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netpreneurs on building a business, your way
lessons in leaving home

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Q: I am Frank Borgia of frankly.com. If you could do it all over again, what would you do differently?

Mr. McQuown: Well, I wouldn't have gotten my master's in forensic science.

One thing I did wrong was not believing in the entity Proteus early enough. I didn't do things like getting a credit line at a bank to make investments within the company. It wouldn't have been much, maybe $10,000, but when you are two people just out of college in a basement apartment, you can't imagine it. I hate to say it, but it is kind of my Mom's fault for raising me so conservatively on the money side, though that has come back in good ways. I didn't believe in the entity strongly enough to put a lot of skin in the game early on and take a loan. I did it later, but, to be quite frank, I didn't do it early enough.

You also tend to think, at least I did, that you don't need to write a business plan because it is all there in your head. When we got our first MBA employee, then we got our second, it was an exercise they made me go through. I said, "Come on you guys. We are talking semantics here." But in hindsight, it is a very important exercise to go through, and I would encourage everyone to do it. I know it is hip to say you don't have to do one, and people are getting rich without them, but it is a very important exercise. You will learn a lot about yourself, your business, what is going to work and what is not going to work.

Ms. Masri: It is hard to do a business plan while you are actually working on the company. It is good, in a way, because you identify a lot of things. It is something we've recently done as part of working on getting some financing for cash flow, improvements and such.

Maybe hindsight is 20/20, but I think the biggest thing when you first start out is that you feel like you are not a "real business." That was detrimental, at first, because people can read fear on a person's face. You can tell when they don't believe in themselves or aren't confident, and that was one of the hardest things for me. I am not a salesperson by nature. I was more of a behind-the-scenes kind of salesperson. I'm the one who writes all that direct mail that you throw in the garbage. When I had to speak in front of people, I got very nervous and felt like I didn't want to give away too much about our business. I didn't want to tell anybody that I was sitting next to my husband, Keith, and that we work out of our home. It just sounded kind of cheesy, to be honest. We have definitely gotten past that point, but, at first, it was a real stumbling block for us. Once we got the confidence and said, "We are doing good work. The clients like us. They are referring us to their associates and we are getting new business. What do we have to be ashamed of?" That is when things really took off.

Ms. Martin: I probably would not have moved next door to the neighbor that called on us.

Every lesson I have learned, I learned for a reason, so it is hard for me to say what I would have done differently. I had a quasi-business plan which I am refining right now. At this stage, I need to have a business plan to show me the direction. There are new services we want to add, and I need the answer to whether we can do it as a self-funded company or whether we need to go after funding If we do go for funding, what is it going to take? Could we find a funder that would share the same values? We are doing it now to see our vision more clearly down the road.

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Q: I'm Jeff Cleaton with Cybercash. What do you do when a client comes to you with a big plan that includes things outside your expertise?

Ms. Masri: We sell ourselves as advertising people who do Web development, so a lot of times people will say something like, "Oh, then can you do our logo? Our brochure? Our direct mail?" When we first started out, being really scrappy and wanting all of that cash to be able to grow, a lot of times we would say, "Yes, we will do this, we will do that." Now it is to the point that we put our foot down and say, "We are really not in the business of doing this. We have dedicated ourselves to doing this one thing and doing it really well." That said, we have people we know through our contacts who can do print advertising or high-end programming if a client needs it. We don't do any of that kind of work, but we do know people who do. We're not ashamed to say that we don't feel comfortable doing some things, but we know people who do it. That raises your clout in the eyes of your clients when you can point them to a professional who offers services that will work in tandem with yours.

Ms. Martin: Our clients see us as what you would call a "one-stop shop." We started in the business through tradeshows. We did all of their print collateral, design, copywriting, print management, direct mail, you name it. Then we did their tradeshow floors. We did their Web sites, and they looked to us to carry out their image. We can reposition them in the direction they want to go and carry everything out. Because our clients have that comfort level with us, they will also ask if we can do their PR. We don't do PR, but we can bring the experts in through our strategic alliances, and it's been very, very effective for our business.

 

Q: I am Julie Burnette from Julie & Company. I'm a very overworked and very tired Web designer on the verge of hiring my first employees. How do you go from a sole proprietor selling creative services to hiring other people to work for you? My problem is that I think people buy my brain, and I'm not quite sure how to hire people to sell my brain since they don't have my brain, if that makes sense.

Ms. Masri: Hopefully cloning will come along.

Ms. Martin: We're waiting for cloning, too.

I can't do design. I'm sales and marketing, so I got the team together. That is what has made us successful. You are the person producing the work right now, so you are not out selling. When I started LeapFrog Solutions, I knew the team I wanted to get together. I had worked with these individuals before, and I knew the talent they had. For me, it was a very easy sell.

When bringing on employees, you have to make sure that you don't hire someone like yourself. That was my first mistake. The very first person I brought on was another salesperson and I needed more of a marketing admin. She and I got along great, and it was really quite comical in the end to watch when I realized her administrative skills were worse than mine. I hired her thinking, "She a salesperson. She has to be great." I learned quickly to make sure you know your real needs before you hire a person.

Ms. Masri: Yes, especially if you are going from one person to two. When we started off with myself and Keith, it was a good combination because I was doing all of the sales, I was pretty much the office manager and I did the writing and the marketing; Keith did most of the programming and the design. To some extent, we still work that way. I do my fair share of programming, but I'm not a designer.

You said that you are overworked and you are stressing. What are the things that you need to take off your plate? If you are having no problems getting new clients and doing the designs, but you're crunched converting the designs into HTML or you're not up to speed with Cold Fusion, then that's where you need to spend the most time looking. One of the most effective things we have instituted is time tracking. It is just fantastic. Not only does it help you decide how much you are going to bid on a project, it also lets you see where you are spending a lot of your time. That is probably the best way to get started, then try to write down the skills you need and figure out where to go from there.

Mr. McQuown: Our situation was a little bit different because my partner and I were right out of college and had no real world experience whatsoever. We needed somebody to increase the bandwidth of work, but we also needed somebody to polish our image. After several rounds of interviews with different people, we selected a woman who had worked at Earle Palmer Brown for about five years. We had to give her equity, simply because we couldn't afford her, but she was able to come out of sales meetings with us on and say, "Okay, Patrick, I know you are really excited, but don't yell at the client." or "Those misspellings in your emails, you are going to have to fix that." We had a unique need in that sense, but the one thing I can say is that your first hire is probably going to be your most important one, only because that's the first time you are not directly overseeing the work from start to finish. You see them talking on the phone to a client and think, "I hope they are not swearing at them or something." There are so many trust issues that come into play. Hands down, it was one of our most important hires, and she worked out great for us. So, take your time and don't hire somebody just to increase your bandwidth. Hire someone who is actually going to bring something to the table, and whom you trust without a doubt.

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Q: My name is Michelle Fisher with Inner Angles. That question was so similar to mine that I am going to try to get mine narrower. Suppose you have a customer who wants a specific system built, and you need to hire someone to do it. Do you have any tips on how to find someone who's compatible just for this particular project?

Mr. McQuown: The only thing that I can say is what Layla touched on about choosing your clients. You have to pick jobs that you will excel at 100%, not just because you want the revenue or the client when the technology they use is totally different from what you are skilled at. The list of variables that can make a client inappropriate for you is a long one—maybe it is too big, too small and so on. What has worked out very well for us is to call a spade a spade. We are all sipping the fire hose here, and there is so much work to be had that it is not even funny. We have worked out relationships with companies that are bigger than us, smaller, the same size and those which used different technologies. Some are very, very good; some need to be worked on. Some we don't trust to do the work for us. We have said, "Okay, we have a client that needs this and we do not do it. We are trusting you to do the job." We essentially hand over the client to that person, and it's theirs to lose. It's almost a shoo-in that they are going to get the work because we have given them the recommendation. It works the opposite way, too. Somebody bigger can't handle a job or doesn't have the bandwidth and they know that they can hand it down to us. We have gotten the nod from Proxicom, for example, and the customer knows that they can trust us to do the work. I know there have been a lot of missed revenue opportunities and clients we have passed up as a result, but it would not have been appropriate for us and would have come back to haunt us. You have to establish a network, and you have to establish it quickly. In the services industry, there is no reason to think that you're competitors; you just aren't. Yes, you might bid against them on a job or two, but the fact of the matter is that there is enough work out there for everybody.

 

Ms. MacPherson: Thanks, Patrick. I think we are going to wrap there. Let me close with a couple of thoughts. What we have seen this morning is that there are different styles and approaches, but there is clear consistency on the need to focus on your people, hire people who complement you, focus on your customers, manage the kind of work you bring in—and believe in yourself and your dreams. We would like to thank our panelists, and thank you all for coming this morning.

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