Great Companies Started for $1,000 or Less
COMPANY: Hi Frequency Marketing Inc.
BUSINESS: Youth-oriented marketing service
START-UP CAPITAL: $125
1999 REVENUES: $1 million
2000 PROJECTED REVENUES: $2 million
Ron Vos, who lives in the classic college town of Chapel Hill, N.C., made a canny observation: If sufficiently jazzed about something, college kids will work for nothing.
As a sales rep for Mammoth Records, which is based near the University of North Carolina campus, Vos had been impressed by the marketing strategy of many small hip-hop labels. Lacking national distribution, the record companies fielded a city-by-city network of independent promoters. When he left Mammoth Records, in 1995, Vos figured he could adapt that concept to market alternative rock (which just so happened to be his style of music) on behalf of the major labels.
The key to the strategy underlying Hi Frequency Marketing, the company that Vos founded five years ago, was recruiting a network of unpaid interns on college campuses across the country. The interns could visit local radio stations and clubs and cajole them into playing Vos's customers' songs. They could put up displays in local stores. They could hand out free samples on campus. In other words, they could do anything and everything to create buzz. And in return Vos offered the students a chance to learn about the music business and get a foot in the door.
"I didn't have a real payroll. What I had were interns who were working for contacts, experience, free CDs, free backstage passes," he says. Some of his interns have gone on to get jobs in the recording industry after graduation, Vos says. At first he recruited students using record-store managers and contacts he had made while working at Mammoth. Now students apply online, answering questions about their favorite bands and clubs.
To get started, Vos worked out of his basement and put in extra phone lines for his business -- but paid a residential rate. He got a fax machine from a relative who was closing down an office, and he used it as a phone and a fax. For $125 he bought a used Macintosh loaded with FileMaker Pro, which enabled him to create and manage databases without hiring a consultant.
To support himself during the first few months, Vos found work moonlighting as a telemarketer and cutting down trees on weekends. Sometimes he took business calls on his boss's cell phone, struggling to hear over the roar of chain saws.
Hi Frequency now has the look of an established company. Housed in a renovated cotton mill near Chapel Hill, it has a roster of customers that includes high-profile bands -- Squirrel Nut Zippers, Radiohead, and Everclear, to cite three of them -- as well as a growing number of nonmusic customers. They include the Todd Oldham clothing line and Food.com, an online takeout service. Although the company still deploys 200 unpaid interns on campuses across the country, the 36-year-old Vos now has six full-time employees, who draw regular salaries.
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