Case Study 1 - Fred & Marilynn Wilke, Sports Stats Inc

Starting Your Own IT Company

December 2, 2004

Sarah Anderson

Matt Selter

Erin Wilke

Jermaine Williford

IS 6800

Executive Summary

These days, it seems that everyone is trying to become an entrepreneur. A 2002 survey by the Global Entrepreneurship Monitor has estimated that 460 million individuals worldwide were either attempting to start their own business or managing one less than two years old. (31) Still, it is not for everyone. Approximately only about 50% of small businesses make it past the three year mark. (32) We will explore the personality characteristics of entrepreneurs to determine what it takes to become a success. Some examples of these characteristics include the following: leadership skills, passion, moderate risk-takers, need for achievement, innovative, creative, motivated, hard-working, competitive, analytical, persistent, outgoing, optimistic, adaptive, and planning. We have provided four cases studies of successful, modern-day entrepreneurs who embody these characteristics.

Entrepreneur: Definitions and Characteristics

An entrepreneur is defined as “someone who perceives an opportunity and creates an organization to pursue it. (33) The entrepreneurial process “involves all the functions, activities, and actions associated with perceiving opportunities and creating organizations to pursue them.” (33) The entrepreneurial process is made up of personal, environmental, and sociological factors. A good combination of these factors in an individual or group of individuals provides the makings for a high level of entrepreneurial ability. (33)

Personal factors include such characteristics as: achievement, age, commitment, education, experience, job dissatisfaction or loss, a high locus of control, risk taking, and vision. (33) Entrepreneurs are often overachievers. They usually show signs of entrepreneurial ability early in life, and will generally begin their business at a younger age. They are committed individuals; throwing themselves into everything they take on. They usually have a commensurate level of education and experience; both are necessary to some degree in making a business successful. Many people who begin their own business have lost a job or are dissatisfied with their present line of work. Entrepreneurs have a high locus of control. “People with an internal locus of control are those individuals who also believe themselves to be in control of their destiny.” (35) They do not just sit around and wait for things to happen to them; they take charge and make things happen for themselves. Entrepreneurs are moderate risk takers in the sense that the risks they do take are usually calculated; they do not just throw caution to the wind. Finally, entrepreneurs have a vision. They have a clear idea of what they want to happen and how to get there. These factors are only a part of the entrepreneurial process, but definitely important ones.

The second part of the entrepreneurial process is the environmental factors. These include creativity, competition, government policy, investors, opportunities, resources, and role models. (33) Entrepreneurs are stimulated by a creative environment. They are motivated to succeed by the competition around them. The government can often provide assistance to those who wish to start their own business; recent policies provide tax cuts to small business owners. Investors can also provide assistance to help an entrepreneurial dream take off. Entrepreneurs seize the opportunities around them, capitalizing on niche markets. The resources they require are usually within reach. Finally, role models are powerful motivators for those who wish to begin their own business. “Role models are very important because knowing successful entrepreneurs makes the act of becoming one yourself seem much more credible.” (33)

Finally, there are the sociological factors of the entrepreneurial process to consider. These consist of family responsibilities, networks, teams, and parents. “Family responsibilities play an important role in the decision whether to start a company. It is, relatively speaking, and easy career decision to start a business when a person is 25 years old, single, and without many personal assets and dependents. It is a much harder decision when a person is 45 and married, has teenage children preparing to go to college, a hefty mortgage, car payments, and a secure, well-paying job.” (33) Successful entrepreneurs usually have excellent networks and teams of people willing to provide assistance wherever it is needed. It is not an easy thing to start a business on one’s own. Support also comes from parents or other family members. Often times, people who have relatives that have started their own business go on to start one themselves. (34)

Most entrepreneurs can be described by the ten D’s (33):

Dream – Entrepreneurs have a vision of what the future could be like for them and their business. And, more important, they have the ability to implement their dreams
Decisiveness – They don’t procrastinate. They make decisions swiftly. Their swiftness is a key factor in their success.
Doers – Once they decide on a course of action, the implement it as quickly as possible.
Determination – They implement their ventures with total commitment. They seldom give up, even when confronted by obstacles that seem insurmountable.
Dedication – They are totally dedicated to do their business, sometimes at considerable cost to their relationships with their friends and families. They work tirelessly. Twelve-hour days, and seven-day work weeks are not uncommon when an entrepreneur is striving to get a business off the ground.
Devotion – Entrepreneurs love what they do. It is that love that sustains them when the going gets tough. And it is a love of their product or service that makes them so effective at selling it.
Details – It is said that the devil resides in the details. That is never more true than in starting and growing a business. The entrepreneur must be on top of the critical details.
Destiny – They want to be in charge of their own destiny rather than depend on an employer.
Dollars – Getting rich is not the prime motivator of entrepreneurs. Money is more a measure of their success. They assume that if they are successful they will be rewarded.
Distribute – Entrepreneurs distribute the ownership of their business with key employees who are critical to the success of the business. (33)

Despite having all of these things in place, many businesses still fail. Approximately only about 50% of small businesses make it past the three year mark. Reasons for this include insufficient funding, developmental difficulties, financial control issues, problems in sales and marketing, or just plain lack of skills. (32) Obviously, starting a business is not for everyone. “In entrepreneurship, as in any other profession, luck is where preparation and opportunity meet.” (33) Following are four cases studies of modern-day IT entrepreneurs who have what it takes to be successful.

Case Study 1 - Fred & Marilynn Wilke, Sports Stats Inc.

Fred and Marilynn Wilke are two local entrepreneurs who began Sports Stats, Inc. Fred had the programming background and initiative to launch a creative idea into a small business, while Marilynn supported the company logistically. Today their dreams have transformed into one of the most popular high school sports websites in the country.

Fred grew up as a very competitive athlete in several sports, but mainly focused on basketball throughout high school and college. Ultimately, a basketball scholarship propelled him to complete his undergraduate degree in Business Administration from SIU Edwardsville. After college he enlisted in the U.S. Military, where he served for over 12 years. His commitment in the military afforded him a chance to return to school to complete his Masters in Business Administration, also from SIUE. Fred always had a love for computers and programming. He would constantly experiment to find new and more efficient ways of doing things.

Marilynn grew up the oldest of five children which forced her to have a strong leadership role within her family. She was a very accomplished tennis player and has always been a true visionary. Her creative ideas have propelled her to begin several companies since they began Sports Stats. In 1993, she helped create a not-for-profit AIDS ministry and today she manages her own massage business. Marilynn has never been a very technical person, but she was the backbone of their company for many years.

Fred and Marilynn were married for over six years and had a one-year old son when they decided to begin their first company in 1977. They wanted the option to work from home and create their own hours. While Marilynn concentrated mainly on running the family, Fred still worked full-time as a professor of business at Florissant Valley Community College to pay the bills. They had 14 part-time employees who mainly worked on weekends answering phones and only one full-time employee other than themselves.

They noticed there was a need in the area to support high school sports. The St. Louis Post-Dispatch simply listed scores of specific games and nothing more. They incorporated a much larger picture of play-by-plays, touchdowns, sacks, and particularly the game highlights and achievements for specific individuals. The planning stage to create the company took about six months. During this time they focused on advertising their ideas to area coaches, buying a computer, remodeling their basement to run a business, and working with an accountant and a lawyer to ensure they were following specific business regulations.

The first step was purchasing a computer. They took out a loan and bought a $20,000 computer, which could be bought for $400 today. The hard drive on the computer was so small that everything had to be saved on floppy disks and was immediately printed out. At times, one article had to be held on five different disks. This was extremely time-consuming.

The next step was convincing area coaches to call in game statistics after each game at no charge. In return, the coaches would receive a weekly report and a scorebook for area schools. They recruited companies to advertise in the scorebooks to make money. Then, the scorekeeper would call in the scores to the local newspapers who paid a mere $2 for one story! They focused on football first, but eventually expanded to baseball, soccer, and men’s and women’s basketball. Several other companies had tried to incorporate advanced statistics for high school sports, but all failed. Sports Stats was several years ahead of college sports during this time period. The specific statistics they created were only used in professional sports. Although the company was immediately popular, it continued to be a challenge to make a profit.

Their largest challenge was convincing coaches to call in scores and statistics in order to meet a strict 11 p.m. deadline to the newspapers. In 1977 there were no cell phones! This required the coaches to return to their offices, homes, or use a pay phone to make a five minute phone call since most football games weren’t over until around 9:30 p.m.

Sports Stats remained independently owned until 1981 when Fred and Marilynn decided to sell the company to the St. Louis Post-Dispatch for $225,000. The Post-Dispatch was able to expand the company into a million dollar enterprise, mainly due to their name recognition, specific databases, and programming applications. The Post-Dispatch also promised Fred a part-time job which became a full-time management position within weeks of selling the company.

In 1992 Sports Stats was incorporated into the prep sports section on the stltoday.com website. Today, stltoday.com is the leading website in the St. Louis area, reaching 35% of online adults per month (). High school coaches continue to call-in scores daily in order to produce 10,000 new webpages every night. Sports Stats extended the company by selling action photos online and currently report information on over 40 different sports.

The prep sports website has become extremely popular with teenagers because they love seeing themselves on the internet. In 2003, stltoday.com had 23,000,000 monthly page views. In comparison, Sports Stats ( averaged 1,382,900 monthly page views for 2003 (2). It is noted from the chart above that the highest page views are in September and October during football season and decreases in the summer months when high school sports are inactive. There was a 23.5% increase from 2002 to 2003 in the total number of page views (2). Overall, the chart proves the increasing popularity of Sports Stats over the years.

In recent news, an article from Monday, November 22, 2004 on the stltoday.com website, stated “Pulitzer, Inc. announced [yesterday] that it had hired an investment banker, Goldman Sachs & Co., to advise the company as it explores ‘a range of strategic alternatives to enhance shareholder value, including a possible sale of the company’”(3). Analysts believe the sale of the Pulitzer company is inevitable.

A stock quote as of November 26, 2004 on (4) shows how their stock prize has increased by 17%, with shares up to approximately $64 per share. The below stock quote compares Pulitzer, Inc. to Gannett Enterprises, who is expected to buy all or part of the Pulitzer company. In a follow-up interview with Fred Wilke after this information has been publicized, he stated “I do not believe this will affect Sports Stats directly. I believe our mission and policies will remain the same if a new owner is instated”(5). No announcements have been made, as of November 28, 2004, regarding specifically what will happen to the Pulitzer company.

Pulitzer vs. GCI

Fred continues as a manager for Sports Stats and also a professor of Business and Information Systems at Florissant Valley Community College. He’s very involved in coaching competitive baseball and recently began a new baseball league for high school boys in St. Charles, MO. He also enjoys creating and designing model railroads located in the basement of his home.

Marilynn was a homemaker for several years after selling Sports Stats and then began several different career paths. She was a travel agent for over five years and an office manager at State Farm Insurance for five years. Today, she is a licensed massage therapist who works at the Spa of Winghaven in O’Fallon, MO and is also currently running her own small massage business.

Fred and Marilynn have very different, but distinct personalities. Fred has always worked 60+ hours a week for his businesses to succeed. His love for technology has been dominant in his analytical, but competitive personality. Marilynn is very persistent, outgoing, and envisions things before making them a reality. Although they are both very different, they always set high, long-term goals, trust their instincts, take only calculated risks, and have always been very careful spending money. They continue to challenge themselves and make the necessary sacrifices in every aspect of their lives in order to succeed. Fred and Marilynn both believe the most important aspect in having a successful new business is to truly believe in the product or service, and the rest will follow (5).

Case Study 2 – Randy Schilling, CEO Quilogy

Randy Schilling began Quilogy twelve years ago as a one-man company with $5000 of his personal savings. Since that time, he has transformed the company into a 45 million dollar company, with 14 nationwide offices and 300 employees that train more than 20,000 IT professionals every year. They continue to become more profitable every day. It is stated from their website that “Clients choose Quilogy when they want to access the most current thought leadership and wish to have vendor certified, highly credentialed consultants implementing their business needs.”(6)

Quilogy specializes in technical consulting with an array of full-service e-business professional services, such as creating websites, CRM, ERP, application development, offering outsourcing solutions, and then helping to integrate these solutions into companies through technical training and support. Specifically stated in a 1997 article from the St. Louis Business Journal, “[Quilogy] offers Microsoft, Powersoft, Riverton, Rational, State of the Art and Sybase products as well as the training and consulting to go with them”(8). The relationships with the aforementioned companies in combination with every Quilogy employee being vendor certified in all Microsoft applications (9) makes Quilogy highly credible to new clients.

Larger firms located in New York or Chicago have a disadvantage in the mid-west due to the distance barrier. Quilogy tends to focus on businesses ranging from $50 million to $2 billion often overlooked by these larger firms. Quilogy has achieved a niche in these middle-markets by offering real-world business needs for each specific client.

Quilogy’s main focus is in the areas of manufacturing, healthcare, public sector, and other client-specific services. Some of their main clients include the Chicago Brookfield Zoo, Seattle’s Children’s Hospital, the United States Air Force, Nebraska Public Schools, St. Charles City-County Library District, and Mario Olives, just to name a few. Each client has a different objective for improving their current processes through the technological applications offered by Quilogy.