How can a company with no business plan, no offices, and no track record become a multi-million dollar business? That's exactly what I asked Rosalind Resnick, who took her company, NetCreations, from a two-person home based startup in 1995 to a public company generating $58 million in sales. She recently addressed a group of internet entrepreneurs at an iBreakfast meeting I attended. After listening to the program director, Alan Brody, give a short introduction about her, I knew I needed to find out more, so I asked her for an interview. She graciously accepted, and I've posted the details below.
Where did you get the idea to start an email marketing company?
NetCreations started out as a Web design firm in 1995. Pretty quickly, we began to see that our clients needed more than just cool Web sites – they needed a way to get people there. We pioneered opt-in email marketing as a way to connect marketers with the consumers and business people who wanted more information about their products and services but didn’t want to waste time surfing the Web trying to find them.
Did you have a business plan?
No. We didn’t have a formal business plan until our company went public.
How much money did you start out with, and where did it come from?
We started with $1,000. My partner and I contributed the capital.
What did you use the money for?
The money was just to open our bank account. My partner was a Web designer and programmer who worked at our local ISP [internet service provider] so he had the technical skills that we needed. I was a journalist who had just written a book about doing business on the Internet so I did the sales and p.r. and brought in the clients.
What happened after that? How did the company get sooo successful in such a short time? Did you ever imagine it would grow as much as it did?
Our big break came when a circulation manager from Ziff-Davis tested our lists in the fall of 1996 and got a response far better than anything he’d ever achieved through postal mail or telemarketing. Once we realized that we were in the direct marketing business and that companies like Ziff-Davis needed to be able to mail to millions of names in thousands of different categories, we started putting together a partner network of high-traffic Web sites to build our database.
What were the most crucial factors that helped your company achieve success?
Building a partner network of Web sites that sent email addresses to our database and partnering with list brokers, ad agencies and resellers to market our lists to Fortune 1000 clients
What mistakes do you see startups making the most?
Failure to plan. While some companies fail because they lack capital, many more startups go under because their founders lack management experience or because their business models don’t add up.
What advice do you give your startup clients?
Don’t be afraid to try new things and make mistakes. As long as you learn from your mistakes, you’ll be all right.
It's interesting to see how by building a partner network you can grow your company faster and larger than just by yourself. That's definitely something that Mogulettes-in-the-making need to think about: who can refer clients to me that isn't in direct competition with me? Pet care providers can team up with pet stores, life coaches with career counselors, children's entertainers with babysitters, I could go on and on.
Rosalind is now using the valuable knowledge she gained from her experience to help small businesses become successful through her company, Axxess Business Consulting. She's also one the experts "on call" at Entrepreneur.com, where she and a handful of others answer questions related to startups. And as if that weren't enough, on top of that she writes a blog, Vest Pocket Consultant, with more information on small business. Thanks Rosalind!