When Silicon Valley Staffing Group opened its doors in Sunnyvale in 1996, the three founders — who had first planned the company scribbling on a napkin in Palo Alto’s Blue Chalk Caf — found they had a lot of time to think over the risk they’d taken. Steve Allen, Eugene Lupario and Quentin Olwell had all quit well-paying, secure jobs to strike out on this venture.
“We had all had corporate jobs,” Lupario recalls, “so we showed up at the crack of dawn in starched white shirts and ties, came into this big, empty 1,500 square-foot office and just sat around with nothing to do. The phone didn’t ring.”
After cold calling and pounding the pavement, the trio finally attracted their first customer, whom they wanted desperately to impress. But they had no staff — not even a receptionist to sit in their cavernous lobby.
“It was all about smoke and mirrors at first,” Lupario says. “We had all our friends call us and fax us to make the office seem busy.”
Olwell convinced his sister to take the day off from her job to come and play receptionist.
“We got that first client,” Allen says, “and they’re still our client today.”
Since that day, things have changed dramatically. The company now has 36 employees, reached $9.9 million in revenue in 1999 and is on course to make $16 million this year. As suppliers of temporary staff for information technology, clerical and light industrial work in the labor-starved Bay Area, Silicon Valley Staffing has found it simply can’t grow fast enough to keep up with demand. And that has brought its own share of problems.
The company has maintained its Sunnyvale office (now 5,000 square feet instead of that original 1,500), but shifted its headquarters to Emeryville in May 2000. It has opened offices in Los Angeles and Sacramento, and an Atlanta office will open soon.
“Our biggest problem was that we didn’t know how fast we were going to grow,” says Allen, the firm’s chief operating officer and co-president with Lupario.
Despite the hectic pace at which they’ve expanded, the three say they’d grow faster if they could.
From the start, one brake on the company’s meteoric ascent has been money. “We pay our temps once a week, but only get paid by our customers every 30 to 40 days,” explains Olwell, the firm’s chief financial officer. “So cash becomes a constraint on expansion.”
At its inception, the company had no money at all. “We had to sink our savings into the company to start it,” explains Lupario. “When we went begging to the banks they said to come back the next year. We had to go to factoring agents for the first six or eight months, who bought our invoices for 80 cents on the dollar. Young companies have to do a lot of unconventional things.”
Olwell, who is Lupario’s cousin, was the only member of the trio who had worked in the staffing industry — he’d been in recruiting and sales at giant Aerotech. Allen and Lupario had worked together as salesmen for Gallo Distributors. They had toyed with the idea of striking out on their own, but were actually going in different directions when Lupario decided the moment had come and called them all together. Olwell had taken a job in New York, and Lupario was on his way to New Zealand with his wife. “I called Quentin the day I was leaving and said, `Do not go to New York! I will explain everything when I get back.’ The day I returned, I set up the meeting at the Blue Chalk Caf.”
That conceptual meeting was followed by lots of research. “We spent a lot of time in the Palo Alto library writing a long business plan,” Olwell says.
Though they have achieved some breathing space from their early days of money worries, the three founders maintain that startup war room mentality and seem to thrive on the pressure. “We still feel we’re strapped for cash,” Lupario says.
Paradoxically, though Silicon Valley Staffing profits from the dearth of talented workers in the Bay Area, it also suffers because of it.
“The No. 1 problem now,” Olwell says, “is getting good people here.”
This people shortage has led the company to grow in unforeseen ways. After a nationwide talent search, the firm found some promising candidates in Atlanta, and began negotiations. But the cost of living in the Bay Area was a formidable barrier. Undaunted, the three irrepressible founders refused to say uncle. If the mountain wouldn’t come to them, they would have to go to the mountain.
“We found these two superstars in Atlanta that we wanted,” Allen says, “But we couldn’t get them to come. So we decided to move out there.”
This flexible, creative approach to problem solving is what makes Silicon Valley Staffing so successful, Allen says. “We’re not the cheapest outfit out there, but we provide personalized service to our clients.”
Quint McClannan, president of San Jose-based DesignNet, a low-voltage cable contractor, has been impressed by the temps Silicon Valley Staffing has sent him. “They’ve been very easy to work with, they’ve been very responsive,” he says. “They’ve sent us some excellent technicians. A good number of our staff we’ve hired from them.”
Allen believes Silicon Valley’s magic touch comes from not letting the growth go to anyone’s head. “We still operate like a small company. That’s why we keep our customers.”