You’re never too young (or old) to open shop

It all started when I made a random, spur of the moment decision (as I often do) to study abroad in Spain. But I didn’t want to be in some party town environ where I wouldn’t learn Spanish, so I unwittingly chose the Basque Country, San Sebastian to be specific. I was immediately rapt by the culture, the language and the whole concept of Hillary’s “global village”. I thought, like Farley’s “Tommy Boy” Callahan, that I could show this world a thing or two. Ahh yes, but how?

I returned to finish my senior year at the University of Richmond in Virginia, then worked for a year as the Marketing Manager of a small Internet startup, Trainingforce.com. Within twelve months, I’d convinced my family to pull up stakes from their rural Pennsylvania home and join me in Costa Rica. Surprisingly, they headed out before I knew it and there was no going back. I resigned, packed my things, sold my crappy Dodge Neon and took the flight South, not knowing then it would be one of hundreds of such flights.

I had a business plan in mind when I arrived in San Jose, Costa Rica way back in 1998. I just wasn’t entirely sure it would work. Back then Yahoo was still King of Search and I liked their model of owning the media, then buying up businesses that made sense. This was still in the days where the Internet was a giant mystery, before the dot-com guys had explored and made a ruin of nearly every concept possible to deliver online. I thought I’d just build myself a little directory, organize the local web and possibly consult to the few businesses in Costa Rica who actually had websites.

And so I did. The first site I ever built is still running, Costaricapages.com. I met some very interesting characters who purchased ads on my site. I still remember the very first check I received for $289 from Eric Michaud of Drake Bay Wilderness Resort. Those were happy days as I showed my old man, who made me slave in his hardware store from the age of 10, how a point and a click could net me nearly three Ben Franklins. I’m still not sure if he was proud or peeved.

About a year of menial website development and attempting to build a portal with not-so-dependable 28.8 dial up connection, my family headed back to Pennsylvania and I made the big, scary move into my own digs in the college suburb of San Pedro. I worked night and day in my boxer shorts to pay the bills and grow my little network of info sites. Some months later, while doing some SEO work for a thankless, grumpy old man who had a travel agency site, I had an epiphany — I should be in the travel biz.

My roommate at the time was teaching English. His mother had worked in travel. He was also anal rententive, which played well to my penchant for playing the cards fast and loose. He’s Felix to my Oscar. In my over simplified biz modeling brain, I thought I would build the site, he’d sell vacations. It worked…boy did it work. We launched Costa Rican Vacations , a web-based travel agency dedicated to luxury, custom trips to Costa Rica. Sure, we got more than a little lucky by betting that travel to Costa Rica would eventually go high end. We new we couldn’t compete in any other niche.

We made plenty of mistakes at startup, from charging clients less than the vacations actually cost to investing in cheap and unreliable phone gear. But with a cheapskate mentality, night and day work and free marketing via my old directory site, we grew. Two staff became four, then eight, then 32. Today, seven years later, we’re a multi-million dollar business with a subsidiary office (from which I type) in Panama.

We’ve diversified into owning our own Villas and rental Condos. Sure, we have had growing pains and interpersonal issues, legal woes, financial boot strapping and so forth. But it’s been worth every ounce of sweat and every dollar poorly spent. We’re still not playing golf and surfing all day yet, but the business has begun to look more like the mature Internet businesses I admire and less like two college guys working to pay for weekend beer benders. Sometimes I long for those days though, I admit.

But I’ve become utterly long-winded…here’s the real meat of this post.

THINGS WE DID WRONG:

1. Lack of Focus — as we grew, we tried to get into businesses we simply shouldn’t have. We at times got caught up in chasing business that just wasn’t profitable.

2. Too Many People — Because labor is so affordable in Costa Rica, there were times when we just threw bodies at work instead of re-examining the work itself. We got smart a few years ago and invested more heavily into technology, but are still chiseling away at bottlenecks we created ourselves.

3. Hire Expensive Management — We thought we could get out of the daily grind by hiring high paid management, but it just killed our bottom line and they didn’t do things as well as we did. In reality, it was our fault and not theirs, because we just didn’t have the strategic indicators or technology in place to really measure and improve.

4. Listen (too much) to Employees — This sounds like a terrible thing to say, but at times we worried too much about our old employees and felt more loyal to them than to the needs of the business. This is the really hard part about being an owner. Sometimes you need to do things that may hurt personal relationships even though they’re essential to the biz. Long and short - you can’t please everybody.

5. Retain Bad Employees Too Long — So much easier said than done, but it is absolutely crucial to give slackers the boot. We were too kind in the early days to non-producers and didn’t have great systems in place to justify fast dismissals. Today the rules are clear, the training is good and we bring in new blood as frequently as needed.

We made plenty of bonehead moves in all phases of the biz and continue to do so. What we have done however, is correct those mistakes quickly enough to avoid any disasters.

THINGS WE DID RIGHT:

1. Choose The Right Partner — My business partner Tony and I are polar opposites. On paper, you’d never expect the two of us to survive together long, but in reality, I’m not sure either of us would last long without the other. I’m creative, decisive and a little crazy. Tony’s predictable, methodical and conservative. Melded together, we might actually serve as a CEO somewhere. But how would that look at shareholder meetings?

2. Choose The Right Biz — We picked a business we really enjoyed, with cool perks and customers to whom we could relate. We also saw the trends from years of consulting and had more than a hunch that it could work.

3. Know Your Market — Again, thanks to our time consulting and studying the trends of our info network visitors, we got to know our market before we entered. We continue to study them and poll our own customers to know the trends.

4. Commit To A Strategy — We chose to be the Internet guys and focus on wealthy customers by offering great service. All these years on, it’s still the same model and we won’t deviate.

5. Serve The Customer — Whenever push comes to shove in our decision making, we do our best to make the customer happy over our immediate bottom line.

6. Be A Meiser — We were notoriously cheap in our startup efforts on everything EXCEPT pay. We paid our sales team better than anybody and still do.

7. Tie Yourself to Success — Tony and I don’ t make a whole lotta dough unless the biz does great. By staying tied to the biz, we stayed engaged every day.

8. Invest in Technology — Although it’s easy to get lulled into a paper and pencil slumber in a developing nation thanks to cheap labor, it ends up becoming a management nightmare. After a few years of pencil pushing, we finally got wise and dumped some major jingo into a great internal operations system. This was built, ironically, by my former technology boss in Virginia. My only regret was not starting sooner.

CONCLUSION

I don’t think we made any single brilliant stroke to enjoy the minor success we have to date. I honestly think that a lot of other entrepreneurs could have done it. But what I’ve noticed over time that it’s not a matter of being ABLE to do it, it’s a question of guts, determination, timing and the loyalty to the cause and the core group involved.

I can’t claim that we have the perfect biz or that I have the perfect life. But whenever I’m in the swimming pool at some $500 a night resort overlooking Costa Rica’s blue Pacific, I still feel like some 14 year old kid who won the lotto.

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Filed under: Business on March 20th, 2008