Turning passion into profits

H-SC ENTREPRENEURS TALK ABOUT PUTTING EVERYTHING ON THE LINE

JOHN LEE DUDLEY '95

Like greatness, some people are born entrepreneurs and others have entrepreneurship thrust upon them.

Coite Manuel '99, the creator of Food Chain, falls into the latter category. In January 2009, he was laid off from his job in economic development helping low-income people and areas in Washington, D.C. Faced with few job prospects in a terrible economy, he decided to go out on his own.

"I was working to help other people start businesses, so I was interested in trying my hand at it," says Manuel. "Also, I really liked the autonomy that comes with it, the newness of what happens every day."

Coite ManuelIn popular parts of Washington, you can find dozens of food carts parked on the sidewalk. They each sell the same things for the same prices; no one has much competitive advantage. Manuel wanted to help these vendors make more money (and some for himself) by supplying them with better products to sell at a higher profit margin. He would cook gourmet-style meats for products such as barbecue sandwiches and tacos rather than their typical fare: cheap, steamed hot dogs.

These street vendors are not the people you see selling from gleaming food trucks. Typically, street vendors are immigrants selling prepackaged foods and convenience items from old, worn-out carts. After the vendors close down for the day, they take their food carts to one of the few locations in the city that will store them for the night. One of the requirements, however, is that the vendors must restock their carts with items sold by the same company that operates these locations.

"It's literally buying from the company store," says Manuel. "It's a monopoly where they are taking advantage of the vendors. Part of the reason I wanted to get into this business was to 'take down the man' a little bit. I wanted the fight. I knew that if I treated these people with respect and introduced this new concept, I could probably get a little traction."

Slowly Manuel convinced some street vendors to partner with him and to try selling better tasting, more profitable food. "You know, I was pretty scared, jumping in, giving it a shot, really seeing what you're made of. It was challenging. I had never worked in the food industry before. I had never started a business before. It was all new to me."

Adding to the stress of starting a new business was the fact that two of Manuel's friends were following him around. He had told them about his idea and they asked if they could use his experience for a documentary film. Manuel agreed; his struggles and successes were all being captured for the world to see.

For about two years he worked with vendors to lift their businesses to the next level, but it was not working. "The flaw in the business is that those hot dog carts have been around for so long. They have old, faded stickers on them, and most everything they sell is the stuff you find in a 7-11: honey buns, muffins, Jolly Ranchers, chips, candy, soda. It's all junk food. The carts look beat up; they look old and rough. It's really hard, when that's your store, to offer something that costs six or seven dollars for lunch. To say, 'This is made from scratch.' It's tough to make that work."

Like any entrepreneur with a failing concept, he knew he had to make changes. Rather than use his commercial kitchen to cook the food himself, he decided to make the space available to others.

"When I made that shift," says Manuel, "I tapped into a bigger market of customers who are caterers and people starting food businesses. Now I have people using my kitchen to make kombucha; it's all the rage right now. I've got people making popsicles. I've got a dude making jambalaya; another making popcorn, and another making sweet tea. I have all kinds of people."

Appropriately, the first person to rent out his kitchen was a street vendor, an Ethiopian woman who wanted to sell bread from her native country.

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Dallas ChristianNot every entrepreneur is thrust into business for himself, though. Dallas Christian '03 worked on his idea for years before bringing it to market. He is the creator of the Play-ble, a corn-hole game that easily converts into a fully functional table. The idea of multi-purpose tailgating equipment is simple; however, creating the Play-ble was no easy task.

Christian had the idea in 2004 and spent the next four years tearing apart every table he could get his hands on. In 2008, he had a working prototype and applied for a patent, which he got in 2011. Meanwhile, the big tailgating fan established the e-commerce website TailgatingFanatic.com, which sells 17,000 tailgating products sporting licensed collegiate and professional team logos.

"I love college football. I love watching it and I loved playing it. I love tailgating before games, spending time with friends, and having fun. I gauge success by happiness. Some people are driven by money. Some people are driven by fame. Some people are driven by power. You have to figure out what drives you. When you figure out what drives you then you can create a business model to achieve success."

Though sheer tenacity has been a big part of Christian's success, he gives credit to his Hampden-Sydney education. "Every single business has it's own recipe for success. By having that broad education in all aspects of a business you are able to find an appropriate path to connect the dots. People coming out with just a finance degree or just an accounting degree are behind the curve because a lot of stuff that goes on in entrepreneurship and starting businesses doesn't happen in textbooks. If you have at least some idea of every part of the business, it's easier for you to make rational, well thought-out decisions."

Chris HarkerHaving a "big idea" is only part of what makes someone an entrepreneur. He or she also must be able to get that idea to market. For Chris Harker '01 and his partners at Triple C Brewing in Charlotte, North Carolina, that meant finding people with the skills they need, but do not have. "We hired a professional brewer early on in the process, long before we opened, to make sure we knew what we were doing, buying the right equipment, getting set up the right way. We've learned a ton of stuff from him and count our stars that we found him. Hopefully we can make the same kind of choices with employees moving forward."

Harker and his partners have relied on many friends and family for support too. His brother is a general contractor and built Triple C's facility. His father is also in on the act: "He works as our unpaid accountant, spending 40, 50, 60 hours a week on our behalf. It's just a team effort."

Though they have been open for less than a year, Harker and Triple C Brewing have hosted numerous charity events as well as many Charlotte alumni who turned out to watch streaming video of the Macon Game on the big screen. By partnering with local charities, Harker says he and his partners can help their community while exposing their brand to new markets.

David CarterNineteen years ago when David Carter '93 co-founded The Graphic Cow, a custom design apparel printing company, he and his partner Clayton Hunt (who attended Hampden-Sydney for one year) also sought out people with the talents they needed. He says, "I don't have a lot of great skills: I can't draw; I'm not creative; I can't do the great artwork that our great designers do. I'm not someone who is inherently talented at setting up a machine and running the presses. But I think a lot of an entrepreneur's talent is to go out and get people with a lot of different skill sets and to position them like a coach on a football field."

Carter says he has always been the kind of person who liked selling things. "I was one of those kids selling Now-and-Laters in elementary school and selling baseball card collections in my teens. Then I was designing t-shirts at Hampden-Sydney to sell at the girls' schools. I saw that the Hampden-Sydney brand had some value on apparel at the girls' schools. That was my indoctrination into the apparel business."

Rather than invest heavily in equipment, Carter and his partner used their seed money to hire talented graphic designers. He adds that over the years, he has paid some employees more than he was making.

"Entrepreneurs want to get paid from the value creation," says Carter, "not from the paycheck."

The Graphic Cow started as a simple t-shirt company and has grown into innovative apparel company that works with a variety of organizations, including the fraternities and sororities they started with in 1994.

Charlie BurroughsCharlie Burroughs '04 understands the value of working with a team. As the CEO and a co-founder of Back Bay Brewing Company in Virginia Beach, he often seeks advice from his four partners. "The nice part about having partners is being able to get their point of view on a problem. Everybody brings a different skill set. I've never run a small business before. I like to say that I'm the head honcho, but I am so far from the head honcho. I am trying to figure things out day by day, and I get a lot of guidance from my partners who already have businesses and who have been in business for a while. They have guided me on a path to figure this thing out. As much as I would like to say this is all me, it's not; this is a real partnership."

Despite the recent craft brewing boom, there were no craft breweries in Virginia Beach before Back Bay Brewing. "There are some in Hampton and Williamsburg, but not Virginia Beach. Two of my partners have a lot of contacts in the restaurant and bar business, so we saw an opportunity to make this market our own."

"When I go out and make another sale, get another bar or restaurant to carry our beer, it helps my self-esteem," says Burroughs. "That's how you build momentum. You always have to be growing or at least be thinking about the next move." Back Bay Brewing, which Burroughs and one of his four partners conceived while sitting in a duck blind, has been open less than a year and the company is eager to establish itself as Virginia Beach's staple brewery. They have ambitious expansion plans, but Burroughs says they are excited about the challenge.

Mike ConlanSo far, Mike Conlan '01, the founder of and operator of the building supply brokerage Widgeon River, Inc., has taken a different approach, doing nearly everything for himself. Unable to find a suitable person to create his company's e-commerce website, he taught himself how to write code while he was busy growing a business that connected do-it-yourself homeowners with their local lumberyards. He now sells a variety of products across a number of websites.

"A friend of mine who was working for an electrical company said the Dyson Airblade hand driers were selling like hotcakes. Because I had already helped another buddy with some e-commerce stuff and I had taught myself how to code, I asked my friend if he could sell the driers to me. He said, 'Yeah.' I started selling those three Dyson hand driers and now I'm up to 300 different makes and models on my website handdryersupply.com. It's probably the biggest part of my business right now and I'm getting ready to expand it to do other commercial products."

Making that first sale as an entrepreneur is incredibly rewarding. Conlan was away from work when he made his first sale, but remembers it well: "I was out hunting, and the system was set up so when someone placed an order on-line I would get a text message. I was sitting out in the woods and I get a text message saying I had sold two hand dryers to the National Institutes of Health in Washington, D.C. I sat there and thought for a few minutes that I was on to something. I still get a little tingle every time I hear the chime of my text."

Tygh BailesAt Pennington & Bailes, an upscale collegiate apparel company co-founded by Tygh Bailes '99, the two partners sent a mass email to all of their friends and families on the day they officially launched their website selling a limited selection of embroidered stadium pants. The first order came in that morning.

"A man from South Carolina ordered a pair of Gamecock pants," recalls Bailes of their first sale. "Our second order that morning was an Alabama pant. The third pair of pants were Ole Miss pants. I remember the first wholesale account was a store in Mobile, Alabama, and they bought Alabama pants and Auburn pants. You definitely remember times like that. It's fun. It makes it worth it."

Since that first pair of stadium pants, Pennington & Bailes has expanded to include many more products representing more colleges and universities. They now also sell belts, neckties, the solid-colored University Pant, and branded Oxfords, as well as women's skirts and polos. They have also expanded the selection of college and universities. Once focused solely on the South, Pennington & Bailes offers upscale clothes branded with Penn State and Notre Dame.

Tulane PattersonThis continual desire to develop new ideas and to think about the future resonates with Tulane Patterson '78, the owner of Generation Solutions, a Lynchburg-based home health services and products company. He says, "I'm a person who likes to start things, and that is typical for entrepreneurs. We like to experiment. We like to try things. We are constantly thinking, constantly working on ways to improve. I am not an administrator. I am not the guy to run things. I am the guy to start things. Entrepreneurs are kind of like inventors in business and that fits my personality."

Generation Solutions provides home health care services and products; it is also the parent company of The Scrub Shoppe, a retail outlet for professional nursing uniforms.

Patterson sees his company as more than a business; it is also a way to genuinely help people who need it. So, for him, creating a successful business means more than just making money. "Certainly I want to be profitable, but because part of what I do is a ministry and it is taking care of people in their own home, a big part of success for me is reputation-not personal but company. Much of our business is word of mouth and if we take care of your mother and you're happy, you're going to tell other people. In Lynchburg and Roanoke and other small Virginia cities you live and die on your reputation. My success is built upon one happy family after another who are telling others."

David Carter, who says he spent much of his 20s driving The Graphic Cow's company van as his personal vehicle because he could not afford his own, knows his early sacrifices have paid off because he has created something sustainable. "I believe that for any entrepreneur what you want to do is know that for your customers you have created value and for your employees you have created a culture they are willing to support with much of their time."

Chris Harker of Triple C agrees. His sacrifices have been significant-he has not had a vacation in more than a year and works six days a week- but the rewards are even greater.

"It's easy to look at the financial numbers, but we are more concerned about the long term and doing things right, being able to make a difference in the community. We fully realize how fortunate we are to do this and to have the access to the funds and everything that we did. We certainly want to pay it forward, and it's an easy thing to do. All we have to do is pair up with charities and give them a portion of our sales. It introduces our brand to people who wouldn't necessarily see it and it works out for everybody. I'm not worried about making a million dollars or having a beach house somewhere, I just want to be comfortable and be doing something I enjoy doing. It's really nice to have found that."

"When I first started out it was kind of scary," says Conlan. "All of the sudden you're saying that you're working for yourself. I can't tell you how many nights I've stayed up until three in morning writing code, adding products, doing research for the next day. After putting in ridiculous hours for five years, it's all starting to pay off. I love running a business and making the decisions that need to be made. I like the sales and the challenges and the competition. I guess I could go back and work for someone else, but it would be hard to. When I'm the boss, I don't have to go ask for permission or opinions; I just do it. It would be hard to go back."

The success that many Hampden-Sydney entrepreneurs have found comes from their willingness to take on risk as well as their preparation. Bailes says, "At Hampden-Sydney you have to take a wide variety of classes. You have to take classes that might not be your natural strength. I had to take science classes; I had to take math classes. I'm not a math and science guy. We had to take rhetoric. Most of us hated it, but I really enjoyed it though a lot of guys I know didn't like it. Nonetheless, we had to learn to work hard in subjects that are not our natural strengths. If you're a small businessman, you have to do everything."

So the Hampden-Sydney curriculum works for entrepreneurs, but how does the Hampden-Sydney mission "to create good men and good citizens" transfer to the cutthroat world of business? Tulane Patterson puts it like this: "When starting a business, you can be as honest or as dishonest as you want to be. There was a time in our first year of business when a client died and we owed the family some money back. My accounting person asked what to do and I said, 'You're going to give it back to the family because it's not ours.' I could have said, 'Don't do anything and we'll just keep it.' There's something to be said for running a clean, honest, ethical business, and you get to establish that as you start a business. You have to decide what kind of person you are and what kind of business you want representing you."

* * *

Coite Manuel set out to make Food Chain a conduit for subsistence food cart vendors to build better lives for themselves, but it did not work out. Nonetheless, he got a lot out of the experience.

"I have such a deep respect for someone who can day-in and day-out for 20 years go and sit in a small box for 14 hours a day just to provide for their family, so their kids can have a better life. The cliché immigrant story is played out every single day in Washington, D.C., in those hot dog carts. I say this truthfully: it was an honor for me to work with the people I did. That's why I got into this business. I like to cook but I'm not a great cook; I wasn't dying to become a caterer. This was much more a social enterprise for me."

The documentary Dog Days captures the struggles of the street vendors and of Manuel's attempt to help them build better businesses. It also tells the story of what many entrepreneurs go through: ideas, experiences, failures, new ideas, resurgences, and successes.

"The need that I am meeting right now is not necessarily the need that I sought out to fill when I started but I'm still doing economic development. I'm helping people in what I am doing now. What's the number one business that people want to start? It's a restaurant. And that's the number one business that fails in America. That's because it's very risky, it costs a lot of money, and, a lot of times, it's people who have never done this before. It's like a recipe for disaster. So, I'm like the training wheels. I have had tons of people who 'graduate' from my facility. They move on and open their own space, but now they know how much money they can make, how much money and time it takes to produce a certain amount of food. They have contacts in the industry. A lot of times, they are making money from day one. That's the need that I'm filling, and I love it."

As for those vendors parked along the sidewalks of Washington, D.C., Manuel's entrepreneurial spirit shines through: "Things aren't done with the vendors. That story's not been written yet."