Bootstrapping Using Services From Atlanta: PMG Founders Joe LeCompte and Robert Castles (Part 2)

Sramana Mitra: You started PMG as a services company in 1997 in Atlanta. What happens next?

Robert Castles: We had some pretty good success. We went through the whole Internet explosion and the dot-com startup era. We built a lot of very neat websites for companies ranging from Mitsubishi Wireless with an interactive cellphone on a web page over to The Varsity in Atlanta, which was very exciting to have a local account to work with. Then, we caught wind of the digital marketplace explosion and things really took off from there. We had quite a bit of growth in this B2B marketplace opportunity.

Sramana Mitra: You were building marketplaces for other people?

Robert Castles: That’s right. We had a fiber market and a steel market client. They were trying to forge new ground in digital marketplaces and we were building web applications to meet their needs.Joe LeCompte: We were partnering with companies like Arthur Andersen at that time and Ariba. We were focusing on the front-end user experience while the big heavy system integrators would work on the back-end part of it. We were launching these marketplaces in partnership.

Sramana Mitra: What size projects were you doing? If you look at the financials at that time, how did the revenue ramp? How many clients were you handling in the 1997 to 2000 timeframe?

Joe LeCompte: Initial website development projects were probably $50,000 to $100,000. We were up to the million dollar run rate by 2000. Some of the digital marketplaces were quarter million projects and went on to grow up until the point the bubble burst. Then, it stopped.

Sramana Mitra: That’s why I used the 2000 marker. So what was your revenue in 1999?

Joe LeCompte: I don’t remember what it was. We hit the annual run rate of a million in 2000.

Sramana Mitra: That’s fine. In 2000, the market crashes? What happened? How did you deal with that?

Joe LeCompte: At that point, I had become one of the partners in the business. The thought at that time when the market crashed was we knew that we didn’t have the revenue to sustain the head count. Our decision at that time was to cut down to where we knew we would survive as a company, which then meant that we had to get rid of 80% of our workforce.

Sramana Mitra: How many people did you have?

Joe LeCompte: I can’t remember off the top of my head. Probably around 30 at that time.

Sramana Mitra: So you cut down the workforce. Did you have enough business to sustain what you had left?

Joe LeCompte: Yes, we cut to where we knew that we could survive as a company. We didn’t want to go through the stepping stone staff reduction because the hit on morale at that time would have been huge. We just brought everybody in, explained the situation, and made the cuts that we needed to make. Within a week, we hired back another five people. Some of the people that we laid off were immediately hired back, but it felt like that was a better way to do it than the other way. Cut to the bone and go back on a path of growth was the best way to get through the Internet bubble.

This segment is part 2 in the series : Bootstrapping Using Services From Atlanta: PMG Founders Joe LeCompte and Robert Castles
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