The Entrepreneur's Journey-Eric Thomas Reflects on 20 Years of FreedomVoice
Believe it or not, the first FreedomVoice call was made July 2nd, 1996! From humble beginnings of our own, we’ve grown to help over 200,000 small businesses find their voice. These past 20 years have been quite the journey. Like any other entrepreneur, FreedomVoice Founder/CEO Eric Thomas saw a problem and set out to create a solution. In this post, we’ve asked him to share the lessons he’s learned along the way.
- What advice would you give yourself 20 years ago when you were first starting FreedomVoice?
What I would tell someone starting a company is that the most important thing you can do is ‘try until’. When you’re learning to walk, you don’t spend a day at it and then give up and settle on crawling. Tony Robbins talks about this. The people who are successful try until. You have to be focus on what’s at the end and think, “I’m going to do that until I get there”.
The other thing is that you have to think of failure as a result, as an opportunity to learn something. For instance, when FedEx started, they tried to deliver over 100 packages and only a few got there. But they focused on those successful deliveries and were dedicated to improving the numbers.
Lastly, always deal with the truth. In people’s personal lives and company lives, they want to believe what makes them feel good as opposed to whatever is true. If you know the truth, you can improve your situation. When I first started the lab supply company, I faced the truth that I wasn’t good at selling. My options were 1) quit, 2) go on sucking, or 3) learn how to sell. I went to a Dale Carnegie course. In the first 6 months after, we made $60,000 in sales and in the second 6 months about $600,000. I think for anybody trying to start a company that knowing how to sell is critical. Sales isn’t about selling stuff, it’s about providing the right solution to customers to help them succeed.
- What motivated you to switch from working in the life sciences arena to starting up a telecommunications company?
The biggest challenge I had at getting started was when people would call me and I was out in the field, and calls would go to our answering machine. I didn’t have a cell phone (this was a while ago). We sounded small. I frequently heard, “How big are you guys”? That was a difficult thing to overcome.
When the opportunity came around, we invested in an English company that built a recording studio based on the virtual office concept. They were looking to launch in the US and I started thinking it’d be nice to be able to give companies like ours the ability to not have the ‘are you a real company?’ perception.So that’s what we did.
We started our company to help other companies start, run, and grow and be able to have the same technology as Fortune 500 companies that the little guys couldn’t afford. With a virtual office, you get a phone number that goes right to a recording that lists extensions, which can be routed to your cellphone, home phone, etc. And suddenly you feel like a large company and you don’t get questioned anymore.
- Attracting funding can be one of the hardest tasks for entrepreneurs. How did you get funded or what creative strategies did you use to execute on minimal cash flow?
I don’t like debt. I don’t like owing money to people. Everybody has their balance of certainty versus uncertainty. For me, I wanted to make sure that I had enough money in the bank so that if I hired somebody, I could pay them through the end of the year. Since I didn’t want the uncertainty of taking on liabilities, it meant that debt financing wasn’t going to be an option. We had a very distinct culture and philosophy about running the company so taking on VC money wasn’t going to work because that would force us to focus on the money. And we weren’t about the money.
I didn’t pay myself. We started with $120,000. I spent $60,000 on equipment and then $60,000 to get the company to the point where it was making money. We shared a single office suite room with two other businesses. It started with just me for a while and then we added employees as we grew. At first though, I was the IT guy, the accountant, the customer care person, the sales person, and the business development person.
- How did you make your first sale?
We did a couple of different things. First, we started by doing a little bit of advertising in the newspaper to see what the temperature out there was for what we were selling. Then we started doing network marketing because we couldn’t afford a lot of advertising. Eventually, we began going to business expos and looking for people that were interested in our offerings. The network marketing organization we built was made up of a group of real people offering real services to others and it worked very well.
- What was your biggest mistake and how did you learn from it?
What you need to do when you’re trying out anything is to have what Tony Robbins calls your MAP (Massive Action Plan) for success. You chart ten ways of getting to your end goal. Some things are going to fail and some are going to succeed.
One of the more epic mistakes I made was getting us involved with a company that counseled mortgage brokers on how to be successful. We developed a voice system that was set up in a way that made sense to their industry. This company was going to be promoting our services and so I invested $200,000 in a campaign. As soon as I gave them the check, they shut down their business.
You learn a lot of things along the way. I had done due diligence and checked out this company beforehand. I had even gone to their office to make sure it was real. In retrospect, I would have structured it differently so that there were milestones with partial payments upon performance.
- What is the most valuable lesson you have learned from starting your own business?
It’s all about the team. Originally, we were hiring people that had an individual skill but didn’t necessarily fit the team. To have highly effective teams, you have to have everyone value and trust each other so that you can share honestly and work on things together without caring if you look stupid. You can fail in front of each other because you trust each other. The conversation is far more honest if you have a good team.
- Where did you go for help when you needed it?
When I first started, I didn’t ask for help. I just figured it out. About 5 years ago, I went to Vistage. They provided peer mentorship and education opportunities from experts in different areas of business. From Vistage, I got our hiring process, our alignment process, our team-building process….all sorts of things that were just critical for going from where we were to a company that is good at getting stuff out the door. We changed the leadership of the company almost completely.
- What kind of culture did you set out to create at FreedomVoice?
I think there are many different elements to the culture: friendly, truthful, customer first. We’ve created an environment where people care about our company, are passionate about what we’re doing, and tell the truth. It’s a lively group of people that is always trying to do the right thing.
- Can you provide an example of your “Customer First” culture in action?
Absolutely. For example, there was a company that was hoarding phone numbers and ended up pulling numbers that they didn’t have a right to pull.It was wrong and illegal. It left our customers in a situation where numbers that we had assigned to them (and they’d advertised) weren’t working and we couldn’t recover the numbers. I ended up offering reimbursement even though we weren’t responsible for the problem. But at the end of the day, we sold the number, and from our customer’s perspective it should have worked. For one customer, we paid $4,000 to cover damages, even though our service was priced at only $9/month! It was about doing the right thing.
- How has the nature of small business changed over the last 20 years? How does FreedomVoice plan to adapt to these changes?
One of the biggest things is that there are so many tools now to help small business grow. Just look at all the things that GoDaddy sells: domains, website building, email marketing…all the things that are on the critical path to getting your business off the ground. Having a voice is part of that. With GoDaddy, we will now have more resources to be able to plug into the one-stop-shop marketplace. Having one place where you can go and find all the things you need to start a business is really cool. It’s a continuation of our original mission to help small businesses succeed.
About Eric Thomas:
Eric Thomas started FreedomVoice in 1996 to offer small and mid-sized businesses feature-rich, yet affordable, virtual phone systems and 800 numbers. Prior to FreedomVoice, Thomas founded and ran B/T SciTech, a molecular biology distribution company for four years beginning in the early 1990s.
Thomas holds a Bachelor of Science Degree in Forest Sciences and Biology from the State University of New York at Syracuse and a Master of Science Degree in Biochemistry from the University of California at Santa Barbara.
You can find Eric on LinkedIn.