'Don't waste money, make it'

Entrepreneur reveals the secrets of his success

You live in the Flathead.

You've got a great idea for a business, but you're a long way from the big city. How many customers can you reasonably expect?

Lucky you, you live in the Flathead. And you have a computer, with high-speed Internet. And a phone.

So the world is your oyster - great business opportunities in the midst of a great landscape.

Greg Gianforte of RightNow Technologies, a customer support software company that has brought $500 million into the Bozeman economy over the company's 10-year existence, pumped energy and information into a group of 40 or so entrepreneurs at Grouse Mountain Lodge on May 23.

"There's always another way," Gianforte, a five-time serial entrepreneur, told the crowd.

He urged people to think in nontraditional ways that don't involve fat bank accounts or generous angel investors. It was his mantra as he walked his listeners through his own decisions on business ventures over the past couple of decades.

In 1986 Gianforte founded Brightwork, producing network management applications that ultimately were installed on more than 150,000 Novell systems nationwide.

He sold the company to McAfee Associates in 1994, and stayed on to run McAfee's North American sales operation that he helped grow from $25 million in revenues to $60 million in less than a year.

Later, after founding RightNow Technologies in 1997, Gianforte led his new company to nine consecutive years of revenue growth, 19 straight quarters of positive cash flow and a successful initial public offering.

With that track record, Gianforte had the entrepreneurs' attention.

He told them he found the seed for RightNow Technologies in the premise that businesses have more urgent tasks than answering e-mails, yet customers deserve top-notch service if they're forking over their money.

He checked Web sites, identified weaknesses, phoned the companies to see if they'd buy his solution at a given price, found out why not, made the changes, called them back, made more changes, and phoned again. He ended up with software that lets customers answer their own questions quickly and easily on a company's site.

"I was on the phone making hundreds of calls to find out what companies would buy before I ever wrote a line of code," he said. The calls happened in April 1997, he built the software in May and June - and he had paying customers in July.

"I doubled revenues every 90 days for the first two-and-a-half years," he told the entrepreneurs.

Moral of the story: Don't spend money until you know you can sell your product.

"You need to be the first one to sell your own product," he said, "because if you can't sell it nobody else can."

Then when you do invest, your first money must go into sales people. Gianforte had 40 employees before he had a phone switching system. He had 60 employees before any printed literature.

"Cash is more important than your mother," he said. If a business is going to fly, it must be profitable and generate that cash flow.

And it gets there through sales. After all, he told the crowd, sales is noble. It's the highest form of service in business.

Gianforte was in town for the Whitefish leg of the Bootstrap Montana Entrepreneurship Series, daylong seminars also held in Conrad and Miles City.

He co-founded Bootstrap Montana to help other entrepreneurs learn the principles of "bootstrapping," building a business with little or no outside investment capital.

Bootstrap Montana is a program of Bozeman-based TechRanch, an organization that offers business development help to entrepreneurs venturing into high-technology markets.

Its new rural micro-loan program offers interest-free loans for the first year, on projects that will provide a fast return on investment and have a direct effect in increasing sales. Montana companies drawing more than 50 percent of their revenue from out of state go to the top of the list when considering who gets the loans.

TechRanch and the Gianforte Family Charitable Trust set up the program to loan anywhere from $5,000 to $20,000. The fund has $100,000 available immediately. Find out more at www.bootstrapmontana.org

So why not just go to an angel fund or raise investor capital and put a fledgling business idea into action without all the start-up time delay?

Don't get Gianforte started on that.

Having no money worries can mask the hard questions about a product's viability on the market. Raising operating capital takes time away from customers. Introducing someone else's money adds an additional set of "masters." With fiscal fudge room, the owner can make a fatal mistake. A full bank account removes spending discipline.

Need he continue?

Bootstrapping, he told his audience, helps an entrepreneur build a business on a legitimate real-world value proposition - and that gets proven out at the same time he or she is learning sales skills early in the game. It also shortens the time to market and time to profitability.

He admonished his listeners: "Don't waste money, make it." But, he added, don't be cheap. When an effective tactic shows itself, funnel all available resources into it.

Although, as he put it, business is war and there are only two jobs - making bullets (production), and shooting bullets (sales) - that's no excuse to forsake ethics.

He urged entrepreneurs to find their noble purpose.

Greed is not a virtue, he told them. And, with 86 cents of every dollar eventually going into wages, wanting to make money is not enough.

For Gianforte, it all boils down to helping clients serve their clients.

Montana entrepreneurs have an ideal opportunity not only to help themselves, but to help fellow Montanans by adding to the stock of jobs to be had.

"The first thing to remember is, 'Who is the customer?' So an employee is a means to an end," he said. "But (in Montana) most job creation is in small business, not in corporations."

The Flathead Valley, Whitefish, the Bitterroot Valley and Bozeman have been uniquely successful in creating more jobs through small business start-ups, he said.

Everywhere, though, the biggest barrier is "not everyone believes it's possible to start a business," Gianforte said. "But what [Semitool founder] Ray Thompson showed, what we in Bozeman showed was you can … You've got to think big enough."

Bring in money from outside the state, and you've improved the general welfare. And that's entirely possible, he said.

"Montana used to be remote, but with the advent of the Internet, the whole world is our stage," he said. "Too many entrepreneurs are too concerned with the local. We've got to take traditional retail to e-retail."

On the Web:

www.techranch.org

Reporter Nancy Kimball can be reached at 758-4483 or by e-mail at nkimball@dailyinterlake.com