Ask any tech-savvy business owner and he or she will tell you business is picking up. With Internet marketing and social-media platforms in high demand, tech entrepreneurs are hitting the scene in Central Oklahoma.
“We definitely see a surge of independent small businesses specializing in technology,” says Craig Teel, owner and creative director of Level9 Design. “Our industry is a fairly new one in comparison to everything else. I think the Web has hit a state of maturity, and we are seeing smarter and leaner methods of doing things that used to require a large budget to pull off.”
If nothing else, starting a small, technology-based business is a bit more cost-effective than starting other businesses. For as little as $10,000, an entrepreneur can get the computer, software and hardware he needs to start designing Web sites, designing graphics or producing videos.
“Yeah, it’s cost-effective,” says James Harber, owner of Studio FJ, a design studio. “I can provide services without having to keep up stock. It’s pretty liquid, as in, I don’t have to keep shelves stocked. You do see a lot of up-and-coming techies opening businesses, but not a lot of those are going to make it.”
THE TECH FACTOR
Studio FJ offers a mix of Web design, graphic design and video production. Harber started the company after being frustrated by not being able to do the level of work he wanted while working for someone else.
“I’m an entrepreneur, but I also do well in management. But I’m a younger guy, and it was hard to get a manager position at my age,” he says. “I wanted more responsibility. I wanted to do more work than I was being given. Now, I manage employees and meet with clients, and I’m able to satisfy that techie side of me and the creative side of me.”
Mateo Baisden, creative director of 360 Internet Management of OKC and Minneapolis, recently returned to the metro to serve as a full Internet marketing resource for local businesses. He started as a subcontractor for advertising agencies before deciding to branch into direct client relations.
“There are not enough vendors to service all the business that’s going to be coming up,” Baisden says. “In a few years, every business is going to need full Internet marketing services. Now’s the time for this kind of business.”
What sets smaller companies apart from the tech-service giants is the ability to form lasting relationships, owners say.
“We work on long-term retainer with companies who may need an IT department, but can’t afford a whole staff,” Baisden says. “For the price of one employee, they get a search guy, a design guy, an Internet marketing guy – the whole staff. We don’t believe that Internet marketing and Web development is a one-time fee. It’s about working with the client, becoming a resource, becoming a friend to them.”
Teel worked for Web design companies in the area, and saw both their strengths and weaknesses.
“I felt we could leverage that in our favor. We are very personable with our clients,” he says. “We have several clients who previously used large agencies around town, but found they could get the same high caliber of work from us without the large agency headaches. Level9 is what we like to call an interactive agency. We don’t just build Web sites.”
Says Baisden, “So many of the larger firms just pump out Web sites. You fill out a questionnaire; they build you a site, hand you the keys and you’re on your own. We really offer full services every step of the way. We do your social platform, your Web site, Internet marketing. It’s full service that companies want.”
REACHING NEW CLIENTS
One of the challenges in being a small tech firm is the lack of marketing dollars. However, through guerilla marketing and heavy networking, these new companies are gathering loyal clients.
“We’re solid referral only,” says Harber. “We have no sales team; we don’t advertise. All our clients are the result of networking and referrals from other clients. That’s the most important thing: You do a solid job for a client, they refer you to your next client.”
Baisden offers his services and company as a resource to small business owners by holding free workshops and classes. By becoming an educator and an adviser, he says he found companies will turn to him when they have a job they can’t or won’t handle themselves.
“You already have a relationship with them, and they trust you,” he says. “That’s what makes you successful is a relationship built on solid work and trust.”
But the challenges are staggering. Many entrepreneurs are overwhelmed by the time it takes to start a business, while others lack the skills necessary to survive.
“The time that goes into running a small business is amazing,” says Harber. “It’s not uncommon to work 12-hour days. It’s a major time commitment.”
HOT ZONE
Technology, especially technology driven by the consumer, is still hot, despite the recession, and may even be the front door to national recovery.
As reported by Money Morning magazine, the tech-heavy Nasdaq Composite Index is the only index to post a gain over the past five years, rising more than 13%. By comparison, the Dow Jones Industrial Average stayed flat, and Standard & Poor’s 500 fell a little more than 3%. This year, the Nasdaq gained 37%, while Dow increased only 14%, and the S&P rose 20%.
Spending on tech isn’t slowing. In its 2009 third quarter, for instance, Apple Inc. sold more than seven times the iPhones than it did last year.
TechAmerica Foundation released a report based on U.S. Bureau of Labor Statistics data that shows the U.S. high-tech industry shed 115,000 jobs between January and June this year, a 1.9% decline. It still fared better than most industries.
“We’ve been fortunate. Our industry has been rated one of the best recession-proof industries out there,” Teel says. “Web sites are another form of advertising – one that is accessible 24/7 from the comfort of your home.”
Many of those laid off from full employment are starting their own firms.
“I think we’ll see more of these small tech businesses, especially focusing on the Web end,” says Harber. “I also see an equal number of businesses failing. It takes more than just tech knowledge to run a business. You have to have business skills, too. Some tech people can never latch onto that part of it.”