You know the saying: I’ll know it when I see it. Well, I never knew a “serial entrepreneur” until I met Hank Datelle.
With all the ventures he’s started, Datelle might have an addiction when it comes to developing businesses, from software to packaging, and then trying to sell them after about five years – that is if they last that long.
In this economy, with many employees dreaming about leaving corporate America to create their own future, what an Atlanta businessman like Datelle, 67, learned from his failures and successes can be helpful.
And for a journalist like me, who has spent most of his career covering large companies, how Datelle went about starting small firms was surprising, at least in one respect. He relied so much more on family and friends than I anticipated, and so little on more traditional sources of funds from banks or venture capitalists.
But to do that time and time again – not a bad model during this credit crunch – Datelle said it’s critical to be trustworthy.
“Ninety percent of my success comes from friends and family. Never burn your bridges,” he said recently.
He repeatedly tapped his adult son and daughter for their ideas and hard work, and a few close friends for capital.
Datelle’s biggest success came after his daughter kept plying him with vodka and cranberry juice on a Cape Cod beach, as she tried to convince him to start a workers’ compensation firm.
She had worked in the field and knew employers often lost money by needlessly paying for prescription drugs that had nothing to do with an employee’s injury. Since she identified a clear need – a potential market – one of Datelle’s key ingredients for success had been met. Another key – minimum competition – also was met.
With the help of Datelle’s son, a software whiz, they created a computer system to immediately identify the covered drugs when an employee went to the pharmacy. The company documented how much it saved employers every month – an effective sales tactic for building business.
From the start in 2001, the business grew rapidly each month. Revenue, which hit $300,000 the first year, climbed to $2.2 million the second year. By the time Datelle sold out after five years, he said annual revenue was approaching $100 million.
Datelle said the fast revenue increase was a key sign that continuing to invest in the company would pay off. He only believes in taking a “calculated risk.”
His initial $500,000 investment returned more than $25 million to him. But he would be the first one to tell you that he did not always hit home runs.
Armed with a doctorate in education from UGA, Datelle lost money after launching a company two decades ago to sell multimedia software to school districts to help kids learn to write.
He said he made several mistakes, including trying to mix a business motive with an altruistic one. He also did not recognize that his prime target – school districts – did not have readily available funds to pay for the innovative software.
Currently, Datelle is involved with a Honduras packaging company that sells seed and feed bags in the U.S.
Will he ever retire?
“As long as I have energy and good people who have confidence in me, I’ll continue,” he said. “I’m afraid I would fade fast if I wasn’t active.”
That’s one of the other key ingredients – lots of energy.
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