from my blog
Tearing Down is Easy
In 2001 I started a company called InnerWorkings (INWK). The business model was pretty simple, and yet completely untested. What if we could send thousands of print quotes to thousands of printers and use the prices they quoted us as proxy for real time open capacity in the print industry? If we could do that, we would be able to buy printing (books, catalogs, magazines, etc.) cheaper than most others, and we could arbitrage the savings and make money for ourselves while also delivering real value for our customers.
In our first year we did about $7 million in business. In our second, about $15 million. Then $30 million, then $75 million. By 2006, our 5th year in business, we were forecasting to do about $150 million and we took the company public. The IPO went off successfully at $9.00 per share. It was the city of Chicago’s first tech IPO in a while.
In the months that followed, our stock rose to $17 per share and Morgan Stanley led our secondary, which got done at $13.50 after some pressure on the stock from people shorting it before the offering.
In 2007 we did about $285 million in sales. In 2008 we did about $420 million. That year, we replaced our CEO, Steve Zuccarini, for a young executive who had never run a public company, Eric Belcher. The stock was at about $14 per share and just as it was about to find its footing, the world collapsed. Demand for printing dropped by about 20% overnight. InnerWorkings missed its earnings in the 4th quarter of 2008 and then proceeded to miss them again for six straight quarters. The stock got as low as $1.92 and for a while, the company was barely hanging on.
In 2011, that same young CEO Eric Belcher (young at least by CEO standards), and the all-star executive team he assembled, managed to increase the company’s revenues (almost entirely organically) to a run rate of $600 milli...
