American Venture Magazine: Lessons Learned

BY: AMERICAN VENTURE MAGAZINE, JULY 25, 2006, BY: STEVE CODY

The average entrepreneur makes quite a few mistakes in attempting to navigate the often tricky waters of a new venture. Some mistakes are minor, and can be easily overcome. Others, though, can be cataclysmic and, like a reef or shoal, can cause the best-intentioned entrepreneurial ship to founder.

Having survived those turbulent early years and lived to write about it, I'd like to share some of the mistakes we made and lessons learned in the process.

Mistake # 1: "Trying to be all things to all people."

Eleven years ago, my partner and I started our public relations firm in his apartment. We had one computer, one fax line, a printer and no clients. We desperately smiled and dialed our way through the rolodex, attempting to convince corporations, large and small, to give us a project. One actually called back. It was a retail organization whose goal was to launch the "world's first health care superstore." The organization planned to do for healthcare what The Home Depot, Wal-mart and Radio Shack had done for theirs. Even though neither my partner nor I possessed any retail or health care experience, we convinced the client to hire us. Needless to say, the results were abysmal and the relationship ended abruptly.

Lesson learned? Determine your strengths and target your business development efforts accordingly. Today, we stay focused on corporate, financial services, technology and consumer sector accounts, and aim to be among the very best in each.

Mistake # 2: "Sacrificing quality for quantity."

As our business grew during the early years and we found ourselves swept up in the dotcom hoopla, prospects knocked early and often at our door. It wasn't unusual for us to receive more than 30 unsolicited leads every week. To keep pace with a business that was growing at a clip of 100 percent annually, we hired anyone and everyone who seemed reasonably competent. As a result, our client service model suffered dramatically, the culture within the firm took a nosedive and our overall industry image reputation came into question. The subsequent dotcom crash enabled us to weed out the poor performers and trim back to only the best and brightest staff.

Lessons learned? Today, we have a sophisticated, multi-layered approach to recruiting, hiring and retaining only the smartest professionals. We will never again sacrifice our firm's good name simply to staff new accounts.

Mistake #3: "Bring penny wise and pound foolish."

Cash flow is critical to an embryonic business and we were no different. We cut corners whenever and wherever we could. After we moved out of my partner's apartment, we sublet a two-office space from an ad agency, whose name was stenciled on the front door. Rather than spend the money to have our own name imprinted on the same door, we had the agency create a cheap foam board with our name and logo. We slapped double-sided tape on in it and pasted it over the ad agency's name whenever prospects paid a call. Within a month, there were dirty fingerprints on the sign. The ultimate embarrassment came when the sign literally fell off as we were bidding adieu to an important new client.

Lessons learned? We now invest and re-invest in our business, realizing that doing so is a smart, long-term strategy. In fact, we reside in a state-of-the-art office space that, along with our people, services and credentials, has convinced quite a few blue-chip clients to retain us.

Steven Cody is managing partner and co-founder of Peppercom, a strategic communications firm headquartered in New York, with offices in San Francisco and London. This year alone, Peppercom has been named PR Week?s best small agency and The Holmes Report?s most innovative agency

American Venture: Lessons Learned