Millionaires Who Started With Nothing, Part I
Believe it or not, IP intelligence technology provider Digital Envoy Inc. was spawned from two serious sweet-tooths. Sanjay Parekh, 31, started buying candy from Costco and reselling it to his telecom co-workers when he struck up a friendship with Rob Friedman, 38, general counsel at the company and an Atomic Fireball enthusiast. Soon, their friendship moved beyond candy cravings, and they were bouncing around business ideas.
Parekh made an interesting discovery when visiting the FedEx and Ikea websites in 1999: both prompted him to enter what country he was in. "I thought that was kind of stupid," he recalls, and the extra step slowed down his home dial-up session. "So I architected a solution to that problem using IP addresses." Friedman agreed that the technology--which provides general information about an online user, such as the city, local demographics and type of internet connection being used, based only on the IP address--would help businesses. They launched Digital Envoy Inc. in 1999, bringing along senior finance manager and co-worker Dennis Maicon, 40.
Filing fees for corporate documents cost $100, and Friedman drew up all the legal drafts. An article on the Red Herring website about their business led to their very first client, Advertising.com (now owned by AOL). Since they worked from their homes, Friedman quips, "I negotiated that deal in my bedroom." They also hired an intern and Friedman's cousin to do programming work in the beginning.
After moving into an office in 2000, they hired three more employees. Friedman found $10 chairs, and opted for modular desk setups rather than expensive cubicles. In their newest office, they have cubicles, bought inexpensively from the office's previous tenant. When it comes to traveling to trade shows and to see customers, they've also found ways to save their Norcross, Georgia, company money, using slightly out-of-the-way but much cheaper flight options.
Digital Envoy now works with many major ad networks and sites, and estimates last year sales at less than $10 million. The company's latest product, IP Inspector Fraud Analyst, allows companies to fight identity fraud by verifying user identity in real time. They are also combating fraud with a product that analyzes whether an e-mail is really a phishing attack. Digital Envoy continues to grow, but in many ways remains the same. Says Parekh, "One of the philosophies we've always had is to do more with less people."
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