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 experts 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.

We would be pleased to respond to further inquiries about our firm’s capabilities. We invite you to call or e-mail us at any time. Our general e-mail address is:

m-c@mungerchadwick.com