Tag Archives: Nashville

Microsoft Office Moves to the Web

Microsoft Office, the backbone of many a small business, is getting an Internet makeover. Starting with the next upgrade, Office, the popular office productivity suite including Outlook, Excel, PowerPoint, and OneNote will be available as individual Web-based applications that can be accessed using several types of browsers and just about any kind of computing devices that can log onto the Internet. The upgrade is called Office Web Applications. Microsoft unveiled it at a developers’ conference in October and was expected to begin offering limited private technology previews before the end of 2008 before a beta release sometime in 2009. The company has not disclosed when the programs will be widely available. The apps will be “lite” versions of standard Office programs that will be heavy on the features people want when they’re working on the Internet, such as the ability to share documents, says Chris Bryant, Microsoft’s Office group product manager. The apps will let people create, edit and collaborate on documents through the browser. Apps will work with Internet Explorer, Firefox, and Safari browsers. Microsoft is still testing the programs’ ability to work with Chrome, the new browser from Google, Bryant says. Good news for small business The changes come as Microsoft makes more of its business software available on the Internet, or “in the cloud” as it’s coming to be called. It’s about time, says Scott Kozicki, a contract CIO and long-time IT professional who lives in Nashville, Tenn. “Our lives have been completely transformed” by the Internet, Kozicki says. “Whether it’s cell phones, digital video recorders, or laptops, it’s everywhere. A lot of the thinking about storing data on a machine is rooted in the 70s version of the PC and we’re so far beyond that. I think this is Microsoft waking up to that concept.” When it comes to Web-based apps, Microsoft is following competitors like Google, which acquired or created its own office productivity programs like Gmail and Google Docs as Web apps from the get go and has gained a wide following as a result. But Microsoft still owns the bulk of the office productivity software market. By the company’s own reckoning, between 500 million and 600 million people worldwide use Office, making it the most popular office productivity tool anywhere. According to a September poll by ReadWriteWeb, the technology news blog, 49 percent of 2,600 respondents use Microsoft Word as their main writing program compared with 16 percent who use OpenOffice, an open source word processing program, and 15 percent who use Google Docs. Playing catch up with Google Although Google has a head start in the Web apps department, the programs leave enough to be desired that Microsoft can catch up, says Ralph Barbagallo, a Valencia, Calif., game designer and Microsoft software user. “If Microsoft can release a good Web version of Office while it’s still the gold standard they have a shot,” Bargagallo says. “Of course, finding a way to make money from them is the challenge.” Microsoft’s move to Web apps is significant for small businesses, especially companies that are too small to maintain much of an IT staff, says Bryant, the Office group product manager. “Microsoft’s software plus services strategy can help those people who are self-managing their IT because it’s partly off loading some of that burden to us,” he said. Web apps can also help small businesses by putting them on the same technological footing as bigger business partners. “You don’t necessarily have to know what version the person on the other end of the line is using” to collaborate, he says. According to Bryant, the Office group product manager, business customers will buy Office Web apps through the same type of licensing agreements they use to purchase other Microsoft software. Individual consumers and solo entrepreneurs will be able to choose from some advertising-sponsored free apps and some subscription-based services, both of which will be offered through Microsoft’s Office Live portal. Businesses that want to participate in the Office Web private technology preview can sign up at the Office Live Workspace.

Gift Guide: For the Road

For ‘Pod People The iFM radio and remote control ($49) by Griffin Technology brings FM broadcasts to the iPod. The unit, which looks like a mini iPod Mini, plugs into the iPod’s headphone jack to play and, should the occasion call for it, record FM radio. Speak into the unit and record memos, too. Or just use the iFM as a remote control. Nashville-based Griffin Technology, founded by Paul Griffin, makes an array of gadgets and accessories for iPods and Apple computers. The company designs each device in-house and sells them at Target, Best Buy, and other stores. www.griffintechnology.com Pink Lady Made of canvas with gingham and pink leather accents, Keri Golf’s Jane bag ($375) will stand out among the competition even if your swing doesn’t. Despite its cotton-candy color scheme, the bag is built tough and is both stain and water resistant. Keri Murschell began developing her line of women’s golf bags and accessories in 2003, after watching a segment of Oprah about following dreams. She quit her sales job at a technology consulting firm and started her own business. Each of the styles produced by her Haddonfield, N.J.-based company reflect Murschell’s personal taste. Many of the golf bags and accessories are covered with pastel fabrics and polka dots or bright stripes. www.kerigolf.com Rockin’ Clock Skullcandy’s Macguyver wristwatch ($300) is an MP3 player with a USB-port connector hidden in its wristband. The watch can play both WMAs and MP3s and store a gigabyte of computer files of any type. It can also record digital voice memos. Skullcandy founder Rick Alden says the ski slopes near the company’s Park City, Utah, headquarters inspired his creative team to design an MP3 player that wouldn’t fall and break when things got a little rough. www.skullcandy.com Kiddie Mobile Parents reluctant to give children full responsibility for a cell phone may like this one from Chicago-based Firefly Mobile ($99). The phones, created by company founder Don Duebler, allow parents to restrict outgoing and incoming calls to certain numbers. The phones come with 30 minutes of talk time. Firefly sells additional prepaid minutes for 25 cents each. www.fireflymobile.com Authors To Go About the size of a deck of playing cards, Playaway self-playing audio books (about $35 each) come with headphones and work without any downloading or juggling of multiple CDs. Christopher Celeste, founder of Findaway in Chagrin Falls, Ohio, launched the Playaway line this October. Forty titles, by authors ranging from Jim Collins to David Sedaris, are available now at Borders bookstores in airports. Soon, Celeste plans to make a Playaway series for tourists, with audio guides to various locales. www.playawaydigital.com

Gift Guide: For the Road

For ‘Pod People The iFM radio and remote control ($49) by Griffin Technology brings FM broadcasts to the iPod. The unit, which looks like a mini iPod Mini, plugs into the iPod’s headphone jack to play and, should the occasion call for it, record FM radio. Speak into the unit and record memos, too. Or just use the iFM as a remote control. Nashville-based Griffin Technology, founded by Paul Griffin, makes an array of gadgets and accessories for iPods and Apple computers. The company designs each device in-house and sells them at Target, Best Buy, and other stores. www.griffintechnology.com Pink Lady Made of canvas with gingham and pink leather accents, Keri Golf’s Jane bag ($375) will stand out among the competition even if your swing doesn’t. Despite its cotton-candy color scheme, the bag is built tough and is both stain and water resistant. Keri Murschell began developing her line of women’s golf bags and accessories in 2003, after watching a segment of Oprah about following dreams. She quit her sales job at a technology consulting firm and started her own business. Each of the styles produced by her Haddonfield, N.J.-based company reflect Murschell’s personal taste. Many of the golf bags and accessories are covered with pastel fabrics and polka dots or bright stripes. www.kerigolf.com Rockin’ Clock Skullcandy’s Macguyver wristwatch ($300) is an MP3 player with a USB-port connector hidden in its wristband. The watch can play both WMAs and MP3s and store a gigabyte of computer files of any type. It can also record digital voice memos. Skullcandy founder Rick Alden says the ski slopes near the company’s Park City, Utah, headquarters inspired his creative team to design an MP3 player that wouldn’t fall and break when things got a little rough. www.skullcandy.com Kiddie Mobile Parents reluctant to give children full responsibility for a cell phone may like this one from Chicago-based Firefly Mobile ($99). The phones, created by company founder Don Duebler, allow parents to restrict outgoing and incoming calls to certain numbers. The phones come with 30 minutes of talk time. Firefly sells additional prepaid minutes for 25 cents each. www.fireflymobile.com Authors To Go About the size of a deck of playing cards, Playaway self-playing audio books (about $35 each) come with headphones and work without any downloading or juggling of multiple CDs. Christopher Celeste, founder of Findaway in Chagrin Falls, Ohio, launched the Playaway line this October. Forty titles, by authors ranging from Jim Collins to David Sedaris, are available now at Borders bookstores in airports. Soon, Celeste plans to make a Playaway series for tourists, with audio guides to various locales. www.playawaydigital.com

The 2001 Inc Web Awards: Winners

The 2001 Inc Web Awards General Excellence Winner All-Outdoors Whitewater Rafting www.aorafting.com First place, Customer Service Second place, ROI Marketing finalist Honorable Mention Nova Cruz Products LLC www.xootr.com First place, Design Third place, Marketing ROI finalist Customer Service First place All-Outdoors Whitewater Rafting www.aorafting.com Second place Cadkey Corp. www.cadkey.com Third place Street Glow Inc. www.streetglow.com Design First place Nova Cruz Products LLC www.xootr.com Second place TidalWire Inc. www.tidalwire.com Third place Mosca www.moscahome.com Management (intranets and extranets*) First place Sunbelt Business Brokers Network Inc. www.sunbeltnetwork.com Second place National Services Group www.nationalservicesgroup.com Third place SLP Capital www.slpcapital.com Marketing First place Merriman Capital Management www.fundadvice.com Second place Earth Treks Inc. www.earthtreksclimbing.com Third place Nova Cruz Products LLC www.xootr.com ROI First place Ipswitch Inc. www.ipswitch.com Second place All-Outdoors Whitewater Rafting www.aorafting.com Third place The Connoisseur.cc Ltd. www.low-carb.com Sole Proprietors First place Limelight www.limelightart.com Second place Somerset Estate Sales www.somerset-estate-sales.com Third place Restaurant Connection Inc. www.restaurantstaffing.com *Management awards are given for Web sites that are password protected, so the URLs are only for the companies’ general sites. How the 2001 Inc Web Awards winners were selected: Earlier this year, 800 small businesses applied online for the 2001 Inc Web Awards. Using an Internet-based judging site, members of the Inc editorial staff screened all applications, eliminating ineligible entries and selecting finalists in six categories: Customer Service, Design, Management (intranets and extranets), Marketing, Return on Investment (ROI), and Sole Proprietors. We then had outside judges (listed on facing page) review the Web sites and submit comments and recommendations. Based on the judges’ input, Inc selected the winners. The Judges Ryan Bernard is president of Wordmark Associates Inc., in Houston, and the author of The Corporate Intranet. Mary E. Boone is the president of Boone Associates, in Norwalk, Conn., and author of Managing Inter@ctively: ExecutingBusiness Strategy, Improving Communication, and Creating a Knowledge-Sharing Culture. Bonny Brown is director of research at Vividence Corp., in San Mateo, Calif. Erik Brynjolfsson is codirector of the Center for eBusiness@MIT at the Sloan School of Management, Massachusetts Institute of Technology, in Cambridge, Mass. Michelle Chambers is the president and founder of New Tilt, in Somerville, Mass. Larry Chase is a New York-based marketing consultant, author of Essential Business Tactics for the Net, and publisher or Web Digest for Marketers in New York City. Steve Crummey is the cofounder and chairman of Intranets.com Inc., in Woburn, Mass. Bill Demas is an executive vice-president of Vividence Corp., in San Mateo, Calif. Paul Edwards is a self-employment consultant and the coauthor of Home-Based Business for Dummies. He is based in Pine Mountain Club, Calif. Martin T. Focazio is the CEO of Martin T. Focazio LLC, in Upper Black Eddy, Pa., and author of The e-Factor. Jeffrey Harkness is the cofounder of Diesel Design in San Francisco and the host of CNet’s monthly Design Talk radio program. John Hartnett is the CEO and president of BlueMissile, in Minneapolis. Randy J. Hinrichs is the group research manager in Learning Sciences and Technology, Microsoft Research, Microsoft Corp., in Redmond, Wash., and the author of Intranets: What’s the Bottom Line? Donna L. Hoffman is a professor of management, director of the electronic commerce concentration, and codirector of the eLab at the Owen Graduate School of Management, Vanderbilt University, in Nashville. Peter Kent is president of Top Floor Publishing, in Lakewood, Colo., and the author of Poor Richard’s Web Site. Michael P. Largey is the executive vice-president of IT Web Solutions Inc., in West Long Branch, N.J. Terri Lonier is the president of Working Solo Inc., a consulting firm in San Francisco, and the author of Working Solo: The Real Guide to Freedom & Financial Success with Your Own Business. Harley Manning is a research director at Forrester Research Inc. in Cambridge, Mass. Jakob Nielsen is a principal at Nielsen Norman Group, in Fremont, Calif., and the author of Designing Web Usability. Richard W. Oliver is a professor of management at Owen Graduate School of Management, Vanderbilt University, in Nashville. Don Peppers and Martha Rogers are founding partners of Peppers and Rogers Group, in Norwalk, Conn., and the coauthors of One to One B2B. Patricia B. Seybold is CEO of Patricia Seybold Group Inc., in Boston, and the author of Customers.com: How to Create A Profitable Business Strategy for the Internet & Beyond and The Customer Revolution. Beerud Sheth is the cofounder and general manager of eLance Inc., in Sunnyvale, Calif. James Slavet is the cofounder of Guru Inc., in San Francisco. Robert Spiegel is the author of The Shoestring Entrepreneur’s Guide to the Best Home-Based Businesses. He lives in Albuquerque. Phil Terry is the CEO of Creative Good Inc., in New York City. Mark C. Thompson is chairman and CEO of Network Public Broadcasting International Inc., in San Francisco, and chairman of Integration Associates Inc., in Mountain View, Calif. Bruce D. Weinberg is an associate professor of marketing and E-commerce at McCallum Graduate School of Business, Bentley College, in Waltham, Mass. Marcia Yudkin is the Boston-based author of Poor Richard’s Web Site Marketing Makeover and other Internet marketing guides. Ron Zemke is the president of Performance Research Associates Inc., in Minneapolis, and coauthor of E-Service: 24 Ways to Keep Your Customers When the Competition is Just a Click Away and other books. The 2001 Inc Web Awards The Best Small-Business Sites in America The 2001 Inc Web Awards: Winners A Web Strategy Runs Through It Traffic Magnets Duh-sign of the Times Home Groan Many Happy Returns Please e-mail your comments to editors@inc.com.

A Soloist’s Nightmare

Managing Technology Independent contractors often can’t diagnose their own computer ills. And a sick system can leave a soloist’s business on life support Beverly Samaniego was in a stone-cold panic. “I couldn’t sleep. I was sick to my stomach,” says Samaniego, who runs a nurse-education consulting company out of her home in Elk Grove, Calif. The cause of her distress? Losing all the data on her brand-new handheld. One day this past April, Samaniego had spent five hours loading customer information into the database on her handheld with the help of the software vendor’s support person, who was located 3,000 miles away. Then the system crashed — leaving a string of indecipherable error messages in its wake. It was almost more than Samaniego could bear. Computer problems are no fun for anyone anytime. But when they strike a sole proprietor or a two- or three-person operation, PC woes can threaten the very existence of the business. Most soloists assume that they are too small to get the attention of a “real” com- puter consultant — and most don’t have the budget for in-house tech support. Soloists have traditionally relied on phone support provided by their vendors — which can be spotty at best — and on friends and family. Once the warranty runs out, vendors charge hefty fees for support, even if in the end they aren’t able to solve the problem. Long waits on hold can dissolve into finger-pointing. But take heart: there are better ways for soloists and small companies to get the support they need. Systems integrators and other computer consulting companies have long done their work at the office buildings of their Fortune 500 clients. But independent contractors have usually had to schlepp broken machines to computer-repair shops; house calls were unheard of. Until recently, that is. The boom in home-based work has resulted in a new crop of consulting businesses that provide IT support — including house calls — to independent contractors and other small companies. The businesses provide a range of on-site services, from repairing broken machines to providing software fixes, networking advice, and even application training. The hourly rates for such services range from about $70 to $130. Some companies, such as Virtex Networks of Atlanta, provide subscription IT services that can run upwards of $100 per person per month. Cyber hand-holding During the past few years, Anita Bailey, principal at Bailey Marketing Communications, in Nashville, has noticed a huge jump in the number of companies that offer on-site computer services. “The landscape for computer resources in my city has changed simply because there are more independent business owners that need support these days,” she says. Many of the new companies, such as PC on Call and SOHO Computer Pros, are more focused on the needs of small-business owners than their larger counterparts have ever been. Case in point: My Home Tech of Rancho Cordova, Calif. According to founder and co-owner Darren Hans Bobella, the eight-person start-up handles any type of computer hardware or software problem at any location (at the client’s home or office or at My Home Tech’s facilities). Bobella maintains that although large IT-services companies are reluctant to visit home offices, his company isn’t. “Your typical small-business owner is working like a dog. It’s a 24-hour job for them. They have IT needs just like a big company,” he says. My Home Tech offers its services seven days a week, until 8 p.m. most nights. The company hands out its emergency phone number to repeat customers and offers them round-the-clock service. And it provides something many soloists need but never get: one-on-one instruction. In essence, companies like Bobella’s are designed to hold the hands of small-business owners who typically don’t know where to turn for affordable technology assistance. For fees ranging from $40 for one-shot deals, like installing a hard drive, to $70 an hour for diagnoses and advice, My Home Tech professionals accompany owners on computer shopping trips, act as consumer advocates when equipment fails, and sketch out technology road maps. In her desperation last April, Beverly Samaniego contacted My Home Tech, which had recently been profiled in the business section of the Sacramento Bee. She reached Bobella, who pledged to come to her house early the next morning to straighten out the problems. Samaniego was thrilled. Previously, when she had experienced a problem with her Mac or her PC, she had had to unplug the offending component and take it into a local computer-repair shop. The idea of having someone come to her was a “total joy,” she says. The next day Bobella determined that Samaniego needed to install a single computer platform and blend her three customer databases into one. “He told me I was working harder than I needed to because my equipment wasn’t networked,” she says. Together, Bobella and Samaniego worked out an integration path aimed at helping to improve her operations. Besides moving some applications from the Mac to the PC, which is now her sole platform, Bobella advised her on exactly what else she needed to buy and even went with her to the store. Says Samaniego, “I need advice. My business works, but I’m not a techie. I run on instinct.” Digital intervention Computer support arrived with almost transcendental timing for Carrie Reber, who is the sole proprietor of a marketing-communications business in a suburb of Columbus, Ohio. One night, during a thunderstorm, Reber heard a loud noise — “like a crack of thunder” — come from her office. “I ran in there and found that my modem didn’t work anymore,” she says. (She had a surge protector for her computer but not for her modem.) The next morning, Reber was leaving the house when she noticed a van driving by with the words “PC on Call” painted on the side. It seemed like a message from above. “They came out and replaced the modem with one that was faster and better the next day,” she says. She paid “a couple hundred” dollars for the timely service. Reber had chanced upon a new type of regional company designed from the ground up to serve the home-based and small-business market. In 1997, in response to the growing need for on-site service, Steve Pollak had started Cincinnati-based PC on Call and outfitted its technicians with mobile “computer labs” — retrofitted vans in which, the company claims, workers can build up to three new computers from scratch. Pollak had been helping his friends with their home computers, says marketing director Kevin Boothe, and “it got to the point where he had to keep parts in his car to keep up with the demand.” PC on Call now operates in seven cities and plans to expand in the near future. The service was well worth the money, says Reber, especially since the technician discovered a completely empty disk drive on her computer. “I thought I was running out of disk space and would have to get a new computer. He informed me it was just sitting there, waiting to be used,” she says. Support for penny-pinchers If you need computer support but must do it truly on the cheap, take a page out of Shel Horowitz’s book. Horowitz, the author of four books on the topic of frugality, is a master of free computer support. An early adopter of the Macintosh, Horowitz relies on a Macintosh-related Internet newsgroup. The list’s participants take care of most of his support needs, gratis. “Just the other day, I asked how I could change the default E-mail client on Internet Explorer [from Outlook Express] to Eudora. I got a quick, good answer from the people on the list in under 24 hours,” says Horowitz, who lives in Hadley, Mass. The king of cost-effectiveness, Horowitz also recommends buying computer equipment from stores or mail-order houses that offer free support (if only for a limited time). Beverly Samaniego is not worried about the warranty on her new handheld running out. These days she sleeps well at night, secure in the knowledge that if her computer breaks down, Darren Hans Bobella will come to her rescue and fix it. Says Samaniego, “I totally love this man.” Lauren Gibbons Paul is a freelance writer based in Waban, Mass. Good Questions Before you hire the company you hope will be your on-site savior, ask these questions: Do you make house calls? Do you guarantee that you’ll arrive within a certain window of time? If I have to bring my machine to you, will you repair it yourself or send it elsewhere? How long will it take? Do you guarantee a rapid return? Are you available during emergencies, in person or by phone? How do you charge? By subscription or flat rate (per problem, or what the company may call an “incident”) or with a mix of flat-rate fees and per-hour charges for diagnoses and advice? If you don’t solve my problem, will you still charge me for the visit? (Some small companies don’t charge you unless they heal your ailing system; others charge a fee to arrive at your doorstep.) Are your staffers certified? If they are, which software programs are they trained to use? Do you offer one-on-one training? If you do, in which applications? Please e-mail your comments to editors@inc.com.

E-Tailing By The Numbers

realbusiness.com The Scorekeepers What’s the key to successful online sales? First you find a great niche. Then you set rigorous numerical standards and stick to them Company: Shoebuy.com, in Boston What it does: Sells shoes online Number of employees: 8 Conventional wisdom: Everybody knows that E-tailing is dead. Just read the papers. Unconventional wisdom: Executed well, the E-tailing model can yield healthy profits. Revenue growth: $1.8 million in 2000; more than $30 million projected for 2001 Profit profile: Founded in April 1999, the company first turned a profit in January 2001. Capital: Start-up investment of $200,000 in personal funds; $2.3 million from angel investors Selling shoes online. It’s the kind of business you’d expect to be the brainchild of a fashion maven with a closet full of Manolo Blahniks. But Scott Savitz and Craig Starble couldn’t care less about shoes. What turned the two investment bankers on to peddling oxfords online was the opportunity to use their quantitative skills to test whether E-tailing could really work. In early 1999, Savitz and Starble were working at BankBoston (now Fleet Bank). Starble, now 38, was managing global treasury funds, while Savitz, 32, specialized in individual investments. Investment bankers, says Savitz, take a “very formularized approach to recognizing value in any opportunity,” adding that he himself was always conservative with his clients’ funds. “We never went for home runs,” he says. “We aimed more for singles.” As the pair witnessed all the start-up activity in E-tailing, they decided to take a shot at it themselves. But what exactly would they sell? At the time it seemed as if almost everything that you could conceivably sell online was already being sold there. But no one appeared to be selling shoes over the Internet, at least not in any major way. Which, of course, made them wonder why. Would consumers buy shoes without trying them on first? “Until about the fall of 2000 we tried to talk ourselves out of doing Shoebuy,” says Savitz. “But the more we did the numbers, the more it made sense.” What made particular sense to them was that the people who were already buying $2.5 billion worth of shoes through mail-order catalogs would almost certainly be open to shopping for them online. As Savitz and Starble made their calculations, they came to believe they had uncovered what Savitz calls “a hidden gem.” It seemed that if shoes were sold right, they could bring in extraordinarily healthy profits. Typical shoe retailers, says Savitz, start with about a 100% markup, but that usually whittles down to a 3.5% net margin after they deduct all their costs. Savitz and Starble were determined to eliminate as many of those costs as possible. To entice potentially reluctant shoppers, they decided to offer free shipping. But even after subtracting that cost and salaries for customer-service, technical, and business-development personnel, they were left with a staggering — albeit still theoretical — 30% net profit. Savitz was determined to maintain that 30%, which to him meant that the company would have no sales force, no inventory, no warehouse, and as few employees as possible. It would be, in other words, a virtual organization. “The virtual company was supposed to be the promise of the Internet,” says Savitz, “but somehow that got lost for a lot of people along the way.” Maintaining a warehouse and inventory would erode their precious margin by 18 points. Moreover, says Savitz, by holding inventory Shoebuy would incur the exposure to loss from radically changing trends in footwear. Adding a sales staff would cost the company another 10%. For that reason, Savitz says, he has no plans to add to his staff of eight at any time soon. “We just have to make sure we never spend more than our model will allow,” he says. “Otherwise it won’t work.” Armed with what they saw as a terrific market potential and the chance to land some hefty margins, the partners set out to use their quantitative skills to manipulate those numbers to their advantage. The number that in the end would matter most: the lowest customer-acquisition cost possible. One afternoon last fall, Savitz sat at a folding table in Shoebuy’s modest corporate office in Boston’s financial district, animatedly describing his passion for keeping customer-acquisition costs low. He briskly rattled off a series of well-known online players and the average amounts he had estimated that they spent to snag a single sale: Amazon, $103; Bluefly.com used to be $245 but got it down to $58. And the now-defunct Garden.com, Pets.com, and Furniture.com had struggled along at $71, $200, and $500, respectively. Savitz wouldn’t allow Shoebuy’s figure to rise above $15. He chose to keep marketing costs low by establishing alliances with shopping sites and striking customer-share deals with highly focused E-tailers. He also scored a cobranding coup: Shoebuy was featured prominently in a MasterCard ad that appeared in fall and winter 2000 issues of Bon AppÉtit, Martha Stewart Living, and Gourmet magazines, among others. The ad didn’t cost Shoebuy anything up front, although customers received a discount by using Master-Card for their Shoebuy purchases. The other number that would make or break Shoebuy would be what Savitz calls the company’s “fulfillment metric” — how fast manufacturers could get their shoes to Shoebuy’s customers. But before he could determine what that number should be, Savitz had to persuade manufacturers to drop-ship shoes from their own warehouses. Typically, shoe manufacturers receive shipments from overseas factories in large crates, which they then ship to retailers. To work with Shoebuy, vendors must set up a consumer-direct fulfillment system from scratch, a process Savitz says has been arduous at best. Even after Savitz signs up a vendor to sell its shoes through Shoebuy, it can take up to six months to get its product on the site. Mike Kormos, president of Footwear Consulting Group, in Nashville, says it’s no surprise that Shoebuy has met with resistance. For one, he says, manufacturers fear channel conflict. More important, says Kormos, is the traditional, hidebound nature of the footwear industry. “There’s typically a lethargy in adopting new technology,” he says. Savitz says that manufacturers have gradually embraced the Shoebuy concept. One thing that’s worked in Shoebuy’s favor has been the attraction of one-stop shopping. “It’s hard to make money on the Web when you’re only selling a single brand,” says Savitz. But what really convinced manufacturers of Shoebuy’s value, says Savitz, was their own botched E-tailing efforts. “Some companies have tried selling online on their own,” he says. “And they’ve seen what a costly procedure it is, from building the site to installing in-house customer service. It actually becomes a losing proposition for them.” Savitz admits that launching the company would have been a lot easier if it had maintained its own inventory. “But then you start taking away all the things that make our business model so appealing,” he says. Under its current system, Shoebuy can offer a selection of products that would have been impossible if the company had kept its own inventory. The arrangement is also good for cash flow. “We don’t pay for shoes until after we sell them,” says Savitz. Savitz believes that Shoebuy’s cash-flow advantage explains why the company is still around and onetime competitors like MyFavoriteShoe.com aren’t. “They immediately went out and put good names on the site, signed deals with the Bruno Maglis, and bought a boatload of inventory,” he says. From Savitz’s perspective, that approach was flawed. Even if the folks at MyFavoriteShoe had perfectly forecast their prospective customers’ buying patterns, they still would have tied up their cash for six or seven months while they waited for their inventory to sell. Shoebuy takes on a limited number of each new manufacturer’s products on a trial basis. Companies that sign on with Shoebuy agree to ship shoes within an average of three to five days after an order has been placed. “We can’t explain to the customer that it wasn’t us; the manufacturer screwed up,” says Savitz. He and Starble monitor each manufacturer’s sales history, and unless a particular style meets their sales expectations, it comes off the site. Given Savitz and Starble’s careful calculations, Shoebuy’s 2001 revenue projection seems jarring: somewhere north of $30 million, up from $1.8 million in 2000. How can the founders justify such a “hockey stick” trend line? “We’re in a very scalable position,” says Savitz. “We have a large market with virtually no competition and more than $60 million in ‘inventory’ available on the site. We have the infrastructure to sell at that rate, but we don’t have the actual inventory risk.” Savitz admits that if the company stays at its current run rate, 2001 revenues will be closer to $4 million. “But we went up over 100% from third to fourth quarter 2000 without hiring anyone, and that momentum hasn’t stopped,” he says. But for the company to make those projections, will Savitz and Starble need to seek additional outside funding? “No, but we probably will anyway,” says Savitz, “because the environment is so good for acquisition targets.” Possible candidates might sell similar or complementary items that Shoebuy could roll into its model and scale up appropriately. “But we will never hold inventory, and you can quote me on that,” emphasizes Savitz. “I can’t see that we’d ever go against our model or abandon the metrics we’ve established.” With no fanfare and little venture money, the companies profiled here are delivering real stuff to paying customers and making a buck in the process. There may not be any “new rules,” but there are rules, and we suspect every one of them will look familiar. DVD Empire: The Bootstrapper SitStay.com: The Mom-and-Pop Shoebuy.com: The Scorekeepers Accuship.com: The Traditionalist Fashionmall.com: The Conservative Healthcommunities.com: The Underwriter Commentary E-tailing Intermediaries The Markets Please e-mail your comments to editors@inc.com.

Cutting the Cord

Environment Wireless workplaces save time and money, and promote mobility — but they can create new headaches as well Mike Bouissey already works on the top floor of a seven-story building in Philadelphia’s Center City. But on warm, sunny days, he slips his notebook computer under his arm and heads up one more flight. Whenever weather permits, Bouissey, a project manager for Web-design company WebLinc, works on the building’s flat, asphalt-topped roof. He’s never out of touch. He forwards calls from his desk to his cell phone, and — although there’s not a cord or a cable in sight — he remains logged on to the company’s local area network (LAN), using radio waves rather than wires. He can send and receive E-mail, build Web pages, track his team’s progress, and do anything else he’d do downstairs in the office, all while sitting on a blanket in the sun. His only limitation: he must stick close to one of three domed skylights so that his computer can stay in touch with the network’s base station downstairs. Beyond that, he’s set — at least as long as his 2.5-pound Sony PictureBook’s batteries last. “If you can be outside, why not?” says Bouissey, who hasn’t noticed any slowdown in performance — either his own or that of his computer — since he began working wirelessly. “You can get away and still be connected.” “We’ll actually be able to have meetings on the roof and be tied into the network,’ says WebLinc CEO Darren Hill. He’s planning to build a rooftop deck, complete with a juice bar, power outlets, and patio furniture. Bouissey’s bosses not only indulge his wanderlust, they encourage it. This summer the company plans to build a 2,000-square-foot elevated rooftop deck, complete with a juice bar, power outlets, and patio furniture. That will let Bouissey and others work atop the 150-year-old former toy factory more comfortably (and have a better view of the Philly skyline over the brick safety walls). “We’ll actually be able to have meetings with clients on the roof and be tied into the network,” says CEO Darren C. Hill. But working without wires isn’t just a warm-weather perk for outdoor enthusiasts like Bouissey and Hill. About two-thirds of WebLinc’s 45 staffers use wireless laptop computers full-time inside the company’s 12,000-square-foot headquarters. So do most of the eight employees at financial-insurance company SuretyBond.com, a start-up that subleases a corner of WebLinc’s office space and shares its LAN. The payoff, according to devotees at both companies: true in-house mobility. People can work almost anyplace they want — not just where the wires are. Whether they’re at their desks or gathered around conference tables or lounging on rec-room couches, both companies’ wireless users are always online — either on WebLinc’s in-house network or on the Web. There’s no running back and forth to desktop computers, no logging off one machine and on to another, no hunting around for an available phone jack. From anywhere on (or in Bouissey’s case, above) the seventh floor, users just open their computers and sign on once. They then can access files, print documents, write reports, create or run presentations, check E-mail, chat in real time, do research, and, in some cases, even update their customers’ Web sites. They can also access the network with wireless handheld computers or Web-enabled phones. Hill says that going mobile makes sense for fluid, fast-growing companies like his own, which went from 3 full-time employees in 1998 to 20 in early 2000 to nearly 50 today. As WebLinc — whose customers include Crayola and Urban Outfitters — expands, it’s easy to get new employees up and running: they just sit somewhere, turn on their newly issued notebooks, and get to work. “We don’t have to run any new wires; all you need is an outlet,” Hill says. WebLinc, like many other companies, often shuffles people around as it expands. From a technology standpoint, moving is no big deal with a wireless network: workers can just pack up their little computers and go. Finally, if a machine crashes or needs service, the luckless owner just carries it over to the closest information-systems staffer and swaps it for a new one. “I can’t imagine going back to the old way,” says SuretyBond.com executive vice-president and chief operating officer Chad Rosenberg, who’s so sold on no-wire networks that he has set one up for his computers at home. “This is just too convenient.” Whether they’re at their desks or at company conference tables or lounging on rec-room couches, both companies’ wireless users are always online. WebLinc and SuretyBond.com are among a growing number of small businesses that are embracing the wireless workplace with the fervor of converts to a new religion. While no one’s keeping a company-by-company count, wireless LAN sales overall should more than triple in the next 18 months, growing from $624 million in 1999 to $3 billion in 2002, according to market research by the Cahners In-Stat Group. And while wired office complexes were until recently the real estate rage (see “High-Wired Competition,” Inc. Technology, No. 4, 2000), their wireless descendants are beginning to steal the spotlight today. In Seattle a developer is constructing a new building with no wiring for technology or telephone service, for instance; tenants — mostly high-tech businesses to start out — will arrange for their own wireless service. While everybody mentions the system’s mobility first, pioneers insist that their wire-free LANs save money, too. True, laptop computers often cost more up front than their deskbound counterparts. But other no-wire network hardware costs far less. Minerva Tantoco Hobbs, director of eTechnology for Miami-based consulting firm Answerthink, says companies can expect to spend less than $1,000 for a wireless-network hub, plus $100 to $200 for the plug-in cards that older laptops need to communicate with the base station. (Although it’s possible to convert desktop computers using the same cards, there’s usually no advantage in going that route because full-size machines aren’t designed for easy portability. So companies currently without notebook computers would, of course, need to add in the cost of buying them. However, many new notebooks from Apple, Dell, IBM, Acer, Sony, and other vendors now come with built-in wireless capability.) In addition, wire-free companies save on every foot of cable they don’t use, every piece of hardware they don’t buy, and every hour of labor they don’t spend installing, upgrading, maintaining, or moving computers — especially when those changes involve tearing out walls, ceilings, or floors. “It literally takes 10 minutes to put a wireless-network card in a computer and get it configured,” Hill says. “Compare that with the man-hours you need to run a wire through drywall.” In WebLinc’s case, the costs of going wireless included buying three AirPort base stations at about $300 each and some 20 plug-in cards at $99 to $150 each, depending on the type of computer involved. In general, switching requires little or no training: untethered users work on the same network as everyone else; they just connect to it differently. However, wireless technology has limits that many companies may find unacceptable. Most available systems won’t let users wander more than 150 feet from the base station, which works like a cellular-telephone tower, connecting individual users to the network. And there can be side effects. After installing its wireless LAN, WebLinc had to buy new telephones because all its cordless models operated on the same frequency as the computer network, causing unbearable static during calls. Like any true believers, executives in wire-free workplaces seem convinced they’re just the first of many who will find the path to enlightenment. Like many other innovations, the no-wire environment began on college campuses. In the past couple of years, at least a dozen schools, ranging from tiny Mount St. Mary College, in Newburgh, N.Y., to the Owen Graduate School of Management at Vanderbilt University, in Nashville, have gone wireless. Students, faculty, and staff at those schools can log on to their networks from anywhere on campus. The colleges like the convenience of wireless networking. Beyond that it helps cut the phone-line congestion caused by hundreds of students dialing into the Internet simultaneously. Early on, most businesses didn’t have the patience for wireless systems, which, at best, moved data at about one-fifth the speed of normal networks. But thanks to recent advancements (see “Going Mobile,” below), wireless data now moves at a respectable 10 or 11 megabits per second, about the same speed as wired connections provide. Meanwhile, costs for wireless-network cards dropped from as much as $600 two years ago to generally less than $200 today. With speed and cost issues resolved, businesses began to see advantages to going wireless. Some adopted wireless LANs as a way to quickly expand their existing networks. Others went 100% wireless. Veritel Corp., in Chicago, which makes voice-verification technology, expanded from 6 to 32 employees last year and expects to reach 80 this year. Instead of rewiring its offices for each new staffer, the company opted to use an all-wireless network from CenterBeam, allowing employees to move around inside the building. Besides, “creativity at your desk is kind of an oxymoron,” says Veritel CEO Christopher Tomes. “This allows you to take your technology into whatever space you choose.” The movement isn’t limited to high-tech companies either. Hospitals, factories, warehouses, stores, car-rental agencies, and other businesses are converting to wireless LANs, too. (See “Where the Wires Aren’t,” below.) At Blueprint Ventures, in San Francisco, all 10 employees switched to a wireless LAN last year. General partner Bart Schachter credits the change with streamlining the venture-capital firm’s meetings. “We can pick up and go to a conference room, and it’s like we never left our desks. You don’t know until you have wireless access how often somebody says ‘Oh, what’s the answer to this question?’ and you can look it up right there,” says Schachter, whose company has invested in MobileStar and other wireless technologies. “You can take notes right there. You don’t have to go back to your office and type them in. Productivity goes up 1,000%.” And at West Coast Office Interiors Superstore, in Santa Clara, Calif., employees can move freely through showrooms and offices, checking inventory, placing orders, and printing out receipts and invoices. The company’s CenterBeam network helps salespeople close deals on the spot, instead of taking up to a week to complete paperwork. With all the benefits of going wireless, are transactions as secure as they would be traveling through wires and cables? Early adopters insist their wireless LANs are at least as secure as traditional hard-wired networks, but even true believers worry about the potential threat from letting sensitive information literally float around. WebLinc’s Hill says that if he were running a financial company instead of a Web-design firm, he wouldn’t use a wireless network. As he puts it, “All security can be broken.” But in the case of his own company, he’s confident that information is as secure as it needs to be. “People can tap into any network, wired or wireless,” says Pete Privateer, president of Pelican Security, a computer-crime-prevention company in Chantilly, Va. Theoretically, hackers can infiltrate a wireless LAN from outside the building, just as they can break into a traditional network over the Internet or telephone lines. (However, they couldn’t be too far outside the building, given the technology’s maximum radius of 150 feet and its inability to penetrate the building’s brick walls.) But, Privateer and others say, the newer wireless technologies — the same ones that enable high-speed access — can be set to encrypt information so that only authorized users can decode it. “If there’s encryption, the hacker won’t get anything but garbage and won’t be able to pick anything out of it,” Privateer says. He also suggests that companies adopt systems in which employees must change their password every time they log in. That measure, combined with encrypting every transmission, may frustrate some users. But such precautions can help companies like WebLinc ensure that the only people who are looking into their computer systems from the outside are their own employees, sunbathing on the roof. Like all true believers, executives in wire-free workplaces seem convinced they’re just the first of many who will find the path to enlightenment. “In 5 to 10 years, I think the world will be wireless,” says Schachter, pointing out that other countries, including the Philippines, Finland, and Japan, already lead the United States in widespread adoption of the technology. “We don’t have to dream the future,” he says. “The future is happening.” Where the Wires Aren’t … If there’s still any doubt that wireless networking is about to go mainstream, consider this: Starbucks plans to offer wire-free Internet access in 2,100 of its 3,000 North American coffee shops within two years. In November 2000, desktop king Bill Gates introduced a prototype of the Tablet, the first Microsoft wireless computer, to much fanfare at the Comdex trade show; the device was among thousands of hot new wireless products dominating the event. Wayport Inc., in Austin, increasingly offers wireless access in airports, hotels, resorts, and conference centers; the service lets business travelers hop online without hunting for a phone line. And in the Over-the-Rhine neighborhood in downtown Cincinnati, a dozen start-up companies share a single high-speed wireless network, creating, in essence, a virtual business community. Going Mobile If you’re thinking about switching to a wireless network, you need to know about Wi-Fi. Also known by the less-friendly designation IEEE 802.11b, Wi-Fi — for wireless fidelity — refers to the newest technical standard for wireless networking. The standard boosts networking speed from sluggish — 2Mb, or 2 million bits of information per second — to supercharged at 11Mb per second. That allows wireless networks to run faster than traditional Ethernet networks, which top out at 10Mb. And that’s why businesses everywhere are suddenly interested in Wi-Fi. (Don’t confuse Wi-Fi with the much-publicized Bluetooth standard, which permits only short-range radio links between small personal devices like handheld computers and cell phones.) The Wireless Ethernet Compatibility Alliance, a high-tech industry group, awards Wi-Fi certification to wireless-networking products that meet its standards. For more information, visit www.wi-fi.org. Please e-mail your comments to editors@inc.com.