My Biggest Mistake
Everyone has one, few like to admit it. So bizAZ tracked down
business leaders and entrepreneurs willing to fess up. Each speaks with
the voice of experience, the will of resolve—and that valuable insight
that can only come from a lesson learned. by Kathy
Feske
BizAZ Magazine
November/December 2001
JOANNE
CARTHEY
CO-FOUNDER AND CHAIRMAN OF THE BOARD NetPro
Scottsdale
Very early in NetPro’s second year, the success of the company was
becoming palpable. We employed a total of six staff people and we were
running at breakneck speed. During this period, I was not only the
leader of the company but also handling sales, marketing, human
resources, shipping, accounting and more. I felt like I had a tiger by
the tail. The success of the company was no mistake—our ability to take
full advantage of it with limited resources was in question. Valuable
outside guidance was most definitely needed.
My mistake was this: I failed to understand the benefits of outside
expertise during such a pivotal period in the company’s life. And I
believed for too long that we could drive the success of the company
without help. And, perhaps, we “couldn’t afford it.”
And the lesson learned? To build a successful company, you need guidance
from external professionals. I learned my lesson at that time by forming
NetPro’s first advisory council and using the input, advice and expert
guidance of the group to the best advantage of the company. Through what
was then known as the Arizona Software Association (now AZSoft.net), I
initiated relationships with various people who were experienced and
skilled in their fields.
Explaining my goal of having a volunteer advisory board, I invited them
to visit NetPro, meet with the co-founder Randy Bradley, and help us
design a fast-growth company. We were very fortunate when several
candidates agreed to mentor NetPro and then proceeded to play an active
role in the development of the company over the next few years. We held
regular meetings and the group never hesitated to talk straight with us
about what was needed, to aggressively challenge our thinking, and to
advise us wisely to seek knowledge to fill key professional needs such as
audits.
If I had it to over again, I would seek the guidance of a board much
earlier in NetPro’s evolution for all of the strategic benefit it
brought to the company after its formation. I highly recommend that
other entrepreneurs do the same. As a general rule, entrepreneurs are
risk-takers and visionaries with fabulous futures ahead. Sometimes, all
it takes to realize those futures is a mentor or a group of mentors to
ground them in reality and provide a true sense of the success that they
are creating.
As a former executive for several top Fortune 500 companies,
including Motorola, Aramco and American Express, Joanne Carthey (joanne@netpro.com)
co-founded Scottsdale-based NetPro in 1991. The company develops
software to manage network directory services and counts among its
customers some of the largest companies in the world, such as Daimler
Chrysler, General Motors and Wells
Fargo.
Carthey recently stepped down as CEO of NetPro, but still remains active
in the $12.5-million company, serving as Chairman of NetPro's Board of
Directors.
BRIAN FIDLER
FOUNDER Brianfidler Interactive
Phoenix
Two years ago I was managing interactive development at SHR Perceptual
Management, a Scottsdale firm that develops brand strategy for big-name
clients like Coca-Cola, Kodak and BMW. At the time I had a number of
ideas I wanted to pursue. With my interactive background and skills, I
thought it was a great time to begin building my own company. At about
the same time I received a call from the creative director at
Britannica.com's San Francisco office. Britannica.com was building an
educational product and wanted me on their design team, a career move
that would allow me to stay in Phoenix and work out of my home.
I was torn. I had a list of solid ideas I wanted to pursue and the
timing couldn't have been better. On the other hand, the dot-com
industry was thriving and this was an opportunity to become involved
with a company with more than 200 years of solid branding and presence
in almost every American household.
I decided to join Britannica.com and placed my aspirations of starting
my own interactive firm on hold. While the decision was not one I
regretted, I do think it was the precursor to my biggest mistake.
My mistake was that I didn't cultivate ties within the Phoenix community
during my time with Britannica.com. I was working out of my home in
Phoenix, but operating in a professional vacuum. Still harboring
aspirations to start my own company sometime in the future, I instead
became so committed to developing the company’s product that I neglected
to lay the groundwork for a future beyond Britannica. As it turned out,
our office became one of the many dot-com riches-to-rags stories and
closed down. That was the point when I recognized I had missed an
excellent opportunity to develop relationships locally. I needed to
build awareness for my new company. By not having established a
foundation of business contacts, I was starting from scratch.
The good news is that building relationships can begin anytime. While I
may have missed out on an opportunity, I learned a valuable lesson: I
now take advantage of my existing free time by networking as much as
possible and being involved within the community. It’s made my
entrepreneurial venture stronger and grow that much faster.
Brian Fidler (interactive@brianfidler.com) founded interactive design
firm Brianfidler Interactive that specializes in designing interactive
user experiences. With over 10 years of design experience, Fidler has
designed and developed interactive projects for Ford Motor Company,
Starwood Hotels and Resorts, Kodak, Alpern Lehman agency, Harrison
Hurwitz Photography and Britannica.com. Brianfidler Interactive recently
won a local AIGA Prisma Award for its company Web site, Brianfidler.com
MIKE FONG
CO-FOUNDER AND CEO Calence
Tempe
In 1993, I founded Calence with two of my friends and former colleagues.
We experienced rapid growth and expanded the business to accommodate
that growth. During the early stages of the company, the founders spent
a lot of time leading the business practices, but as Calence expanded,
we had to move into managerial roles and let the next generation of
leaders step in.
Unfortunately, we were not as ready to take this step as we thought we
were. We misunderstood how the transition should occur and how long it
would take to groom new leaders. As a result we saw our growth slow
significantly. We simply didn’t have the right people ready to step into
leadership roles, and the business suffered from our oversight. That
year, growth was down 60% from what we had experienced in previous
years.
To combat the problem, we decided to create Calence University, our
corporate training program. Taking the strengths from the training
programs of the “Big Five,” (the top five consulting firms) we came up
with a training philosophy that fit our needs and values.
Calence’s training is for employees at all levels. The program for new
employees consists of four weeks of team building and knowledge
reinforcement, during which hands-on practical experience occurs. New
hires build their skills in the networking realm by configuring routers
and building network infrastructures. They also learn other practical
skills, such as how to give effective presentations and effective
internal and external communication. And they are given career
counseling, as they would receive at any esteemed university.
Continuing training at Calence is not simply a corporate reimbursement
program—which is commonly practiced by consulting firms. We firmly
believe in internal training, and schedule two weeks per year for each
employee to attend Calence University. During these training sessions,
employees are groomed for easy transition into leadership roles in
project management classes, customer service classes, and advanced
business education classes such as financial management and business
writing.
After we took the time to implement this program we saw our executives
move quickly and easily into leadership roles. Now we rarely see a
slowdown in business growth when an executive transitions into a
management position. In fact, since implementing the training program,
we have experienced 100% growth every year.
Mike Fong (mfong@calence.com) is the CEO and co-founder of Calence, a
Tempe-based consulting firm that builds customized, client-centric
networks tailored to meet specific business goals and requirements.
Recently named a finalist for Entrepreneur of the Year by Ernst & Young,
Fong has more than 14 years of IT consulting experience, working with
clients such as Sony, American Express, Motorola, Schwab, IBM and Dial
Corp.
DEAN RENNELL
EXECUTIVE VP AND REGIONAL MANAGER, BUSINESS BANKING DIVISION Wells Fargo
Bank
Phoenix
In the late ‘80s, I was trying to integrate service operations within a
financial services company—specifically consolidating consumer loan
processing and underwriting from several states into one large loan
center in order to boost efficiency.
At the beginning of this process, I reduced expenses and staff to take
early advantage of lowered expenses. However, any new operation requires
ramp-up time. Processes need to be refined and staff has to learn new
procedures. As a result, there initially wasn’t enough capacity to
handle the volume created by the integration. The quality of the new
group’s service suffered, and productivity was reduced.
Instead of cutting expenses, I should have focused on boosting
productivity and the quality of service—even if it meant initially
overstaffing and duplication of critical functions. That would have
given me the time I needed to take a realistic look at how the new
organization should function and to make any needed staffing, structural
and operational adjustments as the integration progressed.
The lesson learned: Give yourself the time to make sure you can handle
the volume and other challenges created by a major change in your
company’s way of doing business. Cost cutting should not be the main
objective. Instead, focus on your paramount goals—developing the best
service, the best products and the best functioning team—creating an
environment that sustains success. The rest will follow.
Dean A. Rennell (renneld@wellsfargo.com), a financial services
veteran for 26 year, is an executive vice president for Wells
Fargo
in Arizona. Since the merger of Wells Fargo and Norwest, Rennell has
served as regional manager in Arizona for Wells Fargo Business Banking
and specialty units serving governments, nonprofits, financial
institutions and professionals. Wells Fargo & Co. is a $290-billion
diversified financial services company with more than 240 banking
locations in the state providing banking, insurance, investments,
mortgage and consumer finance.
KIMBERLY JUDD
PRESIDENT AND CEO CyberMark International, Inc.
Scottsdale
My biggest lesson learned was also my most costly. Seven years ago I
started an Internet-based business and spent thousands of dollars on Web
design. After months of no e-mail or orders I realized I had produced
nothing more than a flashy extension of my business card—it looked great
but no one could find me.
Like so many Web site owners and the majority of dot-com bombs, I failed
to thoroughly do my homework in the beginning to find out if there was
even a market for my product online. The challenge: How was I going to
make my Web site work for me?
I started by researching and evaluating my customer’s patterns instead
of assuming what my clients were thinking, which opened many doors for
my site and business. I learned to use specific tools available to
determine whether a market exists for my particular idea on the
Internet. Using newsgroups like Dejanews.com for example, which is now
owned by Google, proved an ideal place to conduct a test market for
customers’ habits. Keyword research is another fundamental starting
point that I’ve seen many site owners neglect. Services like
Keywordzone.com are valuable to find out how many times a particular
keyword or search term is typed in each of the top 10 search engines.
Once I had established what surfers type into engines to find an
industry, I tailored my site to what the customers were already looking
for on the Web. I learned the power of knowing what people want to buy
or see on the Web without having to spend the design investment in the
first place.
Listening to my clients and site visitors via e-mail feedback and site
surveys was imperative for my success in business. Asking questions
like, “How can we improve?” and “What would you like to see us offer?”
allowed me to stay in touch and offer content and services that would
benefit my customers.
Bottom line: Focused research allowed me to produce sites that are not
just glamorized business cards, but sites that are highly visible and
give the visitor exactly what they are looking for. If I had known about
these tools available to me early on, I would have had the knowledge to
build my site to the needs and desires of my visitors in the first
place.
Kimberly Judd (kjudd@cybermarkint.com) heads up CyberMark
International, Inc., a full-service Internet marketing and advertising
firm. Judd serves as keynote speaker at numerous national Internet
marketing seminars, publishes articles for various high-profile trade
magazines and authors a monthly e-business column for the major
Southern California newspaper The Desert Sun.
JOHN MUNGER
PRINCIPAL Munger Chadwick, P.L.C.
Tucson
My biggest mistakes are invariably caused by a failure to follow my
“gut” instinct. It's tough to watch a competitor, for example, go on a
hiring spree when you think the market is headed downward. You wonder if
their corporate chiefs in some distant city know something you don't. In
most circumstances, I followed my instincts and refrained from
unwarranted expansion. But on at least one occasion I gave in, raised
our overhead, and spent the next year or so regretting it.
And I have learned to follow my instincts particularly when it comes to
determining whom to trust with responsibilities or discretion. This
applies not only to my employees and business partners but also in
identifying trustworthy political allies. On one occasion, for example,
a group of business and political friends met to talk about our concerns
that a newly elected official was proposing to employ a person who, in
his separate capacity as a public official, had repeatedly been
difficult to work with. The discussions were detailed in a group that
had met regularly, and theretofore, confidentially. I agreed to draft a
letter to the newly elected official, indicating our position regarding
his employment of the unfriendly other official. I circulated the draft
letter to all attendees from the meeting to obtain their thoughts and
approval.
Unfortunately, one of the attendees was not so trustworthy and sent the
draft letter to the unfriendly official, who reacted accordingly. I was
on his blacklist for years—all because I trusted the wrong person. On
reflection, I realized that I had not been entirely comfortable with
this person's presence, but I had not acted on my instincts because
everyone else seemed to trust her. Now I listen to my instincts,
regardless of what others think. Often, I find they have the same
concerns but have been afraid to say so.
Instincts develop from experience, and I find that, with more
experience, my instincts are better each year. One should always act
with conservative caution, but there are times when your best sense of
direction comes from instinct. Never disregard a definitive “gut check.”
John Munger originally founded the law firm of Munger Chadwick in
1977 as Munger & Munger, in partnership with his brother, Clark, who now
serves on the Superior Court Bench. A graduate of
Stanford University and the University of Arizona Law School, he is
listed in Best Lawyers in America and the Bar Registry of Pre-Eminent
Lawyers. His roots in Southern Arizona have led him to serve in such
prestigious organizations as the Arizona Board of Regents, the Tucson
Metropolitan Chamber of Commerce (chairman and member of the Board of
Directors), and the Southern Arizona Leadership Council.
MARK GORZEN
PRESIDENT & FOUNDER AZ Sites
Tempe
Doing too many things at once was our mistake, but ironically, that was
what kept us afloat while we tried to find our niche. When I started in
Web design, (circa '97) I had no idea what that niche was. I was simply
in the game for the design of it. One thing led to another and as my
business grew I found I needed to be able to offer Internet access,
hosting, programming, etc.—all the things people ask for once you design
a Web site for them. I had no background in—much less knowledge
of—setting up and then maintaining those services. As fast as the
Internet was growing I now had to research and somehow keep up with a
variety of technical challenges at once. Needless to say, the design
part of my business suffered while I raced to find the help necessary to
manage all my newfound technology.
The solution: With the fast pace of the Internet, tackling many avenues
at once is unavoidable to a certain extent. But to succeed, focus on
what you do best and create a niche for yourself. This will then afford
you the ability to surround yourself with others who specialize in what
you don't. Work hard, buy only what you need, oversee everything, and
pay yourself from the profits that good, quality service bring (design
and programming in our case).
If all this fails, put your money into a professional business plan
writer and venture capital finder, buy lots of equipment you don't
really need (this will impress your new investors who really have no
idea what you do), sell the company for a million-plus, give everyone
raises, work less hours, and when your dot-bomb implodes in about a
year, leave your customers hanging. I haven't tried this but I do help
out the customers left hanging by others. We plan on being around for a
while.
After a two-week stint on HTML during a class at Arizona State
University, Mark Gorzen (gorzen@azsites.com) started AZ Sites, some four
years ago—in his dining room. Standing in line during a computer lab at
ASU, someone in front of him asked a lab worker if he knew anyone who
could build a Web site…Gorzen stepped up and took his first design job
for $100. Soon after he was building sites for much more than that—and
Gorzen found himself building venture capital the old fashioned way. And
no one was happier to see him move his, then, three-person operation out
of his dining room and into a location on Mill Avenue than his wife.
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