Entrepreneur Advice: Lee Segal www.klick.com

About Lee Segal

Grew over 1,800% over a 5 year period ----- Since 1997, Klick has been providing internet solutions, predominantly for the pharmaceutical industry, but more recently in financial services, government, retail, and electronics. Over the past several years, the company has expanded its service offering to include e-learning, user experience and audience development in an effort to provide turnkey solutions with a single point of accountability. Among the services that Klick offers are corporate and brand portals, web-based application development, and knowledge-management systems. Klick is now proud to list the top ten pharmaceutical companies in Canada as its clients. Inspired by Challenge and Driven by Results, Klick Communications builds business solutions using proven and practical technologies. The company takes an innovative and creative approach in order to deliver remarkable results on-time and on-budget. With offices in Toronto and Montreal, Klick has formed long-term relationships with leading Fortune 500 companies.

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Recent Article:

Create A Reason For Prospective Customers To Talk With You
- For more on Lee Segal visit www.klick.com

How Klick Was Started - With my partner Aaron Goldstein, I started my first company when I was 12 years old. The business was called ByteDoctors. It was a small development company. We had one employee beyond the two of us and some of our first projects included real estate software systems. We soon branched out and started helping with mail systems and then accounting software for real estate. In 1993, when I was 14 we met Peter Cordy who was running a successful traditional agency that was beginning to provide customers with online solutions. Peter landed significant contracts, but was running into challenges delivering on them, so he hired us. He soon acquired us and after a string of acquisitions, I was eventually named CTO of a public company (MotionWorks). The company was involved in delivering large engagements for SegaSoft and Fox Interactive but it wasn’t very profitable. There was a little division of the business focused on health care that was making money but they completely ignored it. The opportunity was recognized and eventually we left to start Klick.

Advice For Startups - Create a reason for a prospective customer to talk with you. Most of the professional services firms competing with our organization provide credentials presentations and end such meetings with their hands out. Our strategy was entirely different. We focused on understanding our marketplace and creating value by educating our customers. From our early beginnings, we invested effort in building strong relationships with industry thought leaders and key industry associations. We wanted to get accrediting bodies, advocacy and other special interest groups to partner with us. We were able to build several exclusive relationships and it really worked for us when we were first starting up. We are now starting to target the United States market using identical tactics and it’s again proving to be a successful strategy.

Focus on your strengths. The desire to expand led us to talking with our customers to ask them what they see as our strengths. We started building interactive solutions and over time our customers recognized our incredible capability in application development and it was our clients who pushed us in this direction. We managed to secure several key master services agreement with organizations ranging from Pfizer to AstraZeneca, Amgen and Schering. In some cases, customers were running into problems with their existing agencies and we were able to get clients to consolidate all web development services with us. It worked beautifully for our customers because it enabled them to standardize and provide a consistent quality to their stakeholders. It was fantastic for us because it gave us a predictable steam of work, which over the past 10 years has translated into customers for which we manage hundreds of web initiatives.

Keep an eye out for large competitors. Over time we needed places to grow. In our earlier days of flying under the radar we could avoid confrontation with the major consulting groups. As we grew, we needed to be very sensitive and ensure we didn’t infringe on their sandbox. This is predominantly why we have stayed away from ERP, CRM, and financial systems – their bread and butter. That said, while we didn’t intrude on their core, we have web–enabled many of these systems.

Think about expansion opportunities well in advance and prioritize. Like any business, we examined many potential avenues that provided opportunities for growth. We looked at getting into the United States by leveraging our relationships with the Canadian affiliates, but we deferred until we could totally commit. Another option we explored included looking at healthcare as broader than the pharmaceutical vertical that we already dominated. Hospitals, government, and associations were all potential targets. But again we were concerned about the length of the sales cycle and the political variables outside of our control. Ultimately, the path of least resistance for us was to expand our range of services. We continued to service the same target market but sold more to them. We had already established ourselves as a reputable supplier and it was easy for our clients to justify expanding our share of wallet.

Manage your growth carefully. One of the things that we learned is that even if you’re growing profitability, when you begin to grow too rapidly, time set aside for managing the finances begins to encroach on where time should truly be invested; which I believe is always in front of your customer.. We decided to avoid that and put in place a policy that has been the hardest for us to discipline. We decided never to grow more than 60% and I’m proud to say that on several occasions we stopped accepting new work. It’s worked for us. We have been profitable for every year since our inception and our infrastructure has always kept pace. One fantastic side effect of growing this way is that almost all of our new business has been through word of mouth. We’ve never had a marketer on staff, although we may have to reconsider this position soon.

Build goodwill. It’s important to build very good relationships that generate a lot of goodwill. Our goodwill generated growth. Goodwill is one of the key things that we do differently from our competitors. To ensure goodwill is built we train our people very differently. Most organizations have values that aren’t meaningful. It doesn’t give people any real guidance. Our principles are focused on nurturing the client relationship. We value things like customer empathy and the ability to build a personal relationship with them. We have to understand our customer’s motivations, environment, pressures and work to create value beyond what is contracted. We are regularly told that we are more responsive than our counterparts and that we’re more creative. We train all our employees into the Klick culture. This begins with employee onboarding and is supported by every process in our organization. For example, we begin every project by thinking through how we’re going to go above the minimum and we discuss what we can do to ensure accountability on both sides. It’s important to only have pleasant surprises while working on the projects.

Chemistry is so important. We have a wonderful and highly effective partnership dynamic. Peter is in his 60s and is a creative visionary individual. I’m on the client services end. Aaron is a much more analytical person and therefore responsible for all operations. We compliment each other, there is a high level of trust, and we’ve created a comfort level between the three of us. It’s been a winning formula. In our case I’m pretty fortunate that Aaron and I are also closest friends, we’ve known each other from childhood. Similarly, in addition to being my mentor, Peter was first my friend.

Mistakes To Avoid - Focus on fewer customers. There are so many great learnings that come with gray hair, but one of the most impactful for us has been that fewer great customers are of higher value than bringing on a lot of customers. Most entrepreneurs go down the wrong path, believing that to grow you need a lot of great logos. A few excellent relationships can form a wonderful foundation for building a great company. You have consistency and predictability. It is a healthy way to grow.

Manage costs. In our earlier days we learned how quickly your team can burn through money, even if they are highly experienced. You need to manage the financial controls of your business because expenses can grow faster than one can imagine. We built systems to mitigate such risks. We now have strong approval controls to make sure costs are maintained. Too much control and you become bureaucratic. Too little control and you have a serious problem. So it’s a delicate balance.

If I Were To Start A New Business... - I love what I do right now. I spend most of my life thinking about what else we can do with Klick. I would suggest that entrepreneurs are great because they can be very passionate and visionary, but one of the nice things about brining in an experienced management team is that you leverage their experience and battle scars. Whatever industry you’re in, bring in a team of people who are smarter and more experienced than you. There is nothing more true than the old cliché that companies are at the end of the day only as good as the quality of their people. With the right culture and team, there are opportunities anywhere and everywhere you look!

Create A Reason For Prospective Customers To Talk With You - To learn more about this author, visit Lee Segal's Website.

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