SAN FRANCISCO – Small companies are the lifeblood of the U.S. economy, and real estate entrepreneurs Friday morning shared insights about challenges and strategies for getting through the first days.
“It’s about really getting right down to what you do and being focused,” said Joel MacIntosh, CEO of Minneapolis-based WolfNet Technologies, a technology developer for the real estate industry.
“A lack of focus can cause all sorts of problems,” MacIntosh said during Real Estate Connect 2005.
He and others shared stories about the early days of their companies. WolfNet had a difficult time maintaining focus in the beginning, MacIntosh said, and it wasn’t until the company zeroed in on serving the real estate industry that things started to progress.
WolfNet in the last year and a half has been growing steadily, he said. The company is 10 years old, has 18 employees, and is growing at about 44 percent year-over-year.
Brian Boero, CEO of VREO Software, said his story is about humility and patience. He has been instrumental in the merger of two companies, VREO and Criterion Corp., which makes the RedTablet PC. Both companies were small going into the merger, which lasted about eight months from start to finish, according to Boero.
“Small companies are really seductive,” he said. “It’s tempting to jump in and start doing things yourself,” but small companies are fragile, and that approach won’t work, he said.
“You have to keep yourself in check. That’s a lesson I learned the hard way over the last six months,” he said.
Boero said one of the companies is at about a 44 percent year-over-year growth rate, and the other is at about a 77 percent year-over-year growth rate. “Now we have combined resources of these companies – we’re looking for heavy growth.”
Mergers are tough and always looked at with a degree of skepticism. Boero advises a meticulous due diligence process before companies consider the move.
“Be prepared to deal with different personalities,” he said, adding that the most challenging aspect for him in the merger was navigating the different personalities from the two small companies.
Renwick Congdon, CEO of Imprev, said he learned about small-company personalities when he gave his staff a difficult speech one afternoon years ago to let them know that he wasn’t sure whether the company would make the next payroll. He said he gave them the choice to leave with complete understanding, but they all showed up for work the next day.
Imprev, which has 12 employees, has been profitable for two and a half years he said. The company is growing at about 100 percent year-over year, according to Congdon, and anticipates a 200 percent growth next year.
Whether or not to seek out and accept venture capital is a decision many small companies face at one point or another. Janis Machala, managing partner of Paladin Partners, said that it’s important for entrepreneurs at small companies to know what they are getting into before accepting capital.
“As soon as you bring in venture capital, you have bosses,” said Machala, who’s done consulting work.
“If control is a major issue for you then don’t go the venture route,” she said. “It’s just not going to work for you.”
But for those who are looking for capital backing, “there’s a ton of money out there,” Machala said. However, venture capitalists today are funding mostly entrepreneurs who are already on their second or third company. First-time entrepreneurs are not as attractive right now, she said.
***
What’s your opinion? Send your Letter to the Editor to jessica@inman.com.
