By Lester Kok

SIX young adults squeezed into a small room not much bigger than a table tennis table plotted how to make money using the Internet.

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Two years on, they are set to make $1 million in revenue and have just recently moved into a much bigger office - 1,400 sq ft in size.

The company, Techsailor, found itself a niche, building online social networks and communities for companies. It helps companies attract and retain customers via their web-communities.

Techsailor was one of several start-ups which received $50,000 in funding under the Interactive Digital Media's Jump-start and Mentor (i.JAM) initiative when it first started in 2007.

The original team of six is now a team of 40 and there is a second office in China.

One of the founders, Mr Wayne Chia, said it was not easy keeping cash flow positive when the company first started. Deals had to be clinched and clients chased for payment while research and development work was being carried out.

'We have a mechanism in place that we will never spend more than the money coming in,' the 26-year-old said.

Mentored by the National University of Singapore's Entrepreneurship Centre, Techsailor spent its initial days occupying rent-free space at the centre.

Some of the clients it worked with included Singapore Airlines and TV news network CNN.

To continue growing, another of its founders, Mr Rex Huang, returned to his homeland, China, to set up a new web portal there called Jujuya.com, which allows individuals to create and customise their own social networking sites for free. It was used in Super Girl '09 - China's version of American Idol - in which each contestant had her own site for fans.

Techsailor's new product is like a Mandarin counterpart to Ning.com, an international web portal in English that allows anyone to create his own social networking site.

Mr Chia said that even though the company's current business model makes money, a big part of its profits is invested in R&D.

Techsailor is hoping to attract more investment to expand its services.

Like most start-ups, it was not smooth sailing at first and Mr Chia said there was a 'huge gap' between getting initial funding and growing to the stage where venture capitalists were willing to invest big money.

'Most companies have to crawl their way to reach there,' he said. 'Either you are not innovative enough, or you'll face scepticism.'

This article was first published in The Straits Times.