Three Start-Ups, a Year Later

THIS has been a gut-wrenching first year in business for three entrepreneurs whose start-ups were profiled in this column last December.One has failed. Tina Ericson recently shut down her online T-shirt store, Mamaisms Gear, in Wilmington, N.C., overwhelmed by the strains it was putting on her corporate job. “It seems like it was only yesterday that we were discussing our plans to make $100,000 in revenue the first year,” Ms. Ericson said. “We made some very expensive mistakes.” The owner of the second, Caitlin Adler, is still hard at work, even as she notices greater frugality among customers at her Sweet Bites Bakery and Café in West Acton, Mass. She has cut payroll costs, expanded her menu and lengthened her hours. “While I still have big dreams for the company, I am more realistic, and take each day as it comes,” Ms. Adler said.

The only one bursting with confidence was Jeff Takle, whose property management software company in Somerville, Mass., was on the verge of collapse six months ago. As he was trying to figure out how to keep it afloat, he was hospitalized for a viral infection he contracted on a business trip to India, and used the time to rethink his strategy.

“I came out a supercharged new man,” said Mr. Takle, the founder of which aims at small landlords with one to five properties. lawyers in dominican republic

Last December, when this column first turned the spotlight on these three start-ups, even the doomsayers had no idea how fast the economy would spiral down.

Certainly, Ms. Ericson did not. She predicted sales in 2008 of $100,000 at Mamaisms Gear, which intended to offer a broad line of T-shirts and other products with “Mama Says” slogans like “Quit Whining.” She also talked about creating a Web site for women and starting a consulting company for the financial services industry.

Ms. Adler was upbeat, too. She fretted about unexpectedly high payroll costs and other setbacks, but figured weekly sales would climb from $7,000 to $12,000 or more by mid-2008.

Nor did Mr. Takle express worries. He said his Web-based software would help small landlords manage their rental properties more efficiently, and projected revenue of $10 million or more within five years.

But by June, with economic growth slowing, all three business owners were scaling back their ambitions. Ms. Ericson had abandoned her plans to create an Internet community for women and to start a consulting firm to concentrate on marketing her T-shirts to boutiques. Ms. Adler had nudged weekly revenue up to $8,000, from $7,000, far short of her goal. And Mr. Takle lamented that his venture was dangerously low on funds.

Now, though, Mr. Takle is enthusiastic again. Even the recession is working in his favor, he said, by turning homeowners reluctant to sell in a bear market into “accidental” landlords.

After recovering from his illness, Mr. Takle, 34, switched his focus from searching for new customers to improving his Web site’s content. He formed a partnership with a Boston Web design firm, paying in equity, and he hired outside companies to do his computer coding.

He is now offering services — like rent collection by credit card, access to a list of a million maintenance providers and the placement of landlords’ advertisements on the top 23 rental Web sites in the United States — that he says his rivals cannot match.

While his rivals charge $1 to $5 per property per month, he says, he charges $20 to $50. As a result of his site’s upgrade, he says, the conversion rate of visitors into customers has increased to 8 percent, from 1 percent.

RentingYourHome.com now has nearly 1,000 customers, and Mr. Takle says revenue in the second half of this year should approach or exceed $120,000, from $30,000 in the first half. He says he believes he is on track for $500,000 in the first half of 2009.

Mr. Takle’s tale of reinvention failed to sway Janet Portman, a lawyer and an expert in landlord-tenant law at Nolo, a provider of legal information for consumers and small businesses. “He promises too much, and he can’t possibly deliver what he says he will,” she said. The special features he boasts of do not really add much value to his software program, she said. But her main criticism was that his product would never be able to provide what landlords needed most: personal contact with tenants and their previous landlords as well as the people they list as references.