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Author: Steve Hendershot

Posted on January 23, 2012August 8, 2018

For Young Entrepreneurs, It’s All Work, All Play—and It’s All Good

Tech entrepreneurs C. J. Przybyl and Amanda Thompson keep pretty standard 9-to-5 hours. That is, they return to their Lake Zurich, Illinois, townhouse around 9 each weeknight and then take the Metra back into Chicago at 5 each morning. Whoever gets to the station first in the evening buys beer for the trip, but that hardly means the workday is over—the couple pass time on the train by talking shop.

Przybyl, 29, is chief financial officer of BodyShopBids Inc., a tech startup that raised $1 million in venture capital this month, an investment led by Chicago-based New World Ventures. Thompson, 28, is an account manager at Groupon Inc. Both work at 600 W. Chicago Ave. (BodyShopBids is housed at Lightbank Inc., a tech incubator founded by Groupon co-founders Eric Lefkofsky and Brad Keywell.)

Those aren’t necessarily the jobs they discuss on the train. They’re just as likely to work on the fledging email-related business that they have undertaken with two partners. In fact, that startup also is likely to occupy their time at home, both during their scarce weeknight hours and on weekends. Neither of them minds a bit.

“It’s fun and refreshing, in a bizarre way,” Thompson says.

Entrepreneurs “can’t help it,” Przybyl says. “You’re always thinking of something.”

Many of Chicago’s other tech entrepreneurs feel the same way, working long hours and then socializing with other entrepreneurs at venues such as the Motel Bar (in Przybyl’s and Thompson’s Chicago Avenue building), or Technori Unwind, a Friday afternoon happy hour that changes its location weekly to preserve its secrecy. (It’s only for techies.)

The city’s tech scene is growing as more prospective entrepreneurs try to replicate the success of local tech companies such as Groupon, GrubHub Inc. and Orbitz Worldwide Inc.

In the old days, “entrepreneurship could be very lonely,” according to Seth Kravitz, co-founder of Technori LLC, which publishes an entrepreneurship webzine, and the founder and organizer of the Unwind events. Now that their numbers are reaching critical mass and the allure of launching a startup is reaching fever pitch, tech entrepreneurs “are building a sense of community,” Kravitz, 29, says. “We can feel like we’re part of something.”

A January edition of Unwind at the Paris Club in River North attracted about 60 people, a collection of tech business leaders that was approximately three-fourths male and two-thirds twentysomethings, clustered under a stairwell in their tech-biz uniforms (V-neck sweaters and jeans). The event is supposed to be purely social, with no soliciting allowed and smartphone use discouraged, but neither limit is too realistic for this crowd. For instance, it didn’t keep a venture capitalist from inquiring of Przybyl about investing in BodyShopBids without even knowing what the business did.

The line between collaboration, networking and just hanging out is destined to blur at these events because entrepreneurs love talking about building their businesses. Developing ideas is a 24/7 hobby for them, which might explain why they enjoy one another’s company so much.

“It’s a lifestyle of problem-solving,” says Philip Tadros, 32, who owns Chicago-based web-design and creative agency Doejo LLC, as well as several coffee shops where techies congregate, including Noble Tree Cafe in Lincoln Park. (He is launching another, called Bow & Truss, in partnership with Technori’s Mr. Kravitz, that is slated to open this spring.)

“My personality is so trained toward launching businesses and solving problems that it’s hard to meet somebody and have them not want that,” Tadros says.

Tadros, however, has been at the business of entrepreneurship long enough to see value in establishing some boundaries. Where his lifestyle once involved work, grabbing a drink with co-workers, a few hours’ sleep and then back to work, he now aims to at least periodically disengage. He says he’s found that his projects have benefited as a result.

Entrepreneur Justin Massa, 33, encountered the same sort of crossroads in 2010 when his daughter was born. The CEO of Food Genius Inc., which helps hungry diners find the dishes they crave, knew he would have to give up going out for drinks with fellow techies several nights a week, then heading home to continue working. His solution was perhaps predictable for an entrepreneur: He created Urban Geek Drinks, a monthly meet-up at Villains Bar & Grill in the South Loop for his friends in the tech and public-policy communities. His gatherings average about 80 attendees.

“These are smart people who think very hard on very big problems, and it’s fun to talk about how they’re solving them,” Massa says. “But I’m insanely busy, and I don’t have as much time to spend with them as I would like, so I figured I would try to make them come to me.”

Massa’s shifting priorities aren’t unique to tech entrepreneurs. Still, the value he finds in continuing to socialize with techies outside of work is classically entrepreneurial, according to Raman Chadha, executive director of DePaul University’s Coleman Entrepreneurship Center.

“Nobody really gets what you’re going through as an entrepreneur except other entrepreneurs, and that can be a challenging emotional struggle,” he says. Chadha also sees maturity in the breadth of Massa’s gatherings: “As entrepreneurs become more seasoned and are running bigger businesses, they start to appreciate the value of different sectors much more.”

Sometimes tech entrepreneurs even leave tech to create startups in other sectors. Chuck Templeton still chairs GrubHub’s board of directors, but the 43-year-old founder of San Francisco-based restaurant reservation site OpenTable Inc. has turned his entrepreneurial focus toward sustainability issues, launching two websites focused on conservation, OhSoWe.com and Chicago REgen.com, and remodeling his house in hopes of making it energy-neutral. He limits his time away from his wife and two children to one night a week (which, once a month, is devoted to a charity poker game with fellow tech entrepreneurs such as Cleversafe Inc.’s Chris Gladwin and Viewpoints Network LLC’s Matt Moog).

Yet, even when Templeton is dining with his family, he has trouble turning off his entrepreneurial impulses.

“I’m constantly evaluating things like, ‘Why is this place using wooden chopsticks? Why aren’t they using reusable chopsticks?’ ” he says. “My wife will say, ‘Shut up.’ I’m way down the extreme on those issues; she’s only halfway down, and sometimes it boils over.”

Przybyl and Thompson can relate. The difference is that, when it comes to starting businesses, they’re both hooked.

“We’ll be out to dinner with people, someone will say something, and one of us will get an epiphany,” Thompson says. “You look at the other person and ask, ‘Has no one thought of this (business idea) yet?’ And the wheels start turning. We’re a good team, and (the process) is ingrained.”

Przybyl and Thompson have known one another since 1999, when both attended high school in suburban Geneva; they have been together since 2002. They’re planning to get married, but what comes first, the wedding or the email startup?

“Wow, I don’t know,” says Thompson, deferring to Przybyl.

“Probably the startup,” he says, after a pause.

Filed by Crain’s Chicago Business, a sister publication of Workforce Management. To comment, email editors@workforce.com.

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Posted on August 19, 2010August 9, 2018

Employers Are Still ‘in the Driver’s Seat’ on Pay and Benefits

Creativity and entrepreneurship go hand in hand, so it’s no surprise that small-business owners often seek innovative solutions.


For example, an entrepreneur might want to hire more employees but would rather not incur the expense of additional salaries. That seems like an either/or proposition, but some are finding that they can have it both ways thanks to an unlikely ally—the recession.


The unemployment rate is still high, which “puts you in the driver’s seat,” says Mark Schwartz, CEO of Lake Zurich, Illinois-based Product Development Technologies Inc., a product design firm. “It’s like buying a house. If you’re a cash buyer in this market, you have a lot of clout and can get a better house than you could otherwise afford. Well, it’s the same thing for employers.”


Schwartz and other employers are finding a pool of talented job seekers who are not only willing to work for lower salaries, but are increasingly agreeable to compensation terms that allow companies to limit their risk. Job candidates are jumping at offers whether they are performance-based, incentive-laden contracts for salespeople, compensation packages that offer equity to employees of all levels or temp-to-hire arrangements. In the process, they’re landing serious talent.


“The people we’ve hired lately, they’ve all been superstars. It’s really remarkable,” says Schwartz, who instituted a temp-to-hire program for the first time in PDT’s history. Of the 13 people hired since November—a 10 percent increase in the company’s workforce—eight came through the temp-to-hire program.


“Normally, when the market is tighter and pickings are slim, you don’t get people this strong. To me, that’s evidence that the recession went pretty deep—companies were cutting really good employees, not just the bottom ones.”


PDT isn’t the only company using temp-to-hire to stretch its capacity without committing to hiring full-time staff. Technisource Inc., an information technology staffing firm, has seen a spike in the volume of temporary employee and outsourcing requests it receives from small-business clients over the last six months.


“It’s a typical entrepreneurial type of strategy. Our small-business customers are concerned and cautious, but they’re also looking for an opportunity for growth,” says Taz Stephens, regional managing director at Technisource, based in Fort Lauderdale, Florida.


The temp model doesn’t work for all businesses, so some have offered an ownership share in the company, a concept close to the heart of an entrepreneur. Libertyville, Illinois-based Forcelogix Inc., which sells software that helps businesses manage sales operations, grew to 12 employees from seven in 2009; it offered a stake in the company to the five people it hired last year.


It will do the same for the three to four hires CEO Patrick Stakenas expects to make in 2010. Forcelogix launched in 2005 and went public on the Toronto Stock Exchange last year.


“We brought people in for [salaries] that were sometimes lower than what you might expect to see in the marketplace, but we were able to offset that with equity in the company,” Stakenas says. “When the market is slow, or people are concerned about the business itself, you need incentives to offset the wages they would have made in a better economy. We were able to do that and keep our expenses low.”


When and if the economy improves, entrepreneurs might not find as much top-quality talent willing to work under creative compensation arrangements. For now, though, they are capitalizing on one of the few advantages afforded by the recession.


Workforce Management Online, August 2010 — Register Now!

Posted on August 9, 2010August 9, 2018

For Startups, Often the Only Option in a Recession Is to Keep on Hiring

For plenty of entrepreneurs, surviving the recession is accomplishment enough. But those who launched startups shortly before or during the recession can’t be content merely to struggle through. They have to grow, often quickly.


Hiring a team can be a perilous process for these startups because they don’t have a track record to rely on in projecting either the revenue needed to pay new employees or the business demand that the additional hires would help meet.


Those factors are always important considerations for new companies, but the soft economy and dearth of investment capital have trimmed the margin of error even more.


“We’ve rolled the dice,” says Bryan Johnson, CEO of Braintree Payment Solutions, a Bartlett, Illinois-based credit card processing firm launched in 2007. “We hired knowing that we were vulnerable, that if we were to lose customers, [the added expense] would really hurt.”


Braintree hasn’t received any external funding, so even though the company turned profitable in 2008 and has remained so through the recession, each new hire has given Johnson pause. At the same time, business has been growing. Revenue climbed 420 percent last year (Braintree declines to disclose dollar amounts), and the company has had to add employees—in now has a staff of 20—to keep up.


“The hiring pace has been pretty aggressive because we’ve had to keep up with demand,” Johnson says. “So far that’s paid off, and we’ve been able to pay people with the cash flow we have and also to deliver what we need to deliver.”


Even well-capitalized startups are more cautious about hiring during a recession because they are wary of demand. Matt Moog raised $5 million to launch Viewpoints Networks in 2006 but limited staff to a dozen until the company, which builds consumer review Web sites, turned profitable in 2009.


“We were growing incredibly rapidly [in 2009] but still took a conservative approach initially because we wanted to make sure that this new business was really there. We wanted to allow demand to build before we hired people to meet it,” Moog says.


He added 40 employees last year, accelerating that pace when Viewpoints began licensing its service to create proprietary consumer networking sites for companies including Hoffman Estates, Illinois-based Sears Holdings Corp. He has added 20 more people so far this year, bringing total headcount to about 60, and has subcontracted for offshore software development.


“This year we’re taking a more proactive approach, hiring ahead of the curve in anticipation of more demand. We’re still doing that while making sure that we are profitable and growing, but it’s more aggressive.”


The cautious approach is wise, at least for now, according to Miles Kierson, president of Kierson Consulting, a management consulting firm based in Arlington Heights, Illinois. Two of his clients recently considered making significant hires or purchases in anticipation of increased demand, and in both cases the prospective business didn’t materialize.


“People are nervous, and they ought to be,” Kierson says. “Two years ago, you wouldn’t even think that it was risky to grow, at least a little bit. Now it’s risky, because nobody knows what’s going to happen. Every day there’s good news and bad news about the economy, and for the most part it doesn’t really look like there’s much change.”


He advises businesses to bet on new hires only if there’s enough cash on hand to bear the added expense and survive a surprising, immediate downturn in revenue.


Johnson, Braintree’s CEO, agrees—he’s just glad his hiring gamble paid off.


“We certainly could have gone a slower route, or raised capital or built a cushion in case something went wrong,” he says. “But we made good decisions that have worked out for us, and everything has gone our way.”


Workforce Management Online, August 2010 — Register Now!


 

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