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Risk Diary: They see good, even in bad times

Risk Diary: They see good, even in bad times

Bad times in the local economy just may be a good time to open a business. At least, that's what David Busch and Rob Guidarelli believe. Despite the regional economy's ongoing struggles, the pair last year launched Tier1 Inc., which they bill as a low-cost provider of services to Oracle software users. Busch recently spoke with Risk Diary about the business.

Pam Panchak, Post-Gazette
Dave Busch, left, and Rob Guidarelli, started their own company, Teir1 Inc.
Click photo for larger image.What prompted the two of you to strike out on your own?

I had worked at Oracle for seven years and Rob had worked there for eight years. We both sold here locally in Pittsburgh. I covered the mid-market -- companies that are less than a billion in revenue -- and Rob covered accounts greater than a billion. We touched about every company in Pittsburgh that used Oracle. One of the things we had heard from lots of customers over the last seven or eight years was that the only company they could turn to for Oracle services and quality of resources was Oracle, and Oracle is expensive. We knew we could provide ... the same level of service that Oracle provided at much lower costs.

When did you actually get started? We started planning the company a little over a year ago, around November 2002. I left Oracle in June 2003, to get started. Altogether, we took from November to June to get a lot of the start-up types of things done. Robert then started work in the late part of August.

Did you do a business plan and have to seek outside funding? We have not done a business plan. Lots of people do that because that's a requirement if you're going to go out and get funding. Somebody wants to know what your projections are for your business, for instance. We weren't and still aren't going after funding, so we didn't feel we needed a business plan. Also, we're so focused on what we are doing. We understand the market and we understand Oracle.

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So if you eliminated going out and seeking money, how did you get the business funded? It's really all self-funded, and our investment is very minimal. Fortunately, we have wives who are tolerant and who are supportive enough to allow us to do this. Rob and I basically said we wouldn't take any money out of our business until it was ready. So what we do is that we take the money from the companies whose business we win, and we put it right back into the business.

What was your level for tolerating risk at the time you decided to do this? Rob and I are both sales guys. A typical salesperson's personality is that he or she is willing to take some risks. We just saw there was such a big gap in the local marketplace we could fill. Most people look at us doing this and they say, 'You're crazy starting a company in this marketplace and in this economy.' We just felt that we could generate enough revenue to keep us going.

So why do this at a time the economy is slow at best? We thought the timing was perfect because we could learn the business at a time when the economy was slow. The advantage of doing that is that when the economy picked up, we would then be ready because we worked the kinks out of our business when things were slow.

What did you do to minimize your exposure at such a tough time as this? One thing we did was stick with an industry we knew well. We didn't go around trying to do something we didn't have a lot of experience in. We're selling services around products that we already know and we are selling into a market in which we already have seven or eight years of experience. We knew what resources are available and which customers would need our services.

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What advice would you give to those who may want to do the same thing? My first advice would be to know your business. Be familiar with what you're trying to sell and be familiar with the market you're trying to sell it to.

First Published: January 15, 2004, 5:00 a.m.

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