Interviews at The Entrepreneur Center @NVTC

Like so many people before him, Rob Miller came to Washington to be one thing and ended up doing something completely different. The Canadian wanted to be in the foreign service or work as a civil servant, but in time he got lured into the...tech world. These days he makes his living selling software to associations. Avectra, the product of a merger in 1999, has 140 employees and expects to see $18 million in revenue this year, up from $14.5 last year. All with no institutional investors. Avectra recently was crowned Hottest Bootstrap by NVTC in its annual competition. Miller, 40, who had moved with his family from Winnipeg to Owatonna, Minn., landed in Washington in 1988 to get a master's at American University. He worked for OMB as well as the National Association of Broadcasters before launching a software firm, Ablaze, in 1994. In 1999 it merged with a similar company to become a 30-employee company, Avectra. Not only has Miller not lost his Canadian accent, he hasn't been able to shake his love for ice hockey. You'll find him playing late at night for the Red Wings in an adult ice hockey league. He recently spoke with Bisnow on Business about the best way to bootstrap a company and why communication is key with customers.

Tania Anderson for Bisnow on Business: How have you been able to survive without venture capital?
We've always made money but we've always wanted to grow the business and make it something real important and something to be proud of. We take all the money that we make and, rather than give it back to the founders, we pile it back into R&D. Essentially we've been funding the type of development that many organizations would do through private funding.

What ingredients should a company have to bootstrap?
You want a mix of people who can manage the business as well as people who can actually do the work. If you just have people who can manage the business, you've got to pay people who can do the development or write the reports or whatever is the core business. If those people aren't in the core ownership group in the beginning, it's going to be hard to bootstrap.

When you merged the two companies, did the founders decide to bootstrap from the beginning?
We agreed that both companies would put up $375,000 for the new company. Both companies had a good pipeline of sales and revenue coming in to cover our expenses with money left over to pour into R&D. We believed we had our finger on something that was really worth chasing. We didn't want to give away the key to the car before we built it. Now we're in a position where we can go out and get mezzanine funding that is much less onerous than if we would have gotten money back then.

What exactly does Avectra do?
We write software for associations and non-profits to manage their memberships, to run big events and exhibitions and fund raising. Some associations certify their members for certain things so it handles that. It also runs their Web sites. Members can go online and buy things from the association. They can update their profiles. They can interact with other members.

What are some other business lessons you've learned?
Communicate with your customers. When we merged our companies, we did a road show to say why we did this, what we were going to do, how this was going to affect them. When we decided that we needed to start sunsetting our old products, we wrote them a letter and gave them three or four years to make a decision to move. You can never over-communicate with your customers.

What's the best way to do that?
Having a monthly users group. Maybe every other month, an executive comes and tells what the company is doing. What is the future, why are we doing what we're doing and then be willing to be a dart board if they have issues. It's OK to say, 'I don't know.' It's OK to say, 'I'm sorry, we're ready to start a new version of our software, we tell our customers what we're planning, get their feedback and then we communicate and tell them what was done.

What is a challenge you've faced and how have you handled it?
The release of the on-demand product was an interesting one. Customers thought we were off doing something that was not in line with the overall strategic direction they thought the company was going in. I had to go on a little bit of a road show and we had to over communicate that the point of this thing was to improve the company. The customers were confused and they were worried that all of a sudden we were going to be sending them a sunset letter on the netFORUM product and that the on-demand software was the new product.

How did you get interested in the tech business?
I went to American University to get my master's in public administration but while I was there I was getting a little bored. I asked if I could get an information systems concentration. They didn't have one then but they said I could take computer science courses. After I graduated, I won the Presidential Management Internship, which allows master's students to pick whatever government agency they want to work for. So I picked the Office of Management and Budget. Richard Darman was the budget director and he had a desire to be the first cabinet level official to take a laptop to the Hill with budget data on it. It was 1990 and laptops were still the size of luggage. We had consultants working for us but [Darman] wasn't pleased with their speed and he sent me to manage these people. Pretty soon I was in there writing the software with them. I just found that I loved it.

What did you do after the internship was over?
The only place that would hire me was the National Association of Broadcasters. I worked there for a year and a half and during that time we wrote the very earliest alpha version of what we have now at Avectra. I got swallowed up by the tech community of Northern Virginia.

What kind of advice would you give someone trying to launch their own company?
Narrow your focus. I see so many people who, when they're starting a business, want to sell to health care and Fortune 500 companies and government and they don't have a clue about their market. They need to narrow it and then narrow it again. You can target your marketing and your sales operation That way you can be really good at something.