1012 Corridor

Born in Lafayette and raised in New Orleans, Kenneth Purcell has taken iSeatz from an initial $28,000 investment and a leaky attic office in the French Quarter to a $30 million global provider of online travel and entertainment. iSeatz is the only Louisiana firm among the Inc. 500 fastest-growing companies.

During college, I interned [in 1996] with a biomedical start-up company here in New Orleans. The concept was to build a remote way for doctors and nurses to monitor patients’ vital signs and communicate back and forth, so they could be sent home earlier from hospitals and recover in the comfort of their own home.

I eventually started calling on potential investors and trying to help them raise capitol. It was a star-studded group of folks that were involved: MIT grads, Harvard and Yale med school grads, really bright minds, working on patents and such. The start-up environment was so exciting to me because the idea of bringing a product from conceptualization to actualization in the market was fascinating. At that moment, I realized it’s what I wanted to do.

I ended up taking a semester off. During that time, I was also working with my aunt at her magazine to help her with her project she had created, which was an interactive multimedia CD giving information to hotel concierges. The implied and long-term stated goal was to help them be more efficient at their jobs, and help them to book inventory at restaurants. She had no technology expertise, so she continued to keep as a CD Rom. This was the late- to mid-90s, and the Internet really hadn’t become a very applicable technology.

So I finished my work with the biomedical company and the magazine, and finished college. I came back to work for my aunt the summer I graduated. I was doing development for her in new media programming. I told her I had taken some classes in college and asked her if she would mind if I pursued an application for the program. I went to work for a technology company, and brought the idea for a joint venture with my aunt. The idea was to build this concierge reservations product.

I also had some real in-restaurant experience. During college, I waited tables and at one point, I had a broken wrist and was the host at a restaurant for a year, so I became very familiar with the reservation process and how that worked. Around this time, there was quite a bit of buzz in the world about the dot com boom. I convinced both the magazine and the software development company they needed to sell the joint venture, so we bought it. I secured some family money and bought the intellectual property for $28,000, which I think was a pretty awesome deal. That will get you a decent car these days. I formed iSeatz and opened its doors on Aug. 1, 1999.

By the month of October [1999], we’d already raised our first round of venture capital, through angel investment money. We’d raised about $200,000, which to me was all the money in the world, but not as much as I thought it was. I was working out of my uncle’s law firm’s attic in the French Quarter. The attic actually had a leak in the roof where our servers were, so when it rained, we had to move them around. I started with one person doing it for sweat equity with me; by the end of December [1999], I had three to five people. I decided in January [2000] to expand beyond New Orleans, so we moved into New York.

That first year, we had no revenue whatsoever. In 2001, we made $34,000; in 2002, we made $100,000. I remember when we broke $200,000, I thought, “Wow.” I tell you, it’s a hell of a lot harder to make your first million than is to get more. It’s a different challenge. I thought, “Well, we made it to $1 million; we should be able to make it to $10 million. It’s only 10 times as hard.” In 2004, our revenue was about $1.1 million. In 2007, it was $8.1 million. This year, we will do probably $30 million. To get from $8 million to $60 million, which is probably where we’ll be next year, took as long as it did to get from $1 million to $8 million. But we’ve had triple-digit growth for the last few years.

We’ve added some new products. In 2004 and 2005, we only focused on things to do when you get to a city - restaurants, tours and theatre tickets. And then 2006, we added the capability to begin to sell hotel reservations and book rental cars, and that additional product line has really increased our ability to generate revenue, and hence the explosive trajectory - or speed vertical climb - we’ve had.

The rent was definitely right in the attic, but it doesn’t meet our partner requirements for disaster planning. It was a great place. I’d probably go back, but instead of the attic, I’d probably need whole building now. We’re still a small company in terms of employees. We’ve got about 28 full-time people and 40 full-time contractors.

What works is that I have a commitment to trying a variety of relevant things, and being OK with evolution. One of the primary things I see people doing besides being totally scatterbrained and nonsensical about evolution, is getting involved in too many things. They’re just throwing spaghetti against the wall to see what sticks, and spread themselves too thin, so that many times they sacrifice the very thing they started. It’s the innovator’s dilemma; certainly the entrepreneur’s dilemma. One thing I did was to decide that I’m not going to be an advisor or assist anyone in business. I’m going to focus on this and give it every ounce of attention I have. For a lot of people, it’s so easy to take their eyes off ball and go for another prize. And it’s easy to sit down and rest when you see how hard it is to start a company.

The most significant moment I had recently was pulling into a gas station and seeing gas at under $2. In all seriousness, some of our clients are airlines, so this is definitely good for them. It helps, but it’s not the silver bullet. I would say our most significant moment really was landing our first major marquee client, Mastercard. We were on dire straits in terms of funding, this was like in 2003 and we were almost out of cash. Landing Mastercard saved us, and I took that money and reinvested it into the other side of our business, the travel side. Then we landed a considerable consulting project with Orbitz. Those two things happened within a matter of months.

The days after Katrina certainly were ridiculously challenging, as it was for everyone. That was very difficult. But over the years, I’ve also had to purge my senior management team because it takes a very different sort of person to build a business than it does to run a business. If you’re a $40 million or $50 million business, or if in 2010 we’re at $100 million, it’s a very different set of rules. So I recently had to purge my management team and bring in people with been-there-done-that experience. That’s difficult. It’s one of most difficult things I’ve had to do. At that moment, I have to decide, “Do I want to keep this a small business, or do I want to try to make this a mid-sized company with real business issues?”

I came back to New Orleans after Hurricane Katrina because it’s home. And also I feel like I’ve been really blessed over last few years. I felt like New Orleans could use some good news. I could run the business from anywhere, but I feel in my heart, that even though I’m not picking up abandoned houses, I wanted to do my part and be a good corporate citizen, and hopefully I am. And frankly we’re also somewhat benefiting by the fact that we’re here. We’re getting a lot of national attention because we are achieving some pretty significant milestones and we’re based here.

Right now, we’re going through the business of globalizing our company. I got an e-mail forwarded to me from my COO that his employees sent. He’s the project manager on one of our projects launching involving an international airline. My COO was in Budapest, and I was in L.A. speaking at conference. The e-mail said, “At 7 a.m., I had a call from India; at 8 a.m., I got a call from Holland; and I had a 9 a.m. call with Chile. I’ve been to three continents - all before 10 a.m.” It’s really cool to see us globalizing.

It sounds so completely outrageous, but I’d like to see the business get to about $250 million in sales, and then I think from there a new world will open up to us. And it’s in our five-year plan to do that. If we can do that - achieve a quarter of a billion dollars in sales - we’ve really arrived on an international level. We’re a pretty substantial business at that point.

I look around and always feel like could be doing better and should be doing better and I push myself harder. It’s not just about growing for growth’s sake, but for sound business principles. Logical evolution and sound business principles allow you to take your business to a different place. As a manager, you have to be willing to average up to next tier of the playing field. You can do that, or take a place on the board and let someone else run the company. I happen to like this job.