What drives them?
Why would a new father with a career at a large downtown law firm decide to chuck it all and make hummus for a living?
Where do you develop the confidence to take the telecommunications industry by storm?
As the Dallas economy continues to thrive, the entrepreneurial spirit continues to grow along with it. Look around. You’ll find new companies and corporations popping up everywhere in our neighborhood.
For some entrepreneurs, it’s a natural progression to take the step of creating a new business. For others, it’s a huge leap of faith.
Here’s an inside look at what it took for two neighborhood business people to put their entrepreneurial spirit to the test.
Taking the first steps
Lakewood resident Paul Schweizer’s career in the food industry began quite by accident. He and his wife had created a recipe for a hummus dip popular with many of their friends and family. Hummus is a Mediterranean product made from garbanzo beans (easily their best use), and the Schweizers had combined it with Southwest spices that gave it an interesting flavor.
People raved about it. And Schweizer says he wondered if someday he might be able to successfully market the dip.
But Schweizer is an attorney. He loves the law, and his dream had always been to practice law with a large, prestigious firm. After graduating from the University of Texas Law School in Austin, Schweizer signed a deal with a just such a law firm in downtown Dallas.
His future looked bright, but there was a catch.
Schweizer found that with the prestige also came long hours, high stress and office politics. Working with a large firm was taking a toll on the time he valued with his family — and he and his wife, Suzanne, were expecting their first child.
In order to keep the perspective he wanted in life, Schweizer knew it was time to make a drastic change. He says his philosophy has always been “to follow what you want to do.”
“It was a little frightening at the time,” Schweizer admits. His father was even less enthusiastic about this bend in the road … but his wife and her parents were game — and off the launching pad came a product called “Yummus.”
Schweizer started his new career in the food business in September 1999, became the father of a baby boy in October 1999, and quit his job at the law firm two weeks after that. Enough to leave a guy breathless.
Not so for the founders of White Rock Network, who named their new internet hardware company for the nearby Lake for which they’ve invested corporate dollars to boost neighborhood preservation efforts.
Though he had never started a company from “a clean sheet of paper” before, Co-Founder and Chief Executive Officer Lonnie Martin felt it was the inevitable next step in his career.
“My life prepared me for this moment — I think it’s best to start a business that you have experience in,” says Martin, who set out with co-founders Tony Masella, Rick McKinney, Tony Farinholt, Rick Wank and Greg Lowe — all career telecom businessmen.
The group has devised “a new type of metro-area optical transport equipment, one that allows fiber networks to be built in a modular fashion,” a state-of-the-art twist in the cable of the competitive telecommunications market. (Martin says White Rock’s products would not have been feasible even one or two years ago.)
In contrast to the hard left turn Schweizer took, Martin spent 20 years as a key executive in several carrier-class and enterprise network equipment companies. To him, this is just the next stage in the same career he has always pursued; only this time, he’s at the helm.
Says Martin: “I don’t think it (the decision) would have been this easy to make for someone without the experience and knowledge. I don’t think it would have been as easy for someone in their 30s to do this just because of the lack of experience.”
In truth, starting out in a new industry did throw quite a learning curve for Schweizer. Research had to be done quickly to make smart decisions about marketing and production.
“At first, my vision was simply to package this product, get it on the shelf and then it would sell. But I quickly learned that there was so much more,” Schweizer says.
“I decided to incorporate the business in April 1998. But before it was on the shelf, I knew I needed to market it. So in July 1999, I began trying to get into doors of purchasing agents for grocery stores. There are still many people who have not even heard of hummus, so it was difficult,” he says.
Schweizer found that once people tasted the products, they were interested in talking with him about putting them on the shelves. Then, rather than manufacturing the products himself, Schweizer found a co-pack, a company that produces the products to his specifications. Networking with others in the food industry helped him find a company he could trust to produce his products.
So Yummus hit the shelves in September 1999. But the next challenge came in getting the retail customer interested in his products. And, as Schweizer says, no one can market a product like the person who created it. So he has become a hands-on marketer, even to the point of handing out samples in grocery stores. Of course, he hires others to help him too, but Schweizer says he likes meeting people and talking about his product to the people who buy it.
The Payoff?
White Rock Networks expects steep growth — quickly. This is good news to For the Love of the Lake and the White Rock Marathon, two of the neighborhood groups who have relied on the company for support. Martin says he keeps track of his competition and there are now about 40 such companies, but he believes the field still is wide open. A number of competitors, including major optical networking developers ADC, Alcatel, Lucent Technologies and Nortel Networks, are feverishly scrambling to develop similar products.
On a smaller scale, although in a market that is also formidably competitive, Schweizer’s challenge is different. While he too has a unique product, there is not the automatic awareness level or demand benefiting his fellow neighborhood entrepreneurs.
“The most difficult issue has been producing a high-quality item on a relatively small scale that can be competitive from a cost perspective with other arguably similar products, i.e. hummuses, refrigerated dips, sandwich spreads, etc,” he says. “If consumers don’t recognize the quality or other differences between products, they buy what is cheapest. Our product is exotic enough that building a consumer base in Dallas, for example, can be expensive and difficult. We have to teach consumers what sets Yummus apart and how to use it.”
His company, now called SUPA Foods, markets what he describes as “a gourmet, upscale and all-natural refrigerated dip, spread and condiment with a unique combination of healthful Mediterranean and Southwestern themes.” Flavors include Mexiterranean!, Tomate Del Sol, Jardin Picante, Southwestern Roasted Garlic and the Original Flavor. All are made with natural ingredients and no preservatives, making vegetarians and the health-conscious one obvious consumer base. There are only a handful of dips on the market that are all-natural, Schweizer says, plus Yummus has a shelf life of four months rather than four weeks, as with most of his competitors. The upswing in popularity of Mediterranean products has also provided a boost.
As a result, the Schweizers have now recouped the initial $100,00 investment from their personal savings; by contrast, White Rock Networks secured outside funding of more than $40 million for their products, scheduled to hit initial trials in Spring 2001. But to each his own. Schweizer says he enjoys “being small,” but perhaps would like to grow his company later on and would look to venture capitalists in the future.
Even his dad’s skepticism began to fade when Whole Foods became SUPA’s regional distributor. Says Schweizer: “Yummus is currently marketed through Whole Foods Markets Southwest, which region includes Colorado, New Mexico, Texas and Louisiana. We are constantly evaluating other opportunities in Texas and elsewhere, but right now we prefer to keep the product exclusively with them.
“Now a publicly traded company, Whole Foods was once where we are now and it wasn’t that long ago. Their people understand where we are coming from as a small business in the natural foods industry, and they have worked closely with us at all levels to help us gain a foothold through their stores.”
If you try this yourself at home …
Advising other budding entrepreneurs, Martin says it is important to hire ancillary companies that are the best in their professions, especially in regard to investors. “Whom you choose sometimes can be everything. Choosing a first year investor is almost like going to the right business school,” he says. “It helps give your company more credibility. And don’t choose just one — it can be the kiss of death. You’ll need two or three to start, because if that one is a bad investor, you can seldom get the additional funding that’s needed.”
Schweizer shied away from outside money, an option given the size investment he required. For a venture the size of SUPA Foods, his priority was ensuring that he would have the freedom to determine how the business would be run, as well as to have more control over production and creativity.
Another start-up basic, advises the White Rock Networks CEO, is “get the best law firm.” That Schweizer had covered — being a kind of “law firm” all by himself. In fact, true to his philosophy of following what it is he wants to do in life, Schweizer still practices law from time to time. Martin’s needs were somewhat more cumbersome and highly specialized.
He says: “We chose a top high-tech law firm and it wasn’t even a question. They helped get us through a lot in a short amount of time because that’s what they do best. The same is true with real estate. In a fast growing business, it’s tough to predict needs, and it’s tough to minimize cost and not run out of space. Banks are important … and so is an accounting firm. Again, go to the best.”
Schweizer says he has learned many important lessons along the way. For a one-man entrepreneurial leap, he emphasizes the importance of his family’s support, especially from his wife who grew up with him in Lake Highlands; the couple attended White Rock Elementary and Northlake Elementary respectively, before going on together to Lake Highlands Junior High and graduating from Lake Highlands High School. In an interesting twist of family history, he and Susan live in Lakewood in the house that his maternal grandparents built and his only sibling, Cindy Schweizer, lives in the M-Streets in the house that his paternal grandparents built.Both sets of parents also still live in the neighborhood.
Schweizer says: “Suzanne has been an integral part of our success, despite being well occupied with Will, our 15-month old, and being due to deliver his brother in early February. The company wouldn’t be where it is without the tremendous work she put into it, especially on accounting, office management, and other administrative matters.”
Schweizer says that being an entrepreneur ultimately comes down to relationships: “While there needs to be a good product, it isn’t strictly about low price or the best quality.
“Rather, success comes down to relationships, to who will take a chance and open the door to you.”
