During a press interaction on the occasion of Ensemble 2000, the management concourse at XLRI Jamshedpur, Mr Srinivasan said that a dotcom should be prepared for a three to four-year gestation period before the payback time starts.

"Gone are the days when a promoter could set up a dotcom and think of selling out in six months. In today's scenario, it will be more like any other business which undergoes a three to four year hiatus before revenues flow in. The challenge for dotcommers is clearly how to sustain themselves and spend enough to build good brands," he said. Many had failed because they expected this period to be much shorter, he added.

According to Mr Srinivasan, before starting a dotcom one should examine whether an existing offline business providing a similar service is already meeting the existing demand up to consumers' expectations.

There are two essential pre-requisites for a dotcom to succeed - first, there should be a clear need for the service and second, people visiting the site should be made to pay for it.

"It should not be a site to attract eyeballs only or one where you offer freebies," said the McKinsey executive, who is here on an assignment at Tata Steel.

Mr Srinivasan, who was also associated with the Nasscom-McKinsey 1999 study, feels that the start-up should give the consumer a much larger choice than what is he is already getting elsewhere.

He said portals like the Wall Street Journal and Yahoo are successful as these either offer "a much larger choice" to subscribers or a "much more personalised service" than what he gets elsewhere.

Mr Srinivasan also said that domain knowledge is imperative for the success of a start-up and a degree or diploma like MBA is not a sufficient guarantee for making a dotcom venture successful. Moreover, "a lot of money is needed in brand-building," Mr Srinivasan said, adding that at least Rs 20 to 30 crore would be needed for a meaningful brand-building effort.

The senior McKinsey executive said there is a lot of potential in the "enabling business" where a B2B2B or B2C2C dotcom enables "other businesses to perform better, like solving bottlenecks, etc." The "Peer to Peer" (computer to computer) enabling business also has a good future, he said.