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Value Added: Serial entrepreneur hopes third time is the charm

By Thomas Heath
Sunday, September 12, 2010; 10:26 PM

I read recently where someone said you have to win once in life to be successful.

Some lucky ones hit their home run the first time. But most have to keep trying. Serial entrepreneur Elie D. Ashery is on his third start-up, and he is confident this one is a winner.

He is president and chief executive of Gold Lasso, a Gaithersburg-based technology firm that develops personalized e-mail to help companies sell more and associations recruit new members.

"We help them get the right message to the right person," said Ashery. "It simplifies an extremely complex marketing process."

Gold Lasso has 17 employees (including four in India) and 150 clients, including Ford Motor, Kraft Foods and the American Association for the Advancement of Science. Revenue has grown from $80,000 in 2006 to around $1.5 million. The young company breaks even, and Ashery just received $500,000 in funding that he thinks will put it on a path to growth and profit.

Ashery has many characteristics of an entrepreneur: an aversion to being managed. He is scrappy, focused and persistent."As a kid, I was thrown out of every overnight camp and every academy I attended," said Ashery, who said he grew up "on the poor side" of Potomac. But "I was a decent student because education was important to me."

After Churchill High School, he attended the University of Maryland, where he was hungry to learn. He worked at a small investment banking firm during college, learning investment research, finding small companies and developing an ability to spot investment trends.

Ashery became comfortable with technology early on, mastering early versions of Bloomberg's financial data program. He was the research gofer, using the emerging technology to find financial information.

"I knew it like the back of my hand," says Ashery, 35. "I knew how to get bond formulas. How to get streaming videos."

In 1997, when he was in his early 20s, he started his first company, Newsletters.com, out of his mom's Potomac basement with a childhood friend.

Newsletters.com sold research and newsletters to investors, employing recent Maryland grads who were familiar with the Internet. The company took off, and Ashery raised $1 million from venture capital firms. Newsletters.com eventually moved to office space in Rockville. The investors brought in new management, displacing Ashery and boosting payroll, rent and other short-term obligations. The firm grew from 15 to 90 employees in two months as it tried to expand. The market imploded, and Newsletters.com's cash dried up. The company was sold in 2000 to marketresearch.com, a division of Chicago-based Tribune Co.

Ashery's ownership stake netted him less than $100,000, which he used as a down payment on his first home. He also took away an important lesson, though, one that has stayed with him: "Hyper-growth has to be managed very, very, very conservatively."

Soon after, he became involved in another company called IncenSoft, which created software to help companies manage their incentive compensation programs. Ashery made $50,000 when IncenSoft was sold 18 months after its creation.

Gold Lasso, meanwhile, began with a $5 purchase.

Ashery and a buddy, Michael Weisel, were doing technology consulting for a company that owned self-storage units when they heard that some unclaimed computer equipment left in one of the units would be auctioned off. They went to the auction, bid $5 for the equipment and hauled it home.

Ashery and Weisel spent the next five months selling the hardware on eBay for $8,000. They used the money to hire a computer programmer to build a prototype that would computerize many of the manual marketing systems Ashery had used to find customers on Newsletters.com.

"Before, associations might recruit members by offering them gifts and writing them letters. The association would send a prospective member a form, ask them to fill it out and send it back. We decided to do it by e-mail."

The company's first year of operations was 2006, and Ashery started trolling association meetings, pitching companies on his new software. His first big "get" came at an industry forum where associations exchanged ideas on marketing techniques and member recruitment and retention. Ashery gave a 10-minute presentation in a meeting room and caught the attention of the chief marketer for the D.C.-based American Association for the Advancement of Science, one of the largest associations in the United States.

"Once I saw him interested, I didn't take no for an answer," Ashery said. "I followed up, asked if I can come by and told him he didn't have anything to lose." After a couple of meetings, several phone calls and a live test of Gold Lasso software, the science association signed a contract that has grown significantly.

The company is growing at a steady pace with several big contracts in the pipeline, including one that could more than double revenue by next year.

He just raised $500,000 from investors, including Next Stage Development Group, the state of Maryland's technology venture fund and several other private investors.

By waiting until Gold Lasso had broken even, Ashery was able to command a higher value for the company. That gave him more leverage with the investors, allowing him to retain 35 percent ownership.

"I didn't take money for a long time so I could keep more" of the company, he said.

Ashery is micromanaging his costs. He is buying used furniture, driving hard bargains on everything from office rent to health insurance, and hiring only when he absolutely needs it. One of his executives, who is from India, used his connections there to hire four programmers for a fraction of what it would cost in the United States.

"My strength is my resourcefulness," said Ashery. "I can squeeze a dollar out of a penny."

The company's gross profit margins are 90 percent, but almost all of that is eaten up by development costs. If they can expand their roster of 150 clients to 300 or more, Ashery expects to make about a 30 percent profit on sales.

He pays himself around $100,000, has a company car, bonuses and good health care. He is hoping to expand his client list into social media and online text companies. If he can grow the company to 10 times its current size, which would put revenues at about $15 million a year, he would like to sell.

He thinks the most likely buyer is an e-commerce company, a large ad agency or a customer relationship agent.

"If I execute well, a good exit strategy will present itself," he said. "I'm definitely the comeback kid. I will continue to swing the bat until the perfect connection is made."

And remember, you only have to hit the ball once.

Follow me on Twitter at addedvalueth.

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