The Company: Network Solutions Provider

Start-up Funds: $10,000 

Phillip Walker founded his company out of necessity rather than opportunity. After leaving his job as vice-president of an IT company after disagreeing with other executives about the direction of the business, he looked for similar positions. Then, a mentor persuaded him to set up shop on his own.

Walker spent the next few months meeting with potential clients to ask them about the challenges they face when installing and managing phone and Internet systems. He devised a plan to address those challenges. Confident there was sufficient need for his services, he launched Network Solutions Provider in El Segundo, California in 2005, using $10,000 in savings to buy business cards, brochures, and basic office equipment. To cut down on living expenses, he gave up his apartment and car and temporarily moved into a friend's house, where he set up an office.

Despite Walker's years of experience in his field, few of his contacts turned out to be useful sales leads. Aside from a placement in the Yellow Pages, he couldn't afford advertising. So he decided to find customers the old-fashioned way: by going door to door. "The only thing I could do was walk up and shake people's hands," he says. He started visiting business parks unannounced to ask IT managers about their phone and Internet systems and convince them that he could provide better services. Even when they declined to sign up, he ended up with ample contacts, some of whom he eventually persuaded to become customers.

Meanwhile, Walker struggled to overcome another key obstacle. Much of his company's credibility and ability to scale depended on securing partnerships with major telecoms. But he faced a chicken-and-egg dilemma: he needed to build his client base to capture the attention of major providers, yet many potential clients were reluctant to sign up with a company without those affiliations.

With that in mind, Walker focused his attentions on courting mid-sized companies, which, based on experience, he knew would be most willing to test the services of an alternative provider. He offered three critical selling points: lower costs, expertise, and around-the-clock support. At the same time, he pitched telecom companies. For instance, he spent eight months relentlessly calling and e-mailing TelePacific, a telecom provider in California and Nevada. He visited the company's office three times and delivered sales presentations. Ultimately, he won TelePacific over by demonstrating consistent growth in his company's customer base.

In 2007, about two years after starting Network Solutions, Walker landed a marquee partnership with AT&T. By that time, the company had broken even and added 20 clients to its roster. Last year, the 24-employee business generated $6.1 million in sales. "When you first pitch something, it may sound good, but it's not tangible yet," Walker says. "But once they saw we were still signing clients and growing, they finally said yes."

The Experts Weigh In

Knowledge is Power
Going door to door makes sense, but I tend to think of that as a wormhole approach. There are other, smarter ways to get conversations going with customers. It all goes back to using the knowledge you have. Perhaps Walker could have offered downloadable white papers or started a blog on IT. He wouldn’t have made money on the information itself, but he could have used that expertise to attract customers.

Bijoy Goswami
Founder, Bootstrap Austin
Austin, Texas

Ask and Receive
I like that Walker started by selling, rather than product development, and that he came up with alternative methods to promote his business. But while he worked to validate his strategy early on, he was unable to sell it to his target customers initially. That means something wasn’t right with the validation step. Maybe he was not actually asking for orders and confused passive interest with willingness to actually buy.

Greg Gianforte
Founder, Bootstrap Montana
Bozeman, Montana