Independent spirit keeps entrepreneurs climbing
By Tillie Fong 
| July 3, 2009 | 2:51 PM
Denver-area entrepreneurs Paul Grimmer, left in inset photos, Teresa Lynch and Nate Braden share their
experiences going into business for themselves. Main photo by istockphoto.com
Editor’s note: In the spirit of Independence Day, we’re running a series of profiles on Colorado independents — people who’ve stepped away from the mainstream and struck out on their own.
Nate Braden had a revelation while studying for an MBA at the University of Colorado at Denver.
“I was paying an insane amount of money for textbooks, which I would use 10 percent of the time and was unable to sell back to the bookstore,” he said. What the former Marine intelligence officer came up with was the idea of developing online textbooks on history and foreign policy — and americaandtheworld.com was born.
“It was a natural progression to go online,” said Braden, 40, of Denver. “I liked the multimedia properties on the Internet — not just tell a story by words, but also through video.”
It takes more than just an idea, however, to strike out on your own and start a business. As entrepreneurs will tell you, success doesn’t come easily and unexpected challenges lie around every corner. But they say the potential payoff is a big one: being your own boss, doing something you’re passionate about and making a good living in the process.
Finding a niche
The inspiration for Teresa Lynch’s business came after she was diagnosed with chronic fatigue syndrome in 1990. She went to a holistic doctor who suggested that she take a number of herbal supplements, but she found the experience frustrating.
“I was having to go get seven to eight different products to get all the things I need,” she said. “I saw an opportunity to put together something with all of the products and make it affordable and more convenient.”
Lynch, 51, who had worked as an accountant at U S West for five years, took advantage of an unpaid leave program to start Health Options Inc. in Golden. The company, now called Animal Health Options, sells nutritional supplements for pets.
Textbooks seemed like a natural fit for Braden, who said he always had an interest in history and writing.
“It dovetailed with what I did in the military,” he said. “I have to find out information in a foreign country and put it very concisely to my commander.
“I use the same skills for a textbook. Teenage students have as much attention span as a Marine Corps corporal.”
In Paul Grimmer’s case, he noticed something while working as a Conoco executive for 27 years.
“Success or failure hinged on what technology you had,” he said. “If you want to succeed and to keep a sustainable edge, you had to have new technology that nobody else had.”
But Grimmer found that in large corporations, new ideas tend to be killed before they have a chance to come to fruition.
“Ninety-nine percent never make it to market,” he said. “The technology doesn’t work, or it doesn’t scale up to commercial size. Very few new ideas get to the market.”
Grimmer, 53, is now president of Eltron Research Inc. in Boulder. The company develops technology solutions in areas such as energy, the environment and chemical processing.
Getting started
Braden found out the hard way that having a great idea isn’t enough to create a viable business.
“I had a Web site but not a business,” he said. “I thought all we had to do was throw something on the Web and it would instantly make money. The business principle that I violated was, never, ever subscribe to the theory of ‘build it and they will come.’ You have to create something to show people to get a reaction.”
Braden didn’t start advertising his concept of online multimedia textbooks until 2003, when he thought he had enough content on his Web site to attract clients.
“I spent a lot of money on an eight-page color brochure and sent them to professors of foreign policy and political science all over the country,” he said. “Out of 850 of the pieces I sent, I got two responses.”
One was from Red Rocks Community College in Colorado, and the other was Louisiana State University. “They were the only two customers I had for two years.”
Lynch had an easier time of it. She knew a clinical nutritionist who could formulate supplements for her and who put her in touch with a manufacturer. Soon, she was selling supplements from her home, relying mostly on word of mouth. After requests from veterinarians, she added animal supplements to her product line, and now they are the company’s sole focus.
Braden and Lynch started their companies from scratch, but Grimmer didn’t want a form a startup, especially for a technology-based company.
“How do I find 100 technologies to buy? Where do you get the ideas from?” he said.
Instead, he was looking to buy an established company that had a track record for coming up with new ideas that he could bring to market. Eltron Research fit the bill perfectly, with a staff of 50 doing research in diverse areas of technology.
“Instead of having one professor with one idea, I had a whole portfolio of different technologies,” he said.
Tackling challenges
One of Lynch’s early stumbling blocks was getting money to launch her venture, since she had to pay upfront for the ingredients, manufacturing, packaging and shipping of her supplements.
She said that after her one-year leave, she went back to work for U S West and sold the supplements at night and on weekends.
“I had a nice salary (from U S West) and saved money,” she said. “I just lived very frugally and didn’t buy a new car, took no vacations.”
After nine months, when U S West was going through a series of layoffs, Lynch decided to quit and focus full time on her business. She financed it through savings, money from family and friends, cashing in her 401(k) and selling her home.
“I worked for the first two years without pay, but we made good products and people kept buying, and business grew after two years,” she said.
One of the toughest challenges for Braden has been to convince educators to try online textbooks.
“Professors are a tough nut to crack,” he said. “They are very wedded to their particular texts, and in many cases they have written the textbook.”
He said students have a much easier time accepting the concept.
“Most students favor online textbooks to hard copy,” he said. “Most are using their iPhones to do their homework. . . . As long as they have Internet access, they can read it on the bus or whatever.”
Braden also learned that starting a business is a lot more expensive than he thought.
“Everything has taken three times as long and cost three times as much,” he said. “Whatever you think is the top end, multiply that by three. Definitely pad the numbers.”
Grimmer said the greatest challenge for his company has been coming up with a good idea that no one else has and seeing whether it can be translated into a product. He estimates that Eltron will be able to launch its first product within a few months.
He also found that owning a business means he has to wear many different hats instead of specializing in one area.
“When you go into a small business, you don’t have a chain of command. I am the chain of command,” he said. “That was a big shock to me. I know that intellectually, but until you live it, you don’t know it emotionally.”
Lynch, too, found that she has to carry a lot more responsibility as a business owner.
“When I worked for someone else, I did not have to worry about having enough money for paychecks or to pay vendors,” she said. “Cash management is a key part of my job (as an accountant), but you don’t have to worry about whether your paycheck is going to clear.”
Recession fallout
As if all that weren’t enough, the nation’s economic crisis has thrown these business owners an extra curveball.
Lynch said she had to cut back on paying premiums on employee health insurance last year. And, with taxes going up, she has less money for marketing.
She said the company had wanted to introduce a new product this year but has put those plans on hold: “We’re not going launch a new product if we can’t pay for marketing.”
Braden hopes to branch out into the home-schooling market, since parents may have more disposable income than school districts, many of which are strapped for cash.
He also is creating more textbooks for high school students, but said he may have to lower his subscription rates.
“With this recession, when public schools come to me, they tell me, ‘We can give you 1,000 students but only if you will cut the prices,’ ” he said.
Grimmer is discovering that it’s more difficult to find other companies to work with on projects.
“Several large companies were interested in our products but freaked out when the economy went down, and they stopped the research,” he said.
Grimmer said he also has to be more picky about the projects he wants Eltron to pursue. “Is anyone else developing it? Do people want it?” he said. “The worse thing is to spend $1 million and find that the technology doesn’t work.”
Advice for entrepreneurs
So you’ve got a great idea, thought it through, are prepared to face a variety of sometimes daunting challenges and are ready to start your own business. Now what?
All three entrepreneurs agree that writing a business plan is crucial.
“It helps you organize your thoughts and helps you think about your business,” Braden said.
Grimmer added a caveat: “From the day you make your plan, it’s not going to work, because it will change. You have to be smart enough to change the plan because all kinds of things are going to change. Make a plan and keep it flexible.”
Braden also advised that it’s easier to start a business if you don’t have to rely on income from it.
“Don’t quit your day job if you have one,” he said. “If you start a business, do it at night and on weekends. Only when you’re making money do you ditch the day job.”
Lynch, in her experience, found that everything cost twice as much as expected and that it takes twice as long as planned to begin generating revenue. “Not a lot of people can do what I did, which was go for two years without a paycheck.”
But entrepreneurs also shouldn’t be afraid to fail, Braden said.
“I have to try something and fail at it to really learn,” he said. “Failure is a natural part of life. I would not trust anyone who has not failed.”
Related story: It’s a good time to become an entrepreneur
Business, entrepreneur, nate braden, paul grimmer, startup, teresa lynch
