Stay-At-Home CEO Raises Twins
For Ken White, working at home started as a hobby. Now it's a full-time gig involving two growing companies, three states, and more than a dozen employees. This tale of two businesses began several years ago, when White was looking for a spare-time diversion from his intensive full-time job as product-development manager for a big software company. So, nights and weekends, he tinkered with his own software program, EarthTuner, which let users listen to radio stations over the Internet. In May 1997, White began selling EarthTuner online.
Sales were brisk. "At the peak I had a couple of $12,000 months," White recalls. So in May 1998 he quit his day job to sell the $22.95 product full-time. Over the next year, EarthTuner did so well that White eventually sold his company to Massachusetts-based Internet conglomerate CMGI.
Today, White, 36, still works full-time from his Raleigh, N.C., home, running not one but two new small businesses. He's part owner and business-development director for RegSoft.com, which handles online payment processing for 3,000 businesses, many of them home based. White says RegSoft -- which became profitable six months after its founding in 1997 and has stayed in the black ever since -- projects $15 million in sales for this year. He's also CEO of NextUp.com, a not-yet-profitable start-up that he and two partners founded in October 1999 to make and sell software for translating text into speech.
Both businesses are "virtual," with no physical headquarters. But they're staffed by real people, all working alone from their basements or spare bedrooms. White divides his time between RegSoft and NextUp, running both from his attic office. He's installed a wireless local area network at home, so he can use his notebook computer anywhere in the house and even on the front porch.
For White, managing two businesses and a team of widely dispersed employees has created both new opportunities and new headaches. The biggest challenge is no surprise. If he's not careful, he says, "it's completely possible to work 20-hour days. You can work every waking moment." But he's gradually reduced his workload from 70-plus hours a week to 50 or 55. He accomplishes that by religiously setting priorities, focusing on tasks that are beneficial to the two businesses, and working flexible shifts.
As a partner in both ventures, White has the freedom and the motivation to concentrate his daily efforts wherever they're needed most. He finds surprisingly few schedule conflicts. "Even though they're two different companies, I'm managing myself with one unified image in my head," he says. "I prioritize each task for each company. Two tasks from the two different companies never seem to have the exact same urgency, so deciding doesn't seem like a dilemma." And when there's a problem -- a server crash, say, or a phone outage-it usually hits both companies; resolving the crisis for one resolves it for both.
Since White controls his own hours, he can -- and usually does -- split his shifts. He'll start working midmorning, perhaps breaking for a quick nap or to run errands in the afternoon, then work again until dinnertime. After putting his kids to bed, he heads back to the computer to work from 9 or 10 p.m. until 1 or 2 a.m. (White and his wife, Cindy, have a newborn son and a three-year-old daughter.)
White's two companies are so virtual that it's tough to figure out where they're actually located. Technically, NextUp is based in Clemmons, N.C., about 100 miles west of Raleigh, where co-owner Rick Ellis lives and picks up the mail. Between them, the businesses employ about a dozen home-based employees scattered throughout North Carolina, Georgia, and New York.
White, the only person who works for both businesses, says it was never his aim to build companies that would be spread across three states. He and his partners -- old friends or past colleagues -- happened to live in different cities when they began hatching their ventures. Instead of relocating, they began working from wherever they were. As their companies grew, they hired employees based on skills rather than location. As White puts it: "We're free to hire the best people. There's a ton of talent out there that wants to work at home."
One order taker, a catalog-sales veteran, works days from home in upstate New York. A Georgia customer-service representative with 15 years of experience works overnight so she can spend after-school hours with her kids. In exchange for flexible schedules, many of White's employees work for lower pay -- sometimes 25% less than they'd earn at a comparable nonvirtual company.
Because there's no physical headquarters, incoming calls to the businesses' toll-free numbers go first to a South Carolina answering service, which forwards them to the right employee. Press "1" or say you want to place an order, and your call goes to the customer-service rep on duty, wherever he or she happens to live. Press "2" or ask for the business-development team, and you'll get transferred to White's home.
Among White's top priorities is making sure those calls sound as if they're coming into a real business. One phone line does double duty for the two companies. (White answers all business calls with "Hi, this is Ken," and then figures out which company the caller wants.) He uses cordless phones for the business line, placing handsets throughout the house so he can answer quickly from any room. Other family members know not to answer that line; if White is on the phone or unavailable, the call rolls into his voice-mail system. "Most of our clients probably think we're running the companies out of some traditional four-story office building somewhere," he says.
White interviews job candidates in person, but after that he rarely sees anyone from either company except at trade shows. Instead, he and his colleagues communicate primarily by E-mail, with occasional telephone conference calls. For urgent matters, both companies rely on instant messaging. Desktop icons indicate who's online when; to contact one of his coworkers, White just clicks on an icon and sends a message that instantly pops up on the other person's screen. Most evenings, he and his partners stay online for hours, exchanging files and answering E-mail messages from customers worldwide.
White uses E-mail to manage his own time as well. He creates folders for each company in Microsoft Outlook Express, then creates subfolders for tasks in descending order of priority, from one ("Do today") to four ("Would be nice to do sometime"). "Any task I'm going to do comes in as an E-mail -- even if I have to send one to myself," White explains. "If I can't handle it immediately, it goes into one of those four folders. Then whenever I have time, I start with the ones and work down."
Because of the ventures' reliance on E-mail, White says, the single most important requirement for any employee is "being able to think logically and read and write well" -- not necessarily grammatically but clearly and precisely. The only employee who hasn't worked out was a graphic artist who simply couldn't write concisely. "We would frequently send her a short question and get back a two-page E-mail in response," White recalls. "We ended up not reading most of what she wrote, and we'd miss a question or sign that she needed help with something." To White's relief, the employee eventually quit.
Now White and his partners hire more carefully, looking for motivated, articulate people who are more likely to adapt quickly to their companies' ethereal culture. Virtual-company employees don't have to be introverts or insomniacs -- but it helps. In fact, "night owls are ideal," White says. "They're typically used to isolation, and those can be very productive hours when the rest of the world sleeps."
White's SOHO Essentials
- Office: Three networked computers, all Dell machines, including a new Inspiron 8000 laptop, $2,500. A two-year-old Inspiron 3500, originally about $2,000. A two-year-old Dell desktop, about $2,000. Hewlett-Packard inkjet printer, purchased used, $50. Umax flatbed scanner, $100.
- Networking: Proxim wireless local area network covering the entire house, $400.
- Telecom: Two-line Siemens cordless phone system for business calls, $300 for first phone and base; $100 for each additional cordless handset. Voice mail from local phone company, $6 a month. Package of telephone services, including three-way calling for conference calls, $20 a month. Online eFax service, free.
- Internet: Cable modem, $40 a month. Residential DSL, $40 a month. Business DSL for software development, $100 a month.
- Outsourcing: Incoming calls handled by Professional Answering Service of Charleston, S.C. The cost varies widely, but the company's usual rate is 50¢ a minute for answering and forwarding calls.
- Desktop: ICQ free instant-messaging service.
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