The plan was to start over in the United States with a brand-new team: a chief financial officer instead of a controller; a sales manager; and an expanded sales staff. In particular, Lang wanted managers who had experience with small growing companies and knew something about mergers and acquisitions and initial public offerings.
Lang's venture-capital backers were less than thrilled by the relocation plan. Why not stay put and enjoy a slower but safer growth rate -- say, 20% a year? they asked.
But Lang, determined to head south, put a plan together for the move and started selling it to her investors. Luckily, she controls 60% of the company and had the leverage to make the decision stick. "It took a lot of convincing for everybody," she says. "I just felt that if we don't do it now, it might be too late for us, and our company might not grow as quickly as I want it to grow."
Of the three sites under consideration -- New Jersey, Atlanta, and Jacksonville -- Lang leaned toward Jacksonville, a place that she knew from sales calls to retailer Stein Mart Inc. Jacksonville seemed to be a modern southern city and had those Florida beaches. It was only a 30-minute flight from Atlanta and within easy striking distance of many of her customers. And it was the cheapest of the three options when it came to rent.
She learned soon enough that sunny, inexpensive Jacksonville had some drawbacks, too. Once she had found space in an office park there -- at $4.50 a square foot, which included the majority of the buildout -- she gave her administrative staff in Canada five months' notice, with the promise of bonuses up to $6,000 if they stayed until the end. (Almost all of them did stay, she says.) But finding replacements in Florida was harder than she expected -- perhaps because the Jacksonville unemployment rate was then hovering around 3%. When TMG advertised its openings, "I had a good response, but they were in lines that were not related to what I was looking for," Lang says. Fortunately, she had allowed herself enough time to keep searching. She ended up hiring managers not just from Jacksonville but from neighboring Gainesville and St. Augustine, 70 and 40 miles away respectively.
TMG's Jacksonville office opened for business last May, and the final phase of the move took place in September. It's too early to tell whether Lang's bet on Jacksonville will pay off. But she says that TMG's revenue growth -- projected at 45% to 55% for 2000 -- has stayed right on track since the move. So far, she says, her VCs don't have anything to complain about.
Liebmann of Permafresh would agree with Lang that a company needs to be in different places during different phases of its life. But his business is nowhere near as large or established as TMG. When Liebmann made his move from New York to Santa Fe, he was specifically looking for a city that would nourish a start-up.
Living in Santa Fe was a lot cheaper than living in New York, and the flight time to the California wine country was just two and a half hours. Plus, Santa Fe offered a culture and a lifestyle that appealed to him as an entrepreneur. For several years before the move, Liebmann, who has an extracurricular interest in chaos theory, had been making regular visits to the Santa Fe Institute for seminars and other events. He was wowed by what he calls the "amazing minds" that he met in New Mexico -- the academic and scientific community centered around Los Alamos National Laboratories, including a number of scientists-turned-entrepreneurs. "It gets pretty lonely -- in New York I was probably the only inventor-entrepreneur that I knew about," he says. "So I had peers here."
And to some extent, that network has paid off. A lunch Liebmann recently had with the CEO of a biotech company in Albuquerque, for instance, yielded some ideas for industrial applications of his product. Liebmann has joined business networking groups (Santa Fe's Safari Club and Albuquerque's Home Run Club) with some good results. Last February, he found his chief financial officer, Dallas Renner Jr., former director of investor relations and financial services at the spice company McCormick & Co., through the Home Run Club.
Other connections have remained elusive, though. Theoretically, Santa Fe has scads of potential investors in the form of seriously moneyed retirees and vacationers, the so-called hill and valley crowd. Liebmann has made a lot of visits to Los Alamos's Coronado Ventures Forum, which aims to match such angels with local entrepreneurs. But in three years, he says, he hasn't been able to tap into any of that wealth.
New Mexico's relative lack of business services also presents a problem. Permafresh works with a bank in Washington, D.C. The company's patent lawyer is in Princeton Junction, N.J. Its industrial-design firm is in New York City. So for the next stage of Permafresh's growth, with the rollout of its first product scheduled for 2001, business considerations are going to trump personal ones. Liebmann wants to move Permafresh's executive offices back to New York, where he can find the services and the talent pool needed to take Permafresh to the next level.
Yet he doesn't need to move the whole kit and caboodle to New York. As with a lot of growth companies, it makes sense to relocate only certain key operations. Splitting up a business in that way can help a CEO track down scarce resources, such as labor, more easily. So here's Liebmann's plan: The assembling and packaging of Permafresh components will probably stay in New Mexico, specifically in Albuquerque, where labor and space are relatively inexpensive. Liebmann will move to New England for at least part of the year. He's not hot on returning to New York, so after hiring a president to take over the day-to-day running of Permafresh in New York, Liebmann will probably move to Vermont, close to his alma mater, Dartmouth College, to concentrate on research and development and strategic planning. Splitting up the company probably would have been impossible when it was still a start-up, when the founder was running the business practically single-handedly, but now that Permafresh is established, that arrangement should work fine.
