Value Added: Getting a New Venture Running
When I start my three-mile run through my neighborhood every morning, the first mile is the toughest. From then on, I cruise. When I write columns like this, the first words are the most difficult. After that, they flow a little more easily.
Most entrepreneurs tell me it's the same with them. The hardest part of building a company is recruiting that first client.
Jeff Trexel, founder and president of Reston-based Infoition News Services, a morning news service for Capitol Hill and corporate executives, said nailing his first customer was a killer.
"The first client is by far the most difficult, because they have to take a chance on you," said Trexel, whose grandfather was an entrepreneur who ran a hardware store and real estate business in the 1950s.
Trexel, 35, was communications director for Rep. Judy Biggert (R-Ill.) when he had his "aha" moment walking down a street in Naperville, Ill., on a campaign jaunt in October 2002. He decided to use his experience to create an in-depth daily news summary customized for decision makers.
He jotted down a strategic plan detailing potential customers and people to contact. First on the list was Fairfax-based American Management Systems (AMS), which provides information-technology consulting to the federal government. Trexel had once worked at AMS, where his responsibilities included compiling a daily news summary for executives.
Getting in the door wasn't easy. He spent weeks trading phone calls and e-mails before getting an audience with the company. He knew that no one inside was compiling a daily news summary anymore. So he put together a sample of what he could do and printed copies.
"I had preexisting relationships, so that helped. It took four to six months to go from, 'Hey, I will take a look at the product' " to getting his first contract for $2,000 a month.
With contract in hand, he quit his job on Capitol Hill.
I asked Trexel how he figured out what to charge his first client. He said he guessed. And it was a key mistake that stayed with him for years.
"Once you set precedents, it's hard to move the price up quickly," he said. "Clients two, three, four and five knew what the $2,000 number was. So I sacrificed. Part of it was ignorance. But you've got to sacrifice for a business or you can't expect it to stick around very long."
But enough went right to get him launched.