Property Solutions, a 10-year-old real estate software company that could be considered a sort of BYU alumnus, is no stranger to the technology obstacles Inviroment will face. Months into the business, CEO Dave Bateman discovered the first and largest hurdle standing between his new company and its potential for success — neither he, nor any of his partners, had any idea how to build software.
After crash courses in creativity, division of labor and cost management, Bateman found himself a year in and unable to make payroll.
"I never wanted to miss payroll once. That was my commitment to employees," he said. But that month, the company came up short on funds, and Bateman found himself unable to pay 20 percent of his employees. "It was the most stressful thing in my life."
While the company struggled, Bateman fleetingly considered pursuing other opportunities but ultimately decided he could not go back on the promises he had made to investors. To solve the problem, he taught himself to code software. It was a long process that required 14- to 16-hour workdays, but Bateman said it helped him understand why efforts to build the program he envisioned had stalled.
"It's really hard to run a technology company if you're not a technologist. So I became one," Bateman said. "I was able to get rid of those blinders by getting involved."
Today, with more than 800 employees, Property Solutions is one of the fastest-growing companies in Utah.
If there were a secret to his success, Bateman said, it would be offshore software development. As a small, unproven business, Property Solutions had trouble attracting scarce domestic talent. Bateman said he ultimately felt he had no choice but to outsource product development.
Even those startups that do not need software engineers will face talent shortages and trouble recruiting key employees, Richards said.
"Utah County is known to have more startups per population than many places, but the shortage of senior management is widely known to be a problem in Utah," he said. "If they hire the wrong person — the best friend, the old mission companion — that's when these companies begin to flounder."
Companies located elsewhere in the nation tend to have less trouble finding sales leadership, Richards said. "To find capital and talent, some of them will have to leave."
Their own worst enemy
As challenging as recruiting and sales may seem, the greatest obstacle college startups often face is their own inexperienced leadership, Richards said. Student entrepreneurs who may have years of school ahead of them will need to learn advanced management skills before funding runs dry.
Sometimes, even rapid growth and high demand can conspire against entrepreneurs.
"I was 27 years old when I first learned that the worst thing in business is not having any customers, and that the second-worst thing is having too many too fast," Richards said.
FiberFix is the most likely to run into insatiable demand, Richards said. Suppose a mass retailer, such as Wal-Mart, were to come to the company before it were capable of producing enough units for the proposed deal. Wal-Mart does not pay up front, which would leave the company without the funding to expand. But turning down such an offer could prove fatal.
KT Tape, a remarkably similar alumnus of BYU's entrepreneurship program, found itself in a similar situation in 2008, founder Jim Jensen said. He and his partners realized the retail potential for athletic tape while watching the Beijing Olympics, during which the tape became the second-most searched-for term on Google, after Michael Phelps.
Jensen and his partners created their retail product, launched a company and found their way into stores within four months.
KT Tape originally planned to take its product directly to mass retailers, but Wal-Mart wasn't buying. Representatives from mass-retail companies suggested they start elsewhere.
- New law helps Utah avoid marriage license...
- Mia Love paying back money spent on...
- Mom whose unbuckled child died was cited for...
- Utah bachelor lets sister set him up on 31...
- 3 officers file sex harassment lawsuit...
- President Uchtdorf to preside at Clark...
- SAGE scores, 2015: Top Utah schools in...
- $1M in heroin found in 'complex' hidden...
- New law helps Utah avoid marriage... 86
- BYU student health plan exemption expires 55
- Popular Provo teacher imprisoned for... 47
- Mia Love paying back money spent on... 46
- Does coal have a future in Utah? Should... 27
- Students see 'great growth' in second... 18
- Bishop, Chaffetz say EPA knew spill... 15
- $1M in heroin found in 'complex' hidden... 12