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 million. In addition, they launched an entirely new inside sales channel, which has the potential to grow like a weed and catapult the company to even greater heights. This stellar performance was not lost of the investment community. In a tumultuous year for most stocks, INWK was up over 40%. (We’re also proud of another of our public companies, ECHO, whose stock is also up nearly the same amount on similar world-class performance)
So, if I told you the story above, and also told you that InnerWorkings, which is clearly a local success story and an example of why people should never give up hope, has largely been out of the media’s eye over the past few years, you (like me) would probably imagine that any story about them would be touting Eric Belcher’s tremendous turn-around.
But no…
The only local recent story about the company was titled “Groupon sib has skeptics aplenty”, and the entire article was about how many people are shorting its stock and why its stock might go down, despite the fact that it just went up.
Now I’m not saying its wrong to be skeptical. And I’m a huge fan of looking at every business glass as half empty, instead of half full; it keeps you focused. But at some point if Chicago is going to produce world-class innovative companies, the kind like InnerWorkings that are adding jobs these days instead of shedding them, we need to all give them some minimal amount of support and latitude.
We need to honor the accomplishments of this team that could have thrown in the towel when the market collapsed, and instead produced record revenues, record earnings, and record growth. We need to celebrate companies like InnerWorkings that disrupt antiquated marketplaces and usher in new eras of innovation and discovery. We need to stand behind any business that is adding jobs, especially those like InnerWorkings and Echo that are adding hundreds of them a year, and providing invaluable training for kids coming out of school.
We as Chicagoans need to celebrate growth, honor innovation, and have respect for anyone that is bold enough to take a risk. And the local media that is so vital to our business ecosystem needs to realize that they play a role in the evolution of our economy. Within the confines of always reporting the truth, they can help make Chicago’s business community stronger, instead of catering to those that want to see it fail.
Tearing something down is easy; building it up is hard. Maybe it’s time to stop taking the easy way out.
-Eric Lefkofsky
