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For Jimmy Hendricks, heading into the office is as simple as rolling out of bed.

Inside his North Park apartment, computers with large screens hum in almost every room, taped down cables snake across the floor and dry erase boards busy with numbers cover the walls. “Sell Through Knowledge You Are An Expert!” is circled in green ink on a board in the living room.

A few weeks ago, a friend’s visiting parrot called out whenever the phone rang.

For about two years, Hendricks’ home has doubled as office space for the dot-com startup he co-founded with business partner Patrick Dillon.

They’d considered dozens of ideas, including an online paperback book exchange. They eventually settled on creating an online community of graphic artists who would submit boutique-style T-shirt designs to be voted on by people around the world. Collar Free, as it was called, would print the winning T-shirts and ship them to paying customers.

Some of those T-shirts remain in their office, hanging on the wall by Hendricks’ desk. More sit on nearby shelves in boxes. It didn’t take too long for Hendricks and Dillon to realize how much they didn’t know about online commerce. Costs started running up, local boutiques couldn’t always stock their T-shirts and then “the economy went to hell,” Dillon said. Those factors forced them to reevaluate their business plan.

To get to this point, the duo had to grow the business from a website and a logo — without any outside investment help.

“You have to get money from friends and family just to cover your bills. That’s not a sustainable model,” Hendricks said. “It was payroll or T-shirts.”

Since then, Hendricks, 29, and Dillon, 30, morphed their company into Artistic Hub, which specializes in customizing software and marketing campaigns to run online contests for clients like SIKids.com. Now with five other employees who design, develop or sell those products, Artistic Hub is looking to expand.

Such leftovers like their T-shirts are the byproducts of companies struggling to grow up in the recession here. Long a region known for its biotech sector, San Diego also developed over the years a more underground web startup community.

In better years, investors were more willing to take risks on unproven ideas and funding flowed more freely in all the tech sectors. But as the economy has struggled in recent years, investors had less money available to invest and raised the bar startups need to clear to prove they are worth the risk.

In the local dot-com community and other tech sectors, coping has meant “bootstrapping,” or raising money without traditional investors.

Tough economic times breed startups at a rapid rate regardless of funding, usually because of layoffs, said Steve Hoey of Connect’s Springboard, a program that pairs aspiring entrepreneurs with mentors.

When Hendricks and Dillon launched their startup in January 2008, bootstrapping played out in a number of ways. They asked family and friends for money. They gave up high-paying jobs and Dillon dipped into his own savings. They often turned checks around just before payroll was due.

“That’s what we’re seeing with a lot of early stage companies. They’re forced to bootstrap because of the lack of investor capital right now,” Hoey said.

In May 2008, Hendricks and Dillon applied to Springboard and spent the summer reevaluating their business strategies in the program. At the end of the year, they got the call from SIKids.com.

SIKids.com wanted to use Collar Free’s software, which had allowed people to vote on which T-shirt designs they liked best, to run a T-shirt design contest of their own.

“The writing was on the wall,” Hendricks said.

It made them realize their business model wasn’t sustainable and they jumped at the chance to change it, they said. About a year later, Artistic Hub can boast of contracts with companies like SIKids.com and Raiders.com.

Last year, they brought in about $200,000 in revenue and look to continue growing, Hendricks said. That’s a marked improvement from bringing in a fraction of that in their previous business, they said.

Neither Hendricks nor Dillon had a technology background. But they knew direct sales and Dillon describes them both as idea people. The two met while doing sales and promotions in the Midwest for a cutlery company when Hendricks was still in college, and talked about starting a business together.

When Hendricks moved to San Diego in 2004, they emailed ideas back and forth and bought potential domain names. By the time Dillon moved here in 2007, he still had about 400 unread emails from Hendricks — all different ideas.

Still cautious with their cash flow, Hendricks and Dillon have made a point to stay frugal. They still don’t have the typical luxuries of an office, for one.

To combat the heat last summer, Hendricks usually woke up around 6 a.m. to turn on an electric air conditioner in every room. But running that many cooling units with about half a dozen computers kept knocking the power out every couple of days.

Such are the conditions a startup must endure. “A lot of companies would start and have their [venture capital] money and get the big office, do the big conference room. Jimmy and Pat have been very frugal to make it more successful and all their employees in it so everyone’s working on stuff together,” said Lisa Marie Kennedy, an event producer who rents out a desk squeezed in the same room as Hendricks’.

Eventually, it might be nice to move the company out of the North Park apartment to avoid the heat and in to some place “where office space is cheap,” he said. The perks would be aplenty. “(Right now) it’s kind of odd. It doesn’t help the dating life. ‘Want to go to my place? Don’t mind the computers,’” Hendricks said.

At least his computer isn’t in his room.

When will they start looking for new office?

“When someone offers us six months of free rent!” Hendricks said before laughing.

In the original version of this story, we referred to Connect’s Springboard program as part of the University of California, San Diego. UCSD launched Connect in the 1980s but Connect is now an independent organization. We regret the error.

Please contact Dagny Salas directly at dagny.salas@voiceofsandiego.org with your thoughts, ideas, personal stories or tips. Follow her on Twitter: twitter.com/dagnysalas.

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