My First Million-Dollar Account
Of all the milestones of success in business, few are more exhilarating than that first million-dollar sale. Of course, the road to that seven-figure moment varies from company to company. Sometimes it happens suddenly, almost by accident. Other times, it follows months, or even years, of painstaking preparations. But the impact is almost always the same: It's the sale that catapults the company into the big time, paving the way for larger deals. Here's how four entrepreneurs pulled it off.
Breaking into Wal-Mart
"We didn't get a lot of sleep over that summer, but we delivered."
Businesses plot for years about getting into Wal-Mart (NYSE:WMT). Sam Braunstein was signing a million-dollar deal with the retailing behemoth just six months after starting her company. Braunstein is the founder of Wellgate Products, a New York -- based manufacturer of orthopedic braces and supports for women. When she approached Wal-Mart, Wellgate's knee and ankle supports were selling briskly in a number of small retail chains nationwide; Wal-Mart's mass audience, Braunstein sensed, would be perfect.
The retailer is constantly on the lookout for new products, so getting a meeting took only a few phone calls. "As long as you are willing to work with their timing, they want to meet with you," Braunstein says. She flew to Bentonville, Arkansas, and found herself sitting nervously in a waiting room with other would-be vendors. Finally, she was called to a cubicle to make her pitch. Braunstein had brought a detailed analysis of the market for women's orthopedic supports. Nothing on the market, she explained, had been designed with women in mind. She told the buyer about her own experience as a runner with joint problems, describing how she could never find braces that fit correctly or looked good. The Wal-Mart buyer, a woman, appeared interested. Three months later, Braunstein got the news by e-mail: Wal-Mart wanted to launch four of the company's nine products -- two wrist supports and two knee supports -- in its stores nationwide beginning in September 2006, just a few months away. The deal was worth more than $1 million. And there would be no trials or limited editions or test runs.
Fortunately, Braunstein had already lined up financing and manufacturing capacity in Asia for the inventory. She knew she needed to be completely prepared for a national launch before even beginning those discussions. Indeed, when Wal-Mart came through, Braunstein ordered extra inventory so she would have stockpiles on hand, just in case. When sales were stronger than expected, she says, she was glad she had. "We didn't get a lot of sleep over that summer, but we delivered," she says.
Once the products were in Wal-Mart, things moved very quickly. She snared other national chains she had been pitching -- including Target (NYSE:TGT) and Kmart -- and, today, Wellgate's distribution spans 8,500 stores.
In February, just 18 months after the Wal-Mart deal, Braunstein sold Wellgate to Lil' Drug Store Products, a marketer of women's health products, for an undisclosed sum. (Braunstein left the company after the sale and has yet to decide her next move.) Looking back, she is amazed how everything came together in the wake of that first sale to Wal-Mart. "A million-dollar sale is never a one-time deal, like buying an airplane or a house," she says. "You are no longer selling to mom-and-pops around the corner."
Anything Is Possible
"Saying no never occurred to us. We took it as a challenge."
Ron Snyder, chief executive of Crocs, the Niwot, Colorado -- based maker of rubbery shoes, runs a company that's approaching $1 billion in sales. But back in mid-2004, he was a consultant to Crocs, as an in-between gig after leaving a high-pressure job as head of global operations for Flextronics (NASDAQ:FLEX). Before he even got the CEO title, things took off. "We had a groundswell of interest, and Dillard's heard about us," Snyder recalls. A quick meeting with the department-store chain's buyers led to an order for more than $1 million worth of shoes in the fall of 2004, with indications of orders to come.
It didn't take long for excitement to give way to reality. With only one factory, in Canada, Crocs lacked the capacity to ramp up its production from 30,000 to 300,000 pairs of shoes a month. "There was no chance we could fulfill the order," Snyder says. Fortunately, he had a few contacts in Asia and was able to find a contractor in about a month. Soon, Crocs was shipping thousands of pairs of shoes. "Saying no never occurred to us," Snyder says. "We took it as a challenge. And I think it propelled us into formulating a strategy so that we could manufacture in the United States, in Canada, in Mexico, and in Asia."
Today, Crocs has 13 manufacturing facilities and 15 distribution centers around the world and can get seven million pairs of shoes a month into stores worldwide. And Snyder's global focus has helped push Crocs sales overseas, from Japan to Brazil, with international revenue now accounting for nearly half of the company's total. In many ways, that first big deal made it all possible. "Every decision we made back then," Snyder says, "we'd stop and think about whether it was the right thing for 2008 or 2009."
The 100-page proposal
"Everyone gets lucky breaks, but few capitalize on them."
Things move slowly when you're bidding on large public-sector contracts. And that's just fine with Girish Kumar Navani, founder and CEO of eClinicalWorks, a provider of health care software in Westborough, Massachusetts. He's determined to be thorough.
Navani's million-dollar deal came in 2005, six years after the company was founded. A project called the Massachusetts eHealth Collaborative, an initiative to connect the state's health care providers in a clinical data exchange network, had sent out a request for proposal to set up the technical systems. The project, which had $50 million in funding from Blue Cross Blue Shield of Massachusetts, would be closely watched within Massachusetts and by other states. Navani knew that winning a piece of the deal would give revenue a dramatic bump while positioning eClinicalWorks for future deals.
Navani and his team spent more than a year working on their bid. They wrote a proposal of more than 100 pages, then traveled throughout the state to demonstrate the company's software to public health officials and physician groups that would be using it. The hard work paid off: eClinicalWorks was selected as one of four contractors for the project, along with much-larger companies like GE (NYSE:GE). All told, the deal brought in $5 million in 2005 and has brought in more than $3 million since. The biggest gratification, Navani says, was that doctors were allowed to choose which of the four products they wanted, and 174 out of 180 medical practices picked eClinicalWorks'. Better yet, the rollout was completed ahead of schedule, in September of last year -- a key selling point for future deals. "People could see that we can handle large volumes of clients and complex assignments," Navani says.
eClinicalWorks began bidding on new deals even before it finished installing the software and soon had two more clients: a network of hospitals and health centers in Ohio and a similar network in Idaho. Last year, Navani scored even bigger, with a $20 million contract with New York City to bring eClinicalWorks' electronic medical-record-keeping software to 1,300 physicians. Navani expects eClinicalWorks' revenue to reach $75 million this year, a 75-fold increase over the $1 million the company booked in 2003. "You create your own luck," Navani says. "Everyone gets lucky breaks, but there are few that capitalize on them."
Win Friends, Influence People
"There was a period of elation that lasted a few seconds. Then the reality sets in that you have to deliver."
How does a start-up get a shot at a big deal? That was the question facing Ethertronics, a San Diego -- based manufacturer of custom antennas for mobile phones and other wireless devices. Ethertronics was small, but the buyers for its antennas -- the major mobile phone companies -- were big and reluctant to commit to an unknown player.
So Ethertronics started by pitching engineers rather than corporate buyers, hoping that if the tech guys were impressed, those with the checkbooks would be, too. "It's not an easy sell, and it's not an easy product," says Jeffrey Crosby, the company's CEO. Ethertronics' chief technology officer, Laurent Desclos, became the company's de facto chief salesman. He identified engineering employees at potential customers and requested meetings. That let both sides talk tech, without a marketing person mucking things up. "The engineers would become advocates of what we could do, and they let the procurement people know about us," Crosby says. "That's how we cracked open the doors."
Small orders began to trickle in. Finally, in late 2005, Ethertronics got a bite from Samsung, which it had been courting through those midlevel engineers. Samsung was producing a sleek new phone with Bang & Olufsen called the Serene and needed to squash the antenna into a small space. "Their teams had been working on it for months and couldn't find a solution," says Crosby. Impressed with Ethertronics' work on the Serene, Samsung tapped the company for a much larger project, designing antennas for its U600 -- Ethertronics' first million-dollar sale. "There was a brief period of elation that lasted a few seconds," Crosby says. "Then the reality sets in that you have stepped into the big leagues, and you have to deliver." Ethertronics, which already had a factory in China and worked with suppliers throughout Asia, added new manufacturing facilities in Korea to cope with the new demand.
That deal opened a lot of doors for Ethertronics, which now counts numerous million-dollar sales among its roughly $40 million in revenue. "It's really hard when all you have in your hand is a set of PowerPoint slides," Crosby says. "Once you have the confidence that you can crack one customer, you know that you can do it again."