Be Your Own Master

The dot-com boom is deader than disco, but the entrepreneurial spirit that drove it is alive and well. Half-baked Internet schemes don't cut it anymore--you'll need more than a catchy domain name this time round--but the Net and other high-tech fields remain a rich breeding ground for entrepreneurs, with plenty of opportunities for people who want to be their own boss. Being an entrepreneur these days is "really different from what it was three years ago, and remarkably similar to what it was six or seven years ago," says Prof. Steven Kaplan, director of the entrepreneurship program at the University of Chicago Graduate School of Business. For one thing, investors aren't throwing money around like confetti. If you want to get beyond simple freelancing and do more than fly solo from your favorite table at--Starbucks, you've got to have a legitimate business plan, Kaplan says. "No matter how great your idea is, make sure there are customers who want what you offer and will buy it."

And get yourself a good coffee machine, too. Some things never change, and whether it's just you and your spouse or you and 50 employees, keeping a business alive and thriving requires long hours and a taste for cold pizza--especially at the beginning. Herewith: four success stories from the frontier.

Burch LaPrade never really bought into the dot-com madness. There was something in the air, for sure, but it just didn't smell right to the skeptical LaPrade. "People definite-ly got too excited," he recalls. "They thought the Internet was going to change everything and create businesses and create value where none really existed." LaPrade, now 31, had a more mundane view. "I think the Internet has amazing capacities to do some very unglamorous things," he says, "like reduce costs and improve customer service." Today LaPrade heads brightroom, a small but growing event-photography business that combines digital photography and the Internet. People who run in marathons or participate in large corporate events can see (and buy) pictures of themselves on brightroom's Web site, rather than wait for weeks of processing, sorting and mailing. It may not sound sexy, but it works. "This is just rethinking a business that's been around," says LaPrade. The Internet eliminates the mailing costs, while the digital technology reduces labor costs and increases productivity (the company can do more events).

For CEO LaPrade and his partners, the scariest part of starting brightroom was also crucial to their early success--quitting their jobs at a software company. Investors want to know that you are committed, that it's your life, not just a hobby, explains Sol Kanthack, 31, brightroom's president. "At some point it's the only way you can get anybody to take you seriously," he says. "When you can say, 'I've cashed out my 401(k), I've quit my job and here's what I'm doing,' that's a lot more convincing than 'I want you to invest, but I'm not going to put my own money into it, but I will spend my free nights and weekends on it'."

Though he started his business, Coremetrics, in the go-go year of 1999, Brett Hurt defied the times and followed the classic entrepreneurial pattern--he saw an actual need and he filled it. Hurt, 30, was selling nutritional products on the Net, but he was frustrated by the limitations of the existing software for collecting data about his customers. So Hurt, who started programming at 7, created his own "Web analytics" application to capture and analyze the behavior of visitors to his site. The program tracks detailed customer habits, gathering such data as which ads brought them to the site and which items they put in their shopping carts and later discarded. After getting wows for the program from friends in e-commerce, Hurt realized he had a moneymaker and created Coremetrics. He's raised $53 million so far and currently has 50 employees. His clients include Wal-Mart, CompUSA and Ann Taylor. There has been some turbulence. At one point Hurt had 100 employeees, but had to cut back in early 2001. And at the very beginning, he joined forces with some--one he later realized was the wrong person. Hurt learned a crucial lesson: a big company won't go under because of one bad hire, but a start-up might. "If you are starting your own business and you hire someone and they're not ethical, or their heart isn't in it or they're not of the same frame of mind as you, it can crush your business."

It was their desire to produce innovative videogames that drove Seamus Blackley, Gene Mauro, Kevin Bachus and Mark Hood to set up their own shop, Capital Entertainment Group. "I have an incredible deep love of games and of what the medium can become," says Blackley, one of the developers of Microsoft's Xbox. "And I just feel like I need to push with every fiber of my being to make that happen." Blackley, 33, is one of the stars of the industry. Like many in the field, he's concerned that the large, publicly held companies that dominate the business aren't daring enough when it comes to developing new games. So he and his partners are in the process of raising money (with a goal of $35 million) to fund new games and fill the creativity gap. It's another classic model of entrepreneurship--major players from a field, with serious reputations and connections, teaming up to pursue a common dream.

Blackley downplays the company's potential clout. "We're not doing this to change the industry," he says. But Mauro, also 33, is clear about his ambition. He compares Capital Entertainment to Miramax, the film-production company. Capital's plan is to find the best designers, help them develop the best games (at a cost of about $4 million to $5 million each, he says) and then take the games, still under construction, to the big companies. "They play a couple of levels and then they commit at that point to a marketing and distribution deal," explains Mauro. The company currently has two titles going into preproduction.

Even if your dream is to create something decidedly un-techy, like a day-care center for dogs, for example, tech is still the name of the game. No modern entrepreneur can function--without PDAs, mobile phones, laptops and an array of small-business software. Jackie Schwanberg, the founder of Doggy Day Care, a Milwaukee company with a name that speaks for itself, did much of her initial research into the economics of pet care on the Internet, used Excel spreadsheets to create her business plan and depends on a variety of technologies to keep her business growing. Schwanberg, 38, started the company in 1997 with just a single employee. She now has three locations and 40 employees and takes care of 110 dogs each day. She maintains a Web site, which she updates often with digital photos of the dogs so their owners can see how they're doing. (Her customers want her to install Webcams in her facilities, but Schwanberg doesn't think the quality of the images is worth the expense. She's waiting for the technology to improve.) She also handles the payroll and taxes herself using QuickBooks. "Before computers, people were paying an accountant or everything went in a shoe box, and then at the end of the year it was, 'Gee, how did we do?' I can put my finger on the pulse of my business in two seconds," she says. A friend developed a software program to keep track of all the pets, including their medical histories, their diets, even the condition of their stools. Schwanberg also uses a desktop-publishing program to produce a newsletter for her customers.

The newest symbol of Schwanberg's success is a 10,000-square-foot building she had designed and built. The new facility is a testament to her determination and her faith in herself and her idea. When the banks turned her down because she couldn't produce hard numbers to support her business plan, Schwanberg trusted her gut and plowed ahead. All the dog people she knew, and she knew a lot of them, told her it was a great idea. So she took a chance. "I just did a home-equity loan," she recalls. "I put the house on the line and said, 'OK, I'll do it myself'." Spoken like a true entrepreneur.