Barbera played elaborate charades to maintain Metro's bigger-than-we-really-are facade. On a typical day, he would phone a client to discuss a proposal, pledging that when his secretary finished typing it, he'd have it delivered -- before 5 p.m. Hanging up, he'd rush to his word processor and type. Document done, he'd change into sweats and sneakers, climb onto his bike, and deliver the proposal. "I was CEO at 2 p.m., secretary at 3:30 p.m., and messenger at 4:30 p.m."
Barbera says he lived in fear -- well merited, as it turned out -- of discovery. As bike messenger he had befriended a client's security guard. When Barbera subsequently appeared downtown to meet with that client (this time in CEO mode), he encountered the guard. She buzzed upstairs and announced, "Metro's messenger is down here, and he claims he has a meeting with you." Thinking quickly, Barbera responded to his customer's confusion, "Oh, my brother used to work for me delivering packages when he was down on his luck." Barbera sustained this multirole juggling for two years.
He leveraged the names of heavy-hitter clients to get extended payment terms from suppliers -- even before he had clients. As he scouted for data-management companies, he told them that he'd really love to throw a little sole-source business their way, but a client like, say, American Express needed longer payment terms. "I said, 'If you can't, we understand. We'll just find someone hungrier who can.' " Most he approached -- 19 out of 20 -- complied. Why? "I asked, as opposed to just taking it," he says. Barbera negotiated terms as long as eight months from many vendors, and, he says, "some even gave me a year."
Perhaps the key to successful bootstrapping isn't so much what you're doing as it is what other people think you're doing. "It all depends on the light you portray yourself in," says Barbera. -- C.C.
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Fleet Delivery
Kitty Hawk Group Inc. · Founded: 1978 · Start-up capital: $0 · 1994 revenues: $108 million
How do you start a $100-million company with no cash? Well, you don't start a $100-million company: like your older brother's hand-me-down dress pants, a $100-million company is something you grow into.
Tom Christopher started what would eventually become the Kitty Hawk Group in 1978. And he had no cash whatsoever. Well, he admits he might have had $150 in his checking account. And he certainly made good use of his pickup truck. His one-quarter ownership of a Cessna 310 airplane came in handy, too. But all that is as good as nothing when you're talking about starting an air-charter management service and air-cargo airline.
Christopher had identified the need for same-day delivery while employed as a salesperson at a large transportation company. A customer needed a rush delivery from Nashville to Arlington, Tex., but the transportation company didn't provide same-day service. So, Christopher volunteered, for the price of a tank of gas, to make the delivery in his own plane. When his supervisor decided that same-day service was a business with no future, Christopher offered the service himself on the side. After four months he saw enough demand to justify his breaking off on his own.
The business began as Christopher Charters, a freight forwarder. Christopher dropped customers' packages at another transportation company, which performed the actual deliveries. Not one for fancy financial maneuvers, he grew the business on a transaction-by-transaction basis. "It's really been a cash-flow operation from the beginning," he says. "Each piece of freight generated enough money to get the next piece of freight." The first external capital, a $125,000 loan against accounts receivable, came in 1983. Volume grew steadily, and Christopher chartered planes to meet demand.
In 1985 he purchased Kitty Hawk Airways, an air-charter company, which he combined with Christopher Charters to form the Kitty Hawk Group. Instead of cash, Christopher gave each of the two owners 10% of the stock of the new venture. By September 1988 Christopher had amassed $150,000, enough to secure a bank loan to purchase $1 million worth of his own aircraft.
Of course, there was no reason for his customers to know that Christopher had been transforming Kitty Hawk from a freight forwarder into a full-fledged airfreight carrier. Understanding that customers appreciate even the appearance of substance, he'd frequently touted his "fleet of aircraft," which amounted to his fraction of the Cessna. But he had access to hundreds of planes he could charter, so he figured there was no need to get specific.
By the summer of 1988, Christopher had moved his operation to the primary regional airport, Dallas/Fort Worth. "People assumed we were bigger than we were because of our location," he says. Long before the actual move, he had rented a post-office box at that prestigious address, hoping that potential customers would be impressed. Evidently, they were. With no external capital until the company's fifth year in business, Christopher's early days as a simple freight forwarder funded Kitty Hawk's evolution into a $108-million airfreight airline with its own fleet of 21 planes. -- C. C.
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Cheap Suite
Value Added Distribution (VAD) Inc. · Founded: 1985 · Start-up capital: $100 · 1994 revenues: $11 million
Many bootstrappers find themselves apologizing for the poverty of their office furnishings. Not Kevin E. Kelly. He's had to explain the plushness of his Gaithersburg, Md., computer-subsystems distributorship. "My vendors thought I was spending too much money," he says. "I had to show them everything was used."
Kelly founded Value Added Distribution in 1985 with $100 in personal savings, which he spent on letterhead and on setting up phone service. He ran the company out of his home "until it took over" and the tractor-trailers thundering down the street threatened neighborhood tranquillity. For two years he drew just enough money from the business to buy food and keep the house. With an eye to the future, he bought used furniture at auctions and from companies that were going out of business, for as little as 10¢ on the dollar. When the office furniture filling up the garage "drove my wife crazy," he says, he finally, in 1988, moved the company into a 1,500-square-foot office. And he had six matching desks ready for use. That same year, Kelly got the company's first significant cash infusion, a $30,000 bank loan, with which he bought inventory. He continued his frugal furnishing, buying and storing a growing backlog of office furnishings to maintain VAD's image as it grew. And grew. -- Robina A. Gangemi
