers and designers to live and work with them in the flat until it started looking like a breeding place for IT experts.

The council’s offer of the old warehouse at the Suzhou Creek as offices presented a good deal for both sides. The entrepreneurs from Bielefeld restored the old building for four months and in return the council guaranteed a five-year lease and a rent considerably lower than market standards. The brothers also came to terms with the other aspects of the notorious Chinese official machinery. Julius says there were rarely any issues. Indeed, he can only remember one incident. When their rapid company expansions required 17 new work visas for employees, the foreigners’ registration office put their foot down. This would be out of line, they stated: “Seventeen new employees! And not one Chinese!” Julius is telling this story with a relaxed smile demonstrating four years of Shanghai experience. Somehow things will always work out here. You need a laid-back attitude and a talent to improvise – and the customary small attention for the local officials. In the end, all visas were approved.

And therefore, May of 2008 saw the web launch of the newest Netcircle project: gays.com, an international social community for gays and lesbians. The site strives to be a kind of “Gaysbook” – the purpose is not to find a quick date but to connect and manage long-term contacts, just like on the great idol Facebook. Julius thinks that in the long run the investment of a respectable 500,000 US dollar will also show. For the Bielefeld Brothers this social network is their debut on international markets. The brothers seem to get entrepreneurship about right in Shanghai. Now they are planning to become nomads again, “after the four-year pause in Shanghai its time to move on” he finishes the interview.

Where will there travels lead next? Maybe Barcelona. Or Silicon Valley. Who knows? “Internet business has no restrictions to where you are”, Julius says from behind his flat screen.