Written BY: A.F. Hutchinson
At first glance the formula for web success seems fairly simple: start with an idea, add enthusiasm and sprinkle with funding. Spread mixture evenly over the internet. But in an environment where appetites and attention spans change at mouse-click speeds, and where the very definition of success evolves by the hour and by the blog, online entrepreneurs must blend the basics with vision and more than just a dash of fearlessness. Four of the web's most innovative and successful entrepreneurs show Exec Digital how it's done.
Commanding the basics: Nathaniel V. Stevens, Yodle, and Michael A. Davis, Guardian Preservation Services
There's little glamour in directory services and mould remediation on the best of days, but as web celebs Nathaniel V. Stevens and Michael A. Davis have found, stellar opportunities abound for practical thinkers and problem solvers. Stevens was working as a summer intern at his family's auto dealership when he developed the concept behind Yodle, an online advertising services site serving the needs of small businesses. The Wharton undergrad was struck by the void in the marketplace created when innovative search engines and online marketing technologies captured consumers' imaginations but offered little in terms of meaningful content.
"The major (print) directories were becoming antiquated and weren't transitioning off the internet effectively in terms of how they were going to publish content online and make it accessible and meaningful to consumers, so they were losing mind share," Stevens,25, recalls.
In 2004, the web had yet to become profitable for small business owners, most of whom lacked the resources, budget and time to manage the kind of sophisticated online advertising programmes that could exploit its potential. With Yodle, Stevens developed a turnkey solution for small businesses, providing effective lead generation, tracking, and ad program optimisation. In retrospect, developing Yodle's proprietary software was the easy part. Stevens set an ambitious six-week calendar to prove the concept to potential advertisers. After weeks of selling $50 and $75 content packages, a customer referral landed Stevens a $1200/month contract.
"That was 40 percent of our revenue at that time," he laughs. "We got the recipe. Over the next three weeks we continued to drive further towards that $20,000. We got that, and we knew we had a business on our hands." Stevens wisely sat on the impulse to immediately shop his solution to potential backers. "The key for us was to maintain ownership and build the business up to a level where it was sustainable in its own right, and growing as a vibrant presence with very strong revenue numbers before we went out and raised venture capital money."
Stevens and his partners used their own money to drive sales past the $1 million mark before taking their show on the road. "It was a wise decision because it allowed us to maintain a larger stake in the business as founders, and it helped us avoid making mistakes with large sums of money while we got the core kernel of the business really perfected." In 2008, Yodle reported 700 percent year-over-year revenue growth from 2007 and in January of this year, successfully completed a $10 million Series C funding round. At present, Yodle serves over 5,000 customers.
Savid Technologies founder Michael Davis was only 16 when he began making his mark on the web technology circuit, teaching multinational firms how to bolster security and guard against hackers. At 18, he was the youngest-ever team lead hire at global enterprise solutions developer 3Com. Davis eventually arrived at antivirus software giant McAfee; after a year of fighting his natural entrepreneurial inclinations he struck out on his own to launch Savid, just after turning 22.
The improbable leap from web security to mould removal mirrors Nathaniel Stevens' entry into online business - Davis's grandfather specialised in preparing foreclosed properties for bank sales, and had over the years become frustrated with the limited solutions for cleaning up mould, which can irreparably damage property and health. Davis researched the topic, and found a company that manufactured a natural, 100 percent organic biological enzyme that eliminates the need for traditional toxic mould remediation methods. After paying a visit to the firm and learning about the technology first-hand, Davis studied the market.
"We looked at the internet and how people were searching mould, how much information was out there," he says. "Lo and behold, nobody was really doing anything on the internet with mould." With that realisation, Davis positioned the new firm, Guardian Mould Remediation Services, as an online thought leader.
"By doing that, people are naturally going to start trusting us and believe that we can help them solve their problems." Davis markets directly to consumers as well as B2B partners, such as HVAC contractors and realtors. 100 percent of Guardian's sales and marketing efforts are conducted on the internet. In the two years since its founding, Guardian's growth rate is exceeding Davis' initial expectations.
"My five-year plan usually is to double every year of revenue, while making sure that the bottom line has five to eight percent coming back to the shareholders. We really aim for 12 percent or more. That's hard to do, but that's what we go for, and we've been doing it so far," he says. To date, Davis has not sought VC funding for either Guardian or Savid, both of which are self-funded.
The Visionaries: Juliette Brindak, Miss O & Friends, and Pete Cashmore, Mashable
When most ten-year-olds doodle, their art winds up on the refrigerator door. When Juliette Brindak sketched her first `cool girls' as a way to keep busy on the long ride home from a family trip, a cottage industry was born. "My mom is an art director and illustrator and she's very creative, so we worked together to take the drawings that my sister Olivia and I had done and developed the Miss O characters," Brindak recalls.
At 10, Juliette naturally addressed the gap in the markets when girls outgrow Barbie, but are not ready for Britney. "It was just something fun for us to do. It was a hobby." By the time she was 16, that hobby had become a serious and sophisticated endeavour to create a safe and empowering web destination for 8-12 year old females - the `tween' girls.
"At that age, girls either have to be little girls or they have to be big girls; they can't just be themselves," Brindak notes. Too old to play with dolls and too young to follow adult pop fads and music, tween girls were an overlooked and underserved market. Brindak's social networking site, Miss O And Friends, and the merchandise the site has spawned, has changed all that. Today, Brindak is 19 and a sophomore at Washington University in St. Louis. Her net worth exceeds $15million. But the road to that fortune hasn't been paved with caricatures; Brindak is a veteran of the funding roadshow, having presented to some of the country's most recognisable brand leaders, including Target, Proctor and Gamble, and Yahoo.
Although the site is managed and promoted by the Brindak family and other partners, Juliette considers the content as belonging to the site's end-users. "If there's something on their site that they don't want we take it off," she says. It is her business to know what girls want - and she does, much to the chagrin of many established firms that market to the demographic. "When we were first starting out we did a bunch of focus groups and were working with companies that thought they knew all of this information about young girls, and they didn't," she points out. Brindak and her family went to their audience, one-on-one, avoiding a major focus group pitfall of artificially-induced group agreement. "If you don't know what they want, they're not going to like it. They're not going to go to your site; they're not going to buy your products. That's a huge problem with a lot of different companies that market products to girls," she exhorts.
As a teen in his native Scotland, Pete Cashmore turned his fascination with web technology into a profitable consulting business. Today, 23-year-old Cashmore is the CEO and founder of one of the web's most profitable and influential technology news sites. With more than five million monthly pageviews, Mashable content is widely quoted in the traditional press; Cashmore himself is widely viewed as an expert on developing and profiting from social media.
"I saw that news was changing and becoming more user-generated," he explains. "I started using my blog as a tool, trying to get ingrained into the community and try to figure out where all this was going."
His passion for solid content and his natural ability for trend spotting attracted the attention of advertisers. "I wasn't all that concerned about sponsorship and advertising because it wasn't really what drove me to do it," he admits. "It happened fairly organically with people approaching me. Every company has a story, and when you make that story transparent and when you make it accessible, then there are bound to be people who have interest."
Launched in the halcyon days of 2005, Mashable hit its stride quickly. But would Cashmore be as fortunate if he was starting out in less certain times, say, in 2009? "Any time is a good time to launch a company that's applying good content and that is answering a need," he asserts. Cashmore sees the potential for social media in every conceivable kind of business - as long as content is king. "I don't think there is much that social media couldn't expand into. It's all about telling a story; it doesn't matter if it's a steel manufacturer or if it's about making compote at a restaurant or, if it's a brand like ours, which is focused solely on this whole evolution of the web. I really don't think there are any limitations."