Editor’s Note: This is a new Q&A series from StartUp Beat that features entrepreneurs who have successfully guided their startups (or multiple startups) to maturity. It is a complement to StartUp Beat’s coverage of early-stage startups and an effort to provide further insight into the experiences of tech entrepreneurs.
Bio: Robert Jordan has been launching and growing companies and helping other entrepreneurs do the same for the past 20 years. He is author of How They Did It: Billion Dollar Insights from the Heart of America (RedFlash Press), a collection of interviews from 45 leading founders who created $41 billion from scratch. His first startup, Online Access, landed on the Inc. 500 list of fastest growing companies. Jordan’s newest endeavors are RedFlash project implementation team, and interimCEOinterimCFO, a worldwide network of interim, contract and project executives. He blogs for Huffington Post, and has appeared on Good Morning America Money and ABC News, and been interviewed and quoted in such print and online media as Bloomberg Business Week, Forbes.com, Crain’s Chicago Business, and USA Today. Find out more at www.HowTheyDidIt.com.
SUB: What was your first entrepreneurial venture?
Jordan: I started Online Access, the first Internet coverage magazine, midway through business school; I dropped out of school as soon as the business plan was done. That was my first full-time company with investors and employees. Before that I dabbled. I started a coupon book in high school, kind of like a competitor to the Entertainment Coupon Book, just for companies around Chicago. And then when I started in B-school, the Chicago Cubs made it into the playoffs, and we created a version of the Trivial Pursuit board game, called Cubs Mania. Even though the Cubs lost in the 5th game (of course), we sold tens of thousands of games and that paid my tuition bills.
SUB: What prompted you to start Online Access?
Jordan: A fellow B-school student had just bought a brand-new PC and a modem and didn’t know whom to call. A light went on when he said that. I thought I’d launch something like a phone book. Remember, this was pre-Internet, so we were dealing with big online services like Dialog, Lexis-Nexis and CompuServe. There were thousands of databases accessible online, but no one was writing about them.
SUB: Was there a point at which you knew Online Access would hit it big?
Jordan: It took a long time for it to catch on. But when America Online decided to flood the US with 50 million disks a year, I thought things would heat up for us. And then our distributors started requesting that we produce hundreds of thousands of copies monthly for newsstand sales, and that was pretty exciting. Then some of our big advertisers, like AOL and CompuServe, started a bidding war over prime advertising space in Online Access…and that was nice.
SUB: Was there a “tipping point” (for lack of a better term) when Online Access really picked up steam and where it started growing exponentially?
Jordan: There was a pre-Internet moment when Prodigy finally launched, after $1 billion invested by IBM, Sears, and CBS, and after lots of years in development, and Prodigy decided to run full-page ads all across America educating everyone about going online. That was the first rising tide—and it lifted a lot of boats, including ours. We instantly saw more people buying Online Access and subscribing in record numbers. People wanted to know all about going online, and we were the only magazine on newsstands that could tell them. Of course the real tipping point was the launch of the World Wide Web—that was game-over in the good sense.
SUB: What were the first steps you took to establishing Online Access?
Jordan: I wrote a business plan with the help of seven other students, although I was already convinced, business plan or not, that I had to leave school and start the magazine. At the time it looked just plain nuts. I left the #1-rated business school to launch a company with no funding or team or anything. This was way before the Internet bubble, and you just didn’t do that. With business plan in hand I started knocking on investors’ doors for funding. There was no email at the time, so this meant a lot of phone calls. I also started looking at office space, which is funny, because it turned out that my future landlord was the reason I got to launch. A developer bought a landmark 1893 skyscraper in Chicago, and after I walked through, they asked me what I’d like my offices to look like. They were refurbishing the Monadnock Building from top to bottom after years of neglect, and I sketched something out. They called me 45 days later and said, “Your office is ready.” I was kind of shocked—I hadn’t signed a lease or even said anything about taking it! My space was on the top floor facing south, and it was beautiful, as if I had walked into the original building in 1893. I called my lead investor, and even though I hadn’t finished raising money, he said “go for it.” And I was in the game.
SUB: If you had it to do over again, what would the first concrete step to establishing Online Access have been?
Jordan: One thing we got right was to lock in our biggest and best advertiser early on, so I wouldn’t change that. If I were doing it all over again, I would have invested more in direct marketing to build a larger subscriber base. We fell in love with retail sales on the newsstand and with big advertiser programs—both great—but there would have been a better annuity stream from more subscribers.
SUB: What were the most significant obstacles to growing Online Access to maturity?
Jordan: When we started, most consumers had no clue what it meant to “go online” and that discovery process for most folks took years. This sounds obvious now in a world that is completely online and has been for a 15 years. At the time it was heavy lifting. I also made assumptions that were just plain wrong. Like assuming we would only be of interest to big advertisers if we had a 100,000 rate base. Totally unnecessary and money-draining. We just needed to show up, look great, and be credible to gain their trust.
SUB: What kinds of outside funding did you raise?
Jordan: I raised $450,000 from five individual investors.
SUB: What was the metric/milestone that indicated to you that Online Access had moved past startup stage?
Jordan: The original Online Access went bust after two years. I bought the rights out of bankruptcy court, went back to the vendors, advertisers and investors and started again. The restart was immediately profitable and stayed that way. The combination of profitability, having a capable management team that would take initiative and make decisions, and employing a staff to do most of the work—that’s past startup stage. Maybe another definition is that when you can take a vacation, and know that good decisions are being made without consulting you, your baby has grown past startup.
SUB: What were the most important lessons you learned about entrepreneurship while building Online Access?
Jordan: The first and biggest lesson was that my zeal and enthusiasm as founder was key. I don’t mean rah-rah stuff or jumping up and down. I mean the real core of your soul knowledge that you have to do what you are doing. It was the vital thing, the most important thing that employees and investors and customers had to see. On a practical level I thought my biggest challenges would be in making sales and designing product. Those were the tangible things I could picture in my dreams before launch. But they ended up not being the big challenge. For me the big enduring lesson was in learning how to lead people—employees, investors and customers. I came to realize I was just one piece of the puzzle, and that to be really effective and have a company that could accomplish amazing things, I had to form and lead a team, and that a great team would have people who could initiate action on their own.