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After
the Fall — Creating Your Own Growth
By
John Allen
Like
other online entrepreneurs, Eric Erickson '88 launched
his company with big dreams and a drive for independence.
But the down market has forced Erickson to re-evaluate
his business plan. Giving up the investment/rapid growth
cycle popular in Silicon Valley, he's chosen to maintain
his independence and focus instead on growing from within.
Erickson felt the desire to be his own boss while he
was working in Singapore for the advertising firm Saatchi
and Saatchi. His superiors, he felt, were misjudging
the importance of the Internet, limiting both his and
their opportunities for growth.
"The
CEO told me the Internet was just a passing fad," he
says. "I think he's working on a sheep farm in New Zealand
now."
Erickson
left Saatchi and Saatchi, and with his brother Jeffrey
headed off to Spain, where he felt e-business was underdeveloped.
There they joined with a third partner, Scott Emerti,
and formed eTango Technology, an online customer-relations
management company that hopes to repair what its owners
see as Europe's tradition of poor customer service.
From the start, eTango Technology seemed to be taking
off. In May 2000, they began meeting with venture capitalists,
looking to fund a major expansion that would take the
company into five European countries in three years.
Fortune gave the company a favorable write-up
in July 2000, calling it an "Internet dream" that had
the potential to change "the way European companies
deal with their customers." The Ericksons and Emerti
were thinking big.
However,
as the summer dragged on and the stock market slumped
ever lower, Erickson saw that talks with investors were
going nowhere.
"In
September we rethought our strategy," he says. "We halted
our search for venture capital, mostly because of the
dismal state of the industry." eTango scaled back expansion
plans and concentrated on its southern European core.
"There just wasn't the money to grow as quickly as we
wanted," he explains.
However,
according to Erickson, dropping the hunt for venture
capital is "the best decision we ever made.
"We're
almost better off not getting the investment, because
the lack of outside cash has refocused us on profitability.
If you can't make money out of the gate without outside
help, you're in trouble. But if you can get a company
that doesn't need outside investment to be profitable,
you'll have no problem being successful."
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