'Leap of Faith'

'Leap of Faith'

By Janet Leiser

Senior Editor

Entrepreneur Andrew Cohen doesn't believe in the axiom, "If it ain't broke, don't fix it." In fact, he downright disagrees with it.

After 15 years in the computer industry, Cohen put his money where his mouth is. He mortgaged his family's Tampa home, talked entrepreneur John Riesenburger into joining him and opened Vertical IT Solutions near downtown Tampa.

Cohen, 44, says the company, which turned three in November, offers an outsourcing solution for small- and medium-sized businesses that allows businesses to fix their networks before they break.

Vertical IT's mantra: "They don't go down."

Today, the company has 22 full-time employees and about 300 clients. In 2005, revenue hit $3.6 million, up from $2.3 million the previous year, Cohen says.

It hasn't been easy.

"There were a lot of times when I didn't take home a paycheck, even in the second year," Cohen says. "But I had great people. I'm not an engineer, I'm a businessman. I needed to bring in technical resources so I could build a foundation."

Cohen, who worked for the Harris Corp. early in his career, established the processes, he says. "Then I hired people to take ownership of the Care4IT process, the profit management process, and stepped out of the way and allowed them to better the process. What came back wasn't something I envisioned. That was a leap of faith."

A fixed price

The Care4IT program documents a company's network, computer passwords, etc., and makes recommendations on technology upgrades. Client files even contain photographs of the computers, printers and such.

"We come up with detailed recommendations," he says. "What the issue is, what the business impact is and what it will take to fix it, a fixed price.

"We're basically creating a service experience that I believe companies really want," he adds.

Not all businesses need newer or better equipment, he says: "A lot of it is they have it, they're just not using it."

Vertical IT's clients include Bay Cities Bank, Bank of St. Petersburg, Hyde Park Capital, Wesco-Turf Inc. and the Florida Venture Forum.

"When you talk about competition, it's the paradigms of the old," Cohen says. "One of our biggest barriers today is people don't believe it can be that good. Prospects tell me, 'Hey, I go down all the time, but my guy is there. I say, 'But you don't have to go down, and you don't need him there.' "

It's a matter of economics, Cohen says. It's not usually cost effective for a business with 75 employees or fewer to have a full-time IT person on the payroll. "We're in the business of developing IT professionals," he says. "An insurance company, a law firm, they're not.

"For small companies, 25 employees and below, they can spend anywhere between $7,000 and $9,000 with us and have one of the best experiences - one they couldn't have for $30,000 a year," Cohen adds.

"People are used to being reactive," he says. "I talk to people all the time, and they say, 'If it's not an issue, I'm not worrying about it. But if you own a car, you change the oil. You can't take that approach anymore."

When a business is expanding, Vertical IT has the techs to handle the additional technology needs, Cohen says, adding, "When they don't need them, we take them away."

Business owners are not locked into a contract. They can cancel at anytime. He proudly brags that the company's customer retention rate is 98%.

"Most tech companies are intangible," he says. "We make it very tangible, very predictable. They know what they get."

When there are problems, help is available 24 hours, seven days a week. And the person on the help desk has access to the company's documentation so the caller isn't talking to someone who knows nothing about the company.

Growth plans

In October, the company opened its second office, in Orlando, to service customers in west-central Florida, including a client that is also one of Britain's largest developers, Emerson International.

"We're in a position now where we've proven the business model," Cohen says. "We've got traction. We want to expand and grow."

As the company's client base expands, Cohen expects to open other offices along Florida's west coast.

He says sometimes he finds his biggest challenge is himself.

"I'm a control freak," he says. "My biggest challenge is my ability to get out of the way and let these guys take leadership. That middle management level will be the catalyst for us to grow. I'm going to drive the vision, but I'm not going to tactically do it."

Cohen and Riesenburger worked together at Tampa's Progressive Business Solutions, which was sold to ePartners Solutons in 1999. Cohen was vice president of sales and marketing for Riesenburger at ePartners, which he says had annual revenue of $13 million when it was sold.

"He's experienced at growing companies," Cohen says. "He has sold two."

Then Cohen quickly adds that he doesn't plan to sell. One of the reasons he started his own business is so that he has more control over his business and his future, he says.

"It's about doing what you love," he says. "Getting up every morning and doing what you're passionate about."

He's also not looking for any outside capital to pay for growth.

Prior to Vertical IT, he started and ran a technology company. But he left because he had a different vision than his partners. "It got sold to a break-and-fix guy," Cohen says. "The reality was I took on too many partners, and I didn't put my money where my mouth was."

He learned his lesson. This time, he shares ownership with Risenburger, who also shares his vision for Vertical IT.

HIRING HEADACHES

Vertical IT Solutions Chief Executive Officer Andrew Cohen says one of his biggest problems running his company is finding good sales people with a passion for technology.

That's the key trait - passion, Cohen says. "Even though they've been in the business, if they're not passionate about it, they're not going to be successful here."

Vertical IT has two successful sales people, he says, adding: "But I had to go through eight people to get them."

One reason it's so difficult is "there are a lot of easier opportunities out there for sales people," he says.

"Technical skills are easy to find," he says. "But ethics and communication and truly wanting to be part of a team, that's a rarity. I guess society is breeding a lot of me, me, me."

"Once they come in, if they don't fit, you get them out," Cohen says.

One of his early mistakes, he says, was hiring people who weren't team players. Now potential employees talk to everyone in the company.

"I'm the last interview," Cohen says. "They understand the culture, they understand what's going on."