Article by Dick Youngblood in
Star Tribune,
Sunday July 15, 2001
Computer consultants win business
with creative strategies
When the number of high-tech consulting firms
surpassed the roster of fast-food joints hereabouts, I
figured it was time to quit writing about the computer
consultants, who mostly offer similar services anyway.
I was halted in mid-boycott, however, by an
entrepreneurial gaggle of geeks who seem to be ignoring
the dot-com implosion with rather uncommon strategies.
One is Scott Grausnick, whose two-year-old computer
consulting firm is thriving with a truly creative
business model.
The company, Harbinger Partners Inc., has no bosses.
It has no employees. It doesn't even have a corporate
headquarters, unless you count Grausnick's
5,000-square-foot manse on the shores of Turtle Lake in
Shoreview.
Yet, it is growing in triple-digit bounds.
Ditto for Mike Kretsinger and Troy Venjohn, who
started Atomic Playpen in mid-1999 to offer Internet
strategy and development services in competition with a
daunting cadre of big regional and national consultants.
Two years later, as the big competitors are
announcing flagging sales and continuing layoffs, the
Minneapolis company has enough business in the pipeline
to push 2001 revenue to $2 million, more than double the
total last year.
The secret: an unusual combination of design
capabilities, technical expertise and what the partners
call "affordable pricing."
So, welcome to what is absolutely, positively,
categorically my last column about computer
consultants -- until the next intriguing yarn presents
itself, of course.
Let's begin with Harbinger Partners, which has no
employees or managers because everyone's a partner,
having paid up to $15,000 apiece for a share of the
business. And there's no corporate office because
everyone works from home or the offices of clients.
In short, it's a virtual company, a concept
Grausnick, 42, saw as a way to attract top people and
give them the freedom and incentives to make the
business grow. By all accounts, the model is working, as
clients ranging from U.S. Bancorp and 3M to Best Buy and
H.B. Fuller have signed on.
Unusual structure
Harbinger Partners started in February 1999 with four
partners and ended the year with nine partners and
$800,000 in revenue. In 2000, when the high-tech
collapse began, the company finished the year with 35
partners and $4.1 million in revenue.
And this year, as many consulting firms are
announcing layoffs, Harbinger is up to 42 partners and
Grausnick is projecting 2001 revenue of nearly $8
million.
What's the lure for the partners? Greg Dougherty, 37,
had contemplated starting his own consulting firm, but
was deterred by his inexperience in sales and
management.
"Harbinger Partners is the perfect blend for me," he
said. "I'm an owner, yet at the same time I'm surrounded
by seasoned consultants who are showing me the ropes."
Beyond the partnerships and the "manager-free
environment," there also are generous benefits and
competitive pay. In fact, a half-dozen partners make
more than the company's founder "because of their
technical skills," Grausnick said.
As for benefits, the company adds 200 percent to an
employee's contribution to a 401(k) plan, up to 7.5
percent of wages. It also pays all the premiums on a
medical and dental plan and offers five weeks of
vacation in the first year.
In return for these incentives, Grausnick has one key
requirement: Consultants must "delight the customer." He
interviews clients at the end of each project to gauge
their satisfaction, and asks the same question: "If
another project comes up, would this consultant be the
first person you'd think of?"
"Anything short of a 'yes' is unacceptable" and could
cost consultants their partnerships, Grausnick said.
Strategic pricing
For the life of them, Kretsinger and Venjohn could
not figure out what made the busiest Web designers worth
the $200 to $300 an hour they charged their corporate
clients during the dot-com boom.
The way they saw it, many of the top players in the
field were advertising agencies that did Internet design
as a sideline. And while the Internet consulting firms
had the technical expertise, they often lacked
experience in the creative design area essential to a
successful Web site.
The two figured they had the ideal combination for
designing and programming Web sites: Kretsinger, 32, had
his own business doing creative designs for ads,
promotional materials and consumer product packaging;
Venjohn, 33, did computer consulting with mid-size
companies, specializing in accounting applications.
In mid-1999 they joined to form Atomic Playpen. In
addition to their complementary skills, they shrewdly
priced their services at about $130 an hour, 35 to 55
percent below major competitors. Moreover, they were
willing to accept the smaller, $100,000 to $150,000
projects that bigger firms tended to ignore.
More important, they developed a research capability
that profiles a potential Web-site audience to guide the
development process.
"They're sharp guys," said Larry Dunivan, vice
president of global product development at Lawson
Software. "Their strategic thinking and creative
execution have been a valuable asset in several critical
projects."
The result: Revenue in 2000 reached $850,000, a total
the business has almost matched in the first six months
of 2001. In addition to Lawson, clients include Target
Corp., Alcoa/ Reynolds Metals and American Express.
Dick Youngblood can be contacted at 612-673-4439
or at
yblood@startribune.com.
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