The New Face of Self-Employment
When are soloists not soloists? When they're members of Indigo Partners -- "the ultimate entrepreneurial engine."
Jennifer Overholt sighed and gazed out the window at her dark, still street. On her home PC her hard drive whirred as a search engine combed the Internet for an obscure statistic on women's health. Finding no results, Overholt fought the urge to assault her monitor. It was one a.m. Her client expected to see the statistic in that day's presentation. And Overholt had run out of places to look for it.
Despairing, Overholt shot an instant message to Michelle Lee, a night owl who she thought was likely to be awake and online. "Still hunting?" came the immediate reply from Lee. "Try these links." "Thank goodness for partners," Overholt typed back before she dug into the Web once again.
Overholt and Lee are partners -- but not in the traditional sense. Their company, Indigo Partners ( www.indigohq.com), is an unusual hybrid that offers corporate customers the broad services of a group consultancy while preserving the perks of a soloist for its individual partners. Having begun life in 1996 as an informal support group for on-their-own marketing consultants, Indigo today has dozens of customers and a shared approach to strategy and competitive analysis. Its projects range from investigating new markets for Fortune 500 companies to reformulating the business road maps of failing start-ups.
Indigo's six partners have created an organism -- so loose an amalgam can scarcely be called an organization -- suffused with the energy of autonomy. The partners tackle projects on their own or in small teams. There is no hierarchy; there are no regularly scheduled meetings. Overholt and her cohorts -- an intense and experienced bunch, many of whom have young children -- labor in their homes, setting their own hours and workload. Anyone can leave the partnership for any length of time and for any reason. One partner left for a year to work at what was, at the time, a hot start-up. Another took the summer off to join her husband, whose job had required that he go to London.
Michelle Lee: She'd been a worldwide product manager at Hewlett-Packard and VP of marketing at an Internet start-up. But Lee wanted flexibility to work on projects that excited her, and to keep the hours she liked.
Indigo Partners has no overhead, no assets to manage. There is no central office or secretarial pool. There are no accounting services. Most projects are bid on a fixed-price basis, so there's no need to track hours. The partners' equity is in themselves, and they are constantly boosting their own value through education and experience. For projects that require heavy lifting, they temporarily bulk up by using people from a large pool of specialized freelancers that they have personally recruited. After four years of operation, the business finally incorporated in 2000 -- but only to simplify the paperwork that comes with projects from large companies like Microsoft.
By endowing individuals with the marketing and project- management resources of a whole group, Indigo is leading a trend that could transform soloist services, a vigorous but somewhat amorphous segment of the economy that encompasses everything from manicurists to recruiters to insurance agents. Although an exact number for the self-employed remains elusive, statistics for the past year or two hover around 20 million. Unlike traditional entrepreneurs, soloists aren't panting to grow a company. Their joy is in the work they do and in doing it without the burden of managing anyone but themselves. They own what they earn, but more important, they own their decisions.
Jennifer Overholt: The former product marketing manager at Sun Microsystems tried the traditional solo life, only to find herself working more hours rather than fewer.
Companies, of course, are the antithesis of solo life in both form and spirit, but soloists have not eschewed everything about them. For example, a growing number of the self-employed flock to shared office space in search of psychological and technical ballast, and companies like My Virtual Corp. ( www.myvirtualcorp.com) channel work to stables of soloists. But Indigo Partners is more than just a group of soloists plumping itself out with services that it contracts for on a project-by-project basis. "The Indigo partnership is a new species of business, what I call the 'real-time networked business' made possible by the Internet," says Ian MacMillan, professor of entrepreneurial management at the Wharton School of Business at the University of Pennsylvania. "It is the ultimate entrepreneurial engine -- created instantly for attacking the problem, paid only for the solution to the problem. No overheads. No slack time. No waste."
That's how the outside world sees Indigo. The company's internal partnership agreement -- until recently its only legal documentation -- explains how the members see themselves: "We want to work as management consultants, but would also like to spend a significant amount of time with our families, traveling, writing, and on personal development," the agreement states. "Because these activities, and others deriving from like interests that may arise over time, are incompatible with the demands of partnership in a more traditional consulting organization, we wanted to partner with others who wanted a similar, decidedly low-key and informal approach to the business affiliation itself."
The Pros and Cons of Single Life
The Silicon Valley-based M.B.A.'s who make up Indigo are all onetime soloists who found the reality of going it alone less compelling than the promise. Overholt, for example, used a year's worth of savings to set out her shingle as a consultant in 1994. As a Wharton grad and former product marketing manager at Sun Microsystems, she yearned for greater variety in markets, products, and technologies. As an athlete, she also wanted more time to travel to Ultimate Frisbee tournaments. Consulting seemed the natural pursuit for a woman of polished social skills, enviable efficiency, and the ability to quickly break big messy problems into manageable tasks.
Overholt envisioned her soloist's life as the perfect mixture of intellectual diversity and copious free time. But she had doubts. "I probably had the same fears everyone does," she says. "Will I have enough business? Will working at home be too isolating? Then there were the little nitty things: doing my own computer support. Accounting. Figuring out if I should get the copier with or without the scanner."
The work arrived through word of mouth, from friends, colleagues, and former classmates. Soon Overholt was doing competitive analyses and market surveys, even filling in for executives on maternity leave. "I loved it," she recalls. But not all of it. "The work came in fits and starts, making it hard to control my schedule and hours," Overholt says. "I had no one to bounce my ideas off of. No one could cover for me if I needed time off." With her name and reputation on the line with every job, Overholt found herself working more hours, not fewer.
A.C. Ross: A former director of marketing at Sun Microsystems and management consultant at Bain & Co., he wanted the freedom to seize new opportunities.
But Overholt did find time to have frequent dinners with A.C. Ross, a male friend who had been her "cube neighbor" at Sun and also happened to be an independent consultant. At one such dinner, toward the end of 1995, their conversation drifted to ways in which they could market themselves to the high-tech community. Soon, the word partnership was out on the table. "Besides legitimacy, a group of partners could help with workload balancing, add different talents to the mix, and just make it more interesting than working alone," Ross says. But the pair had no interest in forming yet another traditional consultancy. Their goal was to create a whole greater than the sum of its parts and to do so without sacrificing the autonomy of those parts.
Overholt and Ross worried that with only two consultants working together, the freedom to take off whenever life came calling would be constrained. So on a rare rainy night in Palo Alto they met for dinner with Anne Murguia at a small Italian restaurant. A Wharton classmate of Overholt's who had worked at Apple and Hewlett-Packard, Murguia saw part-time consulting as a way to spend more time at home with her kids. Over red wine and pasta puttanesca, the three talked strategy.
"We weren't worried about losing the things we loved about being soloists, because the written agreement left us room to operate the way that worked best for each of us," says Overholt. "There was so little risk in getting together. Plus, with a structure that loose, the partnership would be easy to dissolve if it didn't work out."
At subsequent meetings, around Overholt's kitchen table, the partners refined their plan, deciding, for example, what kinds of projects they'd accept. "We wanted to stick to technology marketing but to narrow our focus," Overholt says. "Anne didn't want to work on marketing communications, like white papers. I didn't want to work on chip companies because they didn't seem that exciting." The partners also decided to limit assignments to the Bay Area so they wouldn't have to travel. And they aimed to work exclusively with vice-presidents or higher-ups.
It was not as easy to come up with a name for themselves. Ross compiled a list of hundreds of words -- names of trees, places, stars, planets, and figures of Greek mythology. "The Greek names were the first to go because they were too long and hard to spell," says Overholt. "Plus Sisyphus Consulting didn't offer a great connotation." At length they agreed on Indigo, "which had a pleasing sound, was the right length, and immediately suggested a color for the brochures and logo that would help people remember the name," says Ross.
A Name, Some Business Cards, and Presto ...
Thus monikered, the trio merged their lists of contacts and began mailing brochures in September 1996. The simple act of printing business cards with the company name on them had an immediate effect on the group's visibility. "People would say, 'Oh, Indigo Partners, we've heard of you,' even when they couldn't possibly have," recalls Murguia. The partners donned other trappings of a regular business as well, including a Web site and a "company" phone number. "It feels like you're calling into an office, but it actually routes to each of our homes depending on whom you want to speak to," says Murguia.
Even more helpful than new business cards were the partners' solid-gold contacts. While at Sun, Ross had worked with John Doerr, a partner at Silicon Valley's premiere venture-capital firm, Kleiner Perkins Caufield & Byers. Doerr and his colleagues passed Indigo's name on to a few of the companies in their portfolios, leading to some early jobs that tested the confederacy's mettle. One particularly high-pressure assignment required the partners to forge a start-up's soup-to-nuts business strategy in 17 days flat.
Anne Murguia: She had the Wharton M.B.A. and the high-tech experience. But Murguia yearned for a job that would let her spend more time with her children.
Overholt and Murguia worked their own contact lists as well, and jobs began pouring in. With only three customer mailings in five years, the partners were so busy they had to turn down assignments, an unimaginable luxury back in their solo days. "I used to try to take on every piece of work that was offered to me when I did this on my own," says Murguia. "I worked weekends and nights to stockpile my savings in case the work stopped coming in."
Tapping into a network of freelancers keeps the partners sane and up to speed during crunch times and is a means of acquiring specialized knowledge as needed. Sitting in her home office one morning last spring, Murguia serial-called a roster of contract specialists. "Can you do a data sheet in four days?" she asked a freelance writer and a graphic designer, both conferenced into the call. That business concluded, she picked up the receiver again and punched in the phone number of a researcher. "I'd like to give you a template and a list of companies," she said. "I'll E-mail them over."
Liz Bradley: The Stanford M.B.A. had more than 20 years of marketing experience at giants like General Mills. At Indigo she could use her talents and still have a life.
Despite growing demand for their services, the partners never ignore the provisions for "families, traveling, writing, and... personal development" stipulated in their agreement. For a few months in 1997, for example, Overholt cut back her Indigo hours significantly to lead the search for a new executive director for Big Brothers Big Sisters. Two years ago Ross left the partnership temporarily for a job as vice-president of marketing and business development at a start-up technology company.
The partners relish their almost limitless flexibility. But Ross's sustained absence brought home the difficulty of keeping a cart rolling when one of its wheels is missing. Eager to enlarge Indigo, in mid 2000 Overholt and Murguia sought out Karen Matthys, Liz Bradley, and Michelle Lee, three solo contractors they knew either by reputation or through professional engagements. Each woman had an impressive list of contacts, and their collective experience in consumer marketing, qualitative analysis, and computer hardware would broaden Indigo's expertise. More important, the newcomers ardently agreed with the partners' founding principles. "We liked their lifestyle philosophy," says Matthys. Matthys, Lee, and Bradley signed the partnership agreement and contributed a modest amount for new brochures, business cards, and changes to the Web site that their coming on board had necessitated.
As Big (or Small) As They Need to Be
Even with six members, Indigo is an "organization" only in the loosest possible terms. When a potential customer calls, two or three partners -- whoever's interested and available -- go to check out the project. Partners who are interested in acquiring new skills -- consumer research, for example -- often work with another partner who's already knowledgeable in that area. The expert is the lead; the others follow directions. Most collaboration takes place through E-mail and instant messaging, and partners willingly work around one another's hours. "I'm a night owl: 12 p.m. to 3 a.m. works for me," says Lee, who prefers to teach scuba diving on some afternoons rather than work indoors. "I realized happily that all-nighters don't have to end with college. And with partners, there's someone to cover the early-morning meetings."
"That's been the most surprising thing about Indigo Partners," says Matthys. "I can duck out for a few weeks without the business folding. And when I'm working, I can be part of this amazing period of time in the Valley. I used to complain that the M.B.A. wasn't a good 'mommy track' degree. Now I definitely think it is."
"We've all talked about going back to a 'corporate' job. The thing is, this is a great life. Why would I want to give it up?"
"Six partners seems like a good number, especially when people keep leaving to have babies," jokes Overholt, who is expecting her first child this fall. "But I wouldn't want to add anyone else. We might need to start having real meetings."
Just because Indigo is neither soloist fish nor small-consultancy fowl doesn't mean it has escaped all the problems of those more traditional arrangements. There are many more nonbillable hours than anyone expected, as partners cope with technical support, taxes, meetings with potential customers, and answering follow-up questions on projects they've completed. And as with any soloist or group, "every project, you're at scratch," says Matthys. "You need to learn everything, from the politics and org charts to where the bathrooms are."
Those projects are getting more complex, and the customers bigger, thanks to Indigo's new breadth of expertise. "We chose Indigo to help us after AOL acquired Netscape, because of their track record of successfully solving strategic complex branding problems," says Judy Logan, who at the time was a vice-president of marketing at Netscape. "They got up to speed faster than the traditional consulting firms and negotiated the organization without any hand-holding."
Indigo also has the attention of high-tech companies looking for depth and experience but not Andersen or McKinsey rates. "My project was too small for a big firm but too big for a solo person. These guys could start right away, add another person at crunch time, and add part-time resources for specific tasks as we needed them," says Steve Ghareeb, vice-president of sales at Voice Access Technologies, a company in Los Gatos, Calif., that provides voice-driven software, technology, and services to wireless carriers. "We gave them totally unrealistic deadlines, and they met them. I don't think McKinsey would have even called me back by the time these guys finished the entire project."
Of course, Indigo's rise coincided with the Internet boom, and the partners recognize that the economic downturn could take its toll. "We practically had calls every day when the Valley was hot," says Bradley, who adds that Indigo is approached with about a dozen jobs each month. But the consultants remain optimistic. "Small companies have less money than ever to hire a permanent team," says Lee. "At the same time, strong strategic planning and marketing are even more critical in this economy. So I think we're still going to be needed."
"We've all talked about going back to a 'corporate' job," admits Overholt. "The thing is, this is a great life. Why would I want to give it up? People used to ask me, 'So, when are you getting a real job again?' Now, if I had a dollar for every person that wished they could do this, I'd retire."
Julie Bick is the author of several books, including the best-selling All I Really Need to Know in Business I Learned at Microsoft: Insider Strategies to Help You Succeed.
Copyright © 2001 Julie Bick.
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