For Muzzillo, the leap was traumatic. "It was discouraging to go from the beautiful interior of a CPA firm -- and knowing what my billing rate was, even though I wasn't getting it -- to schlepping the street, carrying a sample case eight hours a day, begging for orders." The darkest hours came after he hadn't written an order all day, and the last customer asked, "How many forms companies are out there, anyway? You're the third one to call on us this afternoon alone!" Laments Muzzillo: "People kept asking me was I out of my mind -- walking away from a promising accounting position? At such times I thought maybe I was."
Another difference between an accountant and a forms broker, Muzzillo discovered, was that where the former sends a statement, the bootstrapper sends Ilio. Ilio was born of whole cloth one day, says Muzzillo, when "someone didn't want to pay us and we desperately needed that money. So I put on this tough Italian accent and said, 'Hello, this is Ilio. I'm a friend of Greg Muzzillo, and he's told me you don't pay your bill, and he's asked me to collect. . . . ' " Ilio collected.
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Information Publishing Corp.
Houston. Nature of start-up: publishing trade newsletter. Founded: 1985. Estimated 1991 revenues: $4 million. Employees: 30.
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"My wife had to keep the books, but she didn't know how. 'Keep them like your checkbook,' I told her. For the first few years we worked and traveled together nonstop. Our plan was to get financially stable in four years, then start a family. The fourth year, we started to kill each other instead."
-- Marc H. Ostrofsky
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Through selling real estate in college, Marc Ostrofsky maintains, he "learned how people pay for things." So well, in fact, that in 1983 he was featured in a Newsweek article on campus entrepreneurs. His real-estate career was derailed by a nondescript sidewalk huckster hawking telephone charge cards. "Do you get paid to do this?" Ostrofsky asked. "Yeah -- five dollars for every one I give away." "That," marveled Ostrofsky, "is the best business I ever heard of!" So he plunged into it. Before long he was publishing a newsletter about the deregulated pay-phone business. Seven years and two magazines later, his company was raking in $3.7 million.
But not before he made his peace with his subject matter. "That's what got me into my first trouble -- telephones," recalls Ostrofsky of his shoestring days, when it was vital to evoke the image of a thriving enterprise though only a tentative one existed. "I had a home phone, but I always answered it with the name of my company. That's what you have to do -- play different roles." One day Southwestern Bell was the caller. "They said, 'So this is a business? Sorry, but we have to change your rate from $13 a month to $76.' 'Why?' I demanded -- 'It's the same damn line!' "
The publication's largest source of revenue was advertisers, whom Ostrofsky billed as if they were tenants from his real-estate days -- first and last months down on the space. Essentially, the customers funded the business. "I'd never sold ads before," he explains of the enviable arrangement, "and the market was so new to clients that they'd never advertised before. It seemed OK to both of us."
Initial labor costs were reduced by volunteer help. In the beginning the family would sit around licking stamps. As cash started to flow, Ostrofsky paid his mother for her part-time work. But when the benighted woman asked for a full-time position, Ostrofsky let her go. "At first you're emotional and sentimental; that's the nature of starting a business," her son reflects. "The flip side is, eventually you realize that to run an efficient organization you have to do things unemotionally."
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DaMert Co.
San Leandro, Calif. Nature of start-up: manufacturing novelty item. Founded: 1973. Estimated 1991 revenues: $4.5 million. Employees: 15.
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"At this point, it feels like a regular job. Many times before, when it would eat me alive at night, I wished I'd had a regular job." -- Fred DaMert
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Driving a truck part-time kept 27-year-old Fred DaMert going, since the GI Bill's $200 or so per month didn't stretch very far, even in state college. By the same frugal token, DaMert stinted on gifts for family and friends, preferring to handcraft his handouts. For the holidays of 1973, lucky recipients were to be given a polymer prism that scattered a spectrum of color in the sun.
But when tinkerer DaMert pulled his first sample from the mold, it hadn't quite cured. The thing wilted into an arc. Eureka! Far from a disaster, with its inadvertently rounded surfaces, it cast wonderful rainbows on the wall. "I knew instantly I was onto something," he recollects.
The humanities major shifted to chemistry and optics, trying to determine how to pop prisms from molds in cheap abundance. In the back of an Oakland warehouse (which he also called home), he came up with a predictable method and brought the results to the nearby Nature Co., now a national retail chain specializing in scientific diversions. Its buyer cautiously committed to two dozen. The delighted DaMert packed up his Volkswagen with more and "went on a great selling adventure through California." A year later he crisscrossed the country by plane, seeking out museum gift shops because "they were easy to find, were friendly, and you never had to worry about their credit." By then, at $16 retail, DaMert's curved prism had become The Nature Co.'s best-selling item.
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Softworks Development Corp.
Mequon, Wis. Nature of start-up: publishing computer software. Founded: 1983. Estimated 1991 revenues: $16 million. Employees: 34
