You've got a strong business model and solid relationships with potential customers. You invest all your savings and launch your company with high hopes. Then your former employer sues you, preventing you from selling your product to almost anyone you already know. Now what do you do?

That was the terrifying question facing Travis Burt and Keith Byrd in 2008 when they'd just founded Transportation Impact. Both had been managers at UPS, and they knew they could use their expertise to help businesses negotiate better deals with UPS, FedEx, and DHL. Neither had signed a non-compete or non-disclosure agreement, so the lawsuit by their former employer came as a complete surprise. But rather than spend their new company's time and resources in a legal tussle with a mega-corporation, they reached a settlement that prevented them from selling to most of the UPS customers they'd met while working there.

The Lucky Break

"We had been relying on the fact that we could go to these clients we already had a relationship with," Byrd recalls. With this option off the table, the pair had to head out of their former territory and start selling their service to complete strangers. "The lawsuit made us go out of our comfort zone and forced us to go knocking on doors, selling ourselves and our business model rather than our relationships," Byrd says.

Without those relationships, "We learned to believe in our product even more--because we had to," Burt adds. "When you get in front of the right audience, you've got to show them your passion."

The Pitch

They also came up with an enticing offer to customers: Transportation Impact would conduct a free analysis to determine if it could save you money on your package shipping contracts. If yes, you'd pay the company a portion of the money it helped you save.

The free analysis could take five to 10 hours using spreadsheets in those early days. Sometimes Transportation Impact would find savings opportunities, only to be turned down by the potential customer because they sounded too good to be true. "All these people had these great relationships with their UPS and FedEx reps," Byrd says. "And here are these strangers saying, 'Let us reduce your costs.'"

Things were tight that first year. They had barely enough revenue to pay the rent and electric bill on their tiny office. With no money for plane tickets, the pair drove to most customers instead.

In one dispiriting incident, Burt and Byrd did spend the money to fly to Minnesota and make a presentation to a major corporation with $40 million in annual shipping costs. The pair knew they could reduce those costs by 10 percent. The exec listened to their presentation with obvious interest, but in the end he said, "When you get a few clients whose names we'll recognize, come back and see me."

The Breakthrough

Smaller companies signed on enthusiastically though, and often referred Transportation Impact to their friends at other companies. Business began to pick up. The sales process begins with a 30-minute Web presentation to explain how the service works before visiting a potential customer in person. Burt and Byrd knew their company might be headed for success when they found themselves struggling with their limited office space because both partners were often giving presentations at the same time.

Today, the company has 24 employees and has saved its clients a total of $40 million in parcel shipping costs, Byrd says. The spreadsheets have been replaced with proprietary software that does the cost-saving analysis quickly. The company has expanded its offerings to include audits that find erroneous charges or parcels not delivered at their guaranteed time, garnering refunds for its clients. Revenues in the past three years have grown more than 1,200 percent.

Burt and Byrd started out planning Transportation Impact on weekends at each others' houses, writing on whiteboards they'd hung up around their rooms. "I still have tape on my walls," Byrd says. But the whiteboards themselves have been framed and are displayed at the company's new larger offices as a reminder of where they started.

Their biggest encouragement, though, comes from conversations with customers, Burt says. "It's very humbling to have a CFO tell us that because of what we did they saved six jobs last year."