Sramana Mitra: How did the revenue move from a million dollars in ’87. Where are you now?
Paula Tompkins: We have been through three major downturns. The first in the 1990’s where we had to reinvent ourselves. Then there was the 2001 dot-com collapse where one of my major clients came to me and said, “We need to reduce our spend by 33% in five days.” Literally, I had to lay off hundreds of employees. Then in 2006, three major clients of ours – General Motors, Ford, and Chrysler – got into major trouble. By the time the bankruptcies were done and the dust settled, we were pretty much starting over. I had reinvented the company three times over its history and we are now over $20 million in revenue.
Sramana Mitra: Is there anything else from your journey that you want to share?
Paula Tompkins: Every time I talk to venture capitalists or any kind of investor, for a women starting out in 1985, it was hard to get even a line of credit. I had these blue chip receivables and it took three years to get a banking relationship. Every day is just a struggle for finding the right team and deciding for yourself what direction you want to take. I made a decision that by the time I fiddled around with venture capitalists and their questions, it was that or take care of the clients.
I would always go back to saying, “I’m going to take care of the clients because, at least, they pay the bills.” If you take your hand off the steering wheel, you run the risk of having issues. I would say, overall, I’ve been the master of my own destiny. I still reap the rewards of my own company. Because we know what we’re doing and we know what we need to do, personalization is something that is hot right now and we’ve been doing it, literally, since 2001.
Sramana Mitra: Where do you do your engineering? Is it all in the Bay Area?
Paula Tompkins: I moved everything from the Bay Area to Detroit, Michigan for a couple of reasons. One is lower cost. Two is more stable work force. I have many employees who have been with me for years and years. More and more companies are moving out of the Bay Area. You get somebody in the door and you start working with them. All of a sudden, they quit and jump to the next company. It’s been a good strategy for us.
Sramana Mitra: You’ve done this right at the beginning?
Paula Tompkins: I opened my first office in Detroit, which was a satellite office, in 1996 or 1997. That grew very quickly. Pretty soon, it had more employees than the California facility. After the dot-com meltdown and all the trials and tribulations with that, I decided to consolidate in the Detroit area. That involved formally moving the company headquarters there around 2003.
Sramana Mitra: Especially for bootstrapped companies, the Bay Area is a tough environment. You have to compete with the Facebooks and Googles.
Paula Tompkins: The Detroit area’s got Wayne State, Michigan State, University of Michigan. It’s a hotbed right now of startups.
Sramana Mitra: That’s a great thing because all these different areas in the US that are developing as startup hubs. Utah, for instance, has become a very nice startup environment and there are a lot of companies that are coming out of Utah. The fact that the whole startup culture is moving throughout the United States and throughout the globe is a wonderful trend.
Paula Tompkins: It is a wonderful trend. I’ve had a ball. I’ve seen the world. I’ve done business all over the world. We’ve had clients in Australia. I’ve had several offices in Europe over time. Europe is tough. I’ve learned all these lessons and I’ve done it on my own nickel. I haven’t had to worry about a venture capitalist coming and saying, “It’s nice that you want to do this, but I want you to do something else.” I’ve been able to stay true to what I believe in and bring my many years of experience to my clients.
I was with my Board about a month ago and they said, “You’re still in an emerging market.” There’s still a tremendous amount of education that needs to be done in the marketplace. Our clients, who are large corporations struggle inside these companies to move them to digital. You can’t believe what a challenge it is still today.
Sramana Mitra: Good luck with everything. It was a pleasure talking to you.