Zero to $1 Million
Ryan Allis founded iContact in 2002 after meeting his business partner Aaron Houghton at a meeting of the Carolina Entrepreneurship Club. Today, the Durham, N.C.-based firm is a venture capital-backed company with more than 80 employees and $11 million in annual sales.
In the nascent days of the company, Allis writes that the founder "lived in the office, slept on a futon.ate lots of Ramen noodles and jumped in dumpsters to get proof-of-purchase tags off of chair boxes for the $50 rebates at Staples."
Allis, 23, wrote "Zero to One Million, How I Built a Company to $1 Million in Sales, and How You Can, Too," to aid entrepreneurs in their start-up experiences. Following are highlights from our interview about his book, published last month.
SBB: You start off the book by explaining who you are - born in 1984 to the son of an Episcopalian priest from Pennsylvania and a social worker from England, although your parents aren't mentioned much in the book again. Did they influence or encourage you to become an entrepreneur?
Allis: What they did was they taught me to care about other people and helping other people. My mom taught me about personal finance. They didn't really encourage me to be an entrepreneur but to follow my dreams and do what I wanted to do. It was really my uncle Steve who was an entrepreneur that was a big influence. He runs a company called Stratus Computers which sells servers. He has been an entrepreneur for many years.
SBB: By the time you were 17, you had read three books that you said changed the direction of your life and got you out of a rut - "Rich Dad Poor Dad" by Robert Kiyosaki, "Think and Grow" by Napoleon Hill and "The Lexus and the Olive Tree" by Thomas Friedman. Are there any other books or papers that you've read since then that have had the same impact on you?
Allis: Those are still some of my top favorite books that helped me follow my dreams and passion. Other books I've enjoyed are "The End of Poverty" by Jeffrey Sachs, "Zero-to- IPO" [by David Smith], as well as a longer version of Rich Dad called the "Rich Dad's Guide to Investing." .When I was in a rut, I was disillusioned at the time and didn't understand what one young person could do to make a difference in the world. My economics teacher senior year of high school helped by exposing me to those books. And a business mentor - J.R. Rogers -- introduced me to a few of these books and taught me about entrepreneurship and taught me about what a young person could do to make a difference in the world.
SBB: You delve into your decision to go to school at the University of North Carolina in Chapel Hill and focus on the contacts you made and the courses you took as helping grow your business. Do you think your business would be as successful as it is today if you hadn't gone to college, considering the chapter begins with a quote from Microsoft founder Bill Gates who famously dropped out of school. Additionally, do you think going to school matured you emotionally as you weren't sure "you could survive the psychological stress of being 18 and not having a single friend younger than 27."
Allis: I would say that the two years of college at UNC certainly did allow me to mature in many ways.and it was through the university I met my partner [Aaron Houghton]. My company wouldn't exist if it wasn't for that meeting. I learned how to learn and to build relationships. Those skills enabled me to have a much greater success.
SBB: That said, in the interviews you conducted for this book, you asked entrepreneurs "what traits are the most important for an aspiring entrepreneur?" The least important attribute was "a college degree."
Allis: While I do believe going to college was extremely beneficial to me, I didn't finish college. I went to UNC for two years. I did the same thing that many successful entrepreneurs do, which is to go to college for a couple of years and then leave to get a business launched. It's not that a college degree was unimportant. I one day hope to be able to go to the Harvard Business School and get an MBA. Long term, I'm interested in politics and public service. One day I would like to serve in public office. Someday I would like to be a senator.
SBB: A lot of people have the perception that an entrepreneur is someone who flies solo and is on a quest to achieve his or her goals, but you repeatedly rank high the ability of an entrepreneur to build a high quality team.
Allis: It really comes back to what one's goals are when building a company. Many entrepreneurs and small business owners want to create a lifestyle business where they will make $50,000 or $100,000 a year. Other entrepreneurs want to build and grow firms that will be larger and someday maybe take a company public or get acquired. One does have to hire great people and people that are smarter than they might be in their particular area. When we started iContact we knew we wanted to build a large company. We now have 85 employees. We hire people who are smarter than us - they are more experienced. It's extremely difficult for many entrepreneurs who want to control everything.I think a key sort of rule of thumb is - is your business making money while you sleep? That's when you've created a true business and not just a job.
SBB: You write that your core motivation is that 2.7 billion people in the world, or 42 percent of the world's population, live on under $2 a day while more than 49,000 - mostly children - die daily in developing countries from disease and starvation.
Allis: We donate 1 percent of our quarterly payroll to 15 nonprofits organizations. I also personally started the Humanity Campaign which works to reduce poverty. It's on the Web at Humanitycampaign.org. You can't just make money in business especially if you're in a service industry - you have to help people to make money. Businesses that integrate corporate social responsibility into what they do create positive change.and build stronger societies and stronger communities. In early stages when a firm isn't making a profit, it can be very difficult to give. What we used to do was donate 1 percent of our profits, but when we raised venture capital we ended up not being profitable so we had to change that to 1 percent of that payroll. As a company succeeds, they should think about how they can be a socially responsible corporate citizen.
SBB: You didn't write a full-fledged business plan for iContact until 2003. Do you recommend business plans for aspiring entrepreneurs today?
Allis: What I recommend is taking time to seriously think about your business idea and determine if it's a real business opportunity. I talk in the book about the MAR (market, advantages, return) model. It's important to put an idea through that to determine an opportunity. I do not believe an entrepreneur initially needs a long, formal business plan unless they're trying to go out and raise capital. I encourage them to take the time to write an operations or marketing plan that's maybe about five or 10 pages. What I don't like to see happen is early stage entrepreneurs find themselves stuck in paralysis/analysis by spending nine or 10 months fine-tuning the plan. There's often an excuse in one's head - I'm working on the plan therefore I must be working on the business. But keep the plan as a live document that grows as you do.It should never be a barrier to getting started, only a helpful guide.
SBB: Your book is sort of an aspiring entrepreneur's "how-to" manual tackling everything from how to write a mission statement and what to expect when looking for venture capital funding to the importance of getting picked up by online search engines. Are there any particular sections you'd have liked to spend more time on?
Allis: When I wrote the book it was 320 pages. (The book is 274 pages) As happens with an editor, it gets pared down. I wanted to spend a little more time on how the system of entrepreneurship works. It talks a lot about the competitive market economy. We made the decision to look at steps on how to build a company rather than to focus on how to become an entrepreneur. My passion really today is marketing and growing businesses. I hope to write a follow up to the book in a couple of years. Maybe we can call it "Zero to 100 Million."
SBB: You mentioned that you would like to hold public office. What would you hope to accomplish?
Allis: What I really care about is creating stronger communities and stronger societies.I believe there should be equality of opportunity, like any child should have access to healthcare, education and technology. I want to dedicate my life to that.
SBB: Is there anything else you would like to add?
Allis: I would encourage aspiring entrepreneurs to have a bias toward action. It often takes five years to really get a business started. It's my hope that "Zero to One Million" can be a guide to doing that.
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