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Quick Change -- How fast can you make a
million?
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By Peter Kooiman
Entrepreneur magazine - July 2001
Despite what you may have read in Get Rich Quick! Volume 33, there’s no
foolproof plan for making $1 million in your first year. Most start-ups
never make that kind of annual revenue at all. “People are running away from
the big splashes,” says Robert Lattimore, president of CCSBI (Contra Costa
Software Business Incubator), a Concord, California-based incubator for
technology companies. “A year ago, the discussion was macro, not micro, but
now people are interested in consistent growth, results and profit.”
But that focus on the long term can yield results in the short term.
Start-ups that stuck to business basics during the dotcom hysteria of the
past few years are now reaping the benefits. Consider these fledgling firms:
MyPrimeTime Inc. focused on profitability, not valuation, and grossed more
than $1 million in its first year.
Shunra Software Ltd. made more than $1 million despite the fact that it
received no outside funding and was run out of a garage.
Pacific Coast Reprographics made more than $1 million while competing
against the largest reprographics conglomerate in the nation.
While these companies’ owners all took different paths to their first
million, they share one common thread: an intense focus on sustainable
growth and profitability.
Get Your Motor Running
While most start-ups slowly work their way toward the $1 million plateau,
others are built for speed. MyPrimeTime, a digital media company that
produces success-oriented TV programming and a similarly oriented Web site,
was founded by movers and shakers in the broadcast media world who knew how
to get to $1 million—fast.
“Throughout the company, there was a sense of urgency,” says Craig Forman,
39, co-founder and CEO of the San Francisco-based start-up. “We had
deadlines before we started, and we hired for speed. That’s the only way you
can get to $1 million in the first year.”
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"Throughout the company, there was a sense of urgency. We had deadlines
before we started, and we hired for speed. That’s the only way you can get
to $1 million in the first year."
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MyPrimeTime’s founders were focused on the bottom line. “We come from the
old world [i.e., companies including AOL and CNN], so we’re geared toward
profitability,” says Helen Whelan, 46, co-founder and president. “We always
look at things from a cost-benefit analysis.”
Giving employees the freedom to communicate and make their own decisions was
a big part of MyPrimeTime’s first-year ascent. “We couldn’t have moved so
quickly if everyone internally wasn’t empowered to run their own group,”
says Forman. “If you create an environment of mutual respect and
communication, you get more out of the team.”
Forman and Whelan’s extensive experience in broadcast media kept MyPrimeTime
growing while many Internet start-ups were hitting the skids. In January, by
making the most of their industry connections, they launched Great
Entrepreneurs, a weekly half-hour PBS show that profiles famous
entrepreneurs of the past century. “Television is considered very sexy, and
people want to be around it,” says Whelan. “Plus, with our background in
broadcasting, we could immediately go in as a partner with PBS and create a
TV show.”
Their partnership with PBS also gave MyPrimeTime a national platform from
which to reach its target audience: baby boomers. “PBS is perfect for our
demographic,” says Whelan. “It’s classy, and it’s for people who want to
educate themselves and get better at what they do. The show dovetails
perfectly with the message on our Web site.”
Forman and Whelan struggled with personnel decisions during their first
year. “There was a time when we thought we weren’t hiring big enough or fast
enough, but then we had to lay off 30 people,” says Whelan. “It’s easy to
get ahead of yourself and spend a lot of money when you’re growing.”
“The nuance here is, you have to be fast, but you’ve got to stick to your
plan,” says Forman. “Our mantra is, ‘We don’t do frantic well.’ Speed is
important, but you must have your eye on the long term, not the short term.
Especially now, growth must be evolutionary, not revolutionary.”
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