Great Companies Started for $1,000 or Less
COMPANY: DocMan Technologies
BUSINESS: Electronic document-management services
START-UP CAPITAL: $500
1999 REVENUES: $1.5 million
2000 PROJECTED REVENUES: $2.2 million
Michael Pray had a deadline: August 26, 1995. That allowed him only eight months to rev up his DocMan Technologies to the point that he could afford to hire an employee to cover for him during his seven-day honeymoon in the Virgin Islands. After paying for his 300-guest wedding, Pray wouldn't have much money left to fund the company's growth. He had $500 earmarked to start DocMan.
If that weren't daunting enough, Pray undertook the challenge knowing the rigors of a start-up entrepreneur's life. In June 1993 he and a partner had founded Rare Systems Group, a client-server-application development firm. They had run the company from the living room of Pray's apartment in Cleveland. He still remembered the ordeal all too clearly. Everyone in the company had had keys to his apartment. He could rarely sleep past 7:30 a.m. without being awakened by ringing phones and employees poking their heads into his bedroom. But Rare Systems had thrived. By December 1994 it had had 10 employees and robust revenues. Pray had been able to afford an apartment that was not also his company's office.
Then Pray gave it all up. He wanted to specialize in what he saw as the part of the business that offered the best growth opportunity: the computerized management of documents for customers such as law firms. His partners didn't agree. So in December 1994, Pray, then 27, spun off what would become DocMan into his own one-person company.
Pray nonetheless promised his fiancÃ©e, Gina, that nothing would interfere with their wedding date. But who would keep DocMan afloat while the newlyweds were in the Caribbean?
At first, Pray acknowledges, he didn't know how he would pull it off. He had launched the business so abruptly that he had to coin a name for it while en route to his first sales call. The cost of cell phones and pagers consumed his $500 in start-up capital. He was worried that few of his customers would follow him to DocMan, a company that they might disparage as a one-man show. "From day one I didn't want my customers to see anything different," he says. Pray put himself on a round-the-clock tether so that his customers could reach him whenever they wanted by telephone, pager, or cell phone.
For a few months he labored single-handedly on projects originally scheduled for implementation by a Rare Systems team. "I would work away from the office doing consulting work for a customer 10 hours a day, but there were still things that I had to deliver to another customer the next day," Pray says. He worked late into the night and, on a few occasions, through the night.
The extra effort paid off in referrals from satisfied customers and cut down on the time and money he would otherwise have had to spend on sales and marketing. The software vendors he represented also referred customers to him for consulting services.
Although DocMan is solidly in the black, Pray says the company has never been hugely profitable. His expenses have been substantial, he says, because he has never economized on training, software, or computers. If he can't afford the best, he does without. As the company has diversified from consulting into hosting client applications, its investments in training and computer equipment have increased. From the very start, Pray says, "I didn't want to give my customers the impression that I was out there buying cheap equipment and doing things halfway."
Pray's wedding went off as scheduled. By then he'd hired two employees -- both former colleagues at Rare Systems -- and soon afterward installed them in a standard office. (The company now employs 14 people.) And on his honeymoon, for the first time in eight months, Pray put himself beyond his customers' reach, leaving his cell phone, pager, and laptop at home.
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