Need a status update on the latest player in marketing? Lincoln-based Hurrdat Social Media ready for a breakout
Four years ago, Blake Lawrence was an outside linebacker for the Nebraska Cornhuskers; his teammate, Adi Kunalic, served as the football team's kickoff specialist.
Today, the company they started in August 2010 is an up-and-comer in the hot social media market. Lincoln-based Hurrdat Social Media (the name comes from a streetwise pronunciation of "heard that") has worked with 45 mostly small businesses in 35 different industries throughout Nebraska and beyond. Some of their clients hail from Kansas City, New York City, and even Australia and the United Kingdom, riding the crest of a global wave in cutting edge marketing.
"Here's the value of social media," Lawrence said. "I can talk to you here right now, but once I’m out of here, our communication stops. But if you’re part of social media, you’re still part of the conversation. We're teaching companies they have to use both to get their message across. The big thing is, we tweet, we blog, we post on Facebook for our companies every single day."
What started with an internship led to starting own firm
A Kansas City native, Lawrence came to Nebraska on a full scholarship, and started seven games in 2008 and 2009 for the Blackshirts before being sidelined as a junior from the effects of suffering concussions. Still, he left school not only with an undergraduate degree but an MBA, and after graduation took an internship with a Lincoln-based document management solutions firm. His task: create an online community around the firm's brand. The company's managers knew the firm needed to be part of the fast-moving conversations out there.
"Social media creates an opportunity for these brands to no longer be a sign on the wall or a sales caller," he said. "It's a chance to create a one-on-one relationship with their target market to help grow the brand, and ultimately have more loyal customers."
In six months, Lawrence's model for social media marketing created $600,000 of new leads and $200,000 of new revenue for the company. After he returned to Nebraska after an internship in New York City working with some of the top marketing firms there, he sat down with his business partner, Kunalic, who had an idea to break out on their own.
During his internship in NYC, Lawrence hungrily devoured everything he could on creative marketing, strategy development, and analysis, and learned something crucial when it came to selling their services to small businesses.
"If their clients loved their campaigns, loved the way it looked and felt, but if it didn’t deliver quality results they weren’t going to invest," Lawrence said. What he brought back to Hurrdat from his Big Apple experience was a method to determine the return on a company's investment, an important metric to convince otherwise conservative businesses to take the plunge into social media marketing.
Hurrdat's first client? The same Lincoln document management solutions firm which employed Lawrence as an intern. But the CEO did more than just sign Hurrdat up to do its social media work; he provided them office space in Lincoln with internet access, a phone line and tech support for as long as the start-up needed it.
Lawrence and Kunalic sought as many ways to keep costs low for his business as he could, bartering social media marketing to an event venue in Kansas City in exchange for free office space there, and similar efforts to a KC law firm for help with contracts and setting up the start-up's incorporation documents.
The firm has seen some impressive growth, hiring their first employee in January 2011 to handle technology development duties, graduated a couple of interns to full-time status four months later, and by May 2011, wrote the company's first payroll check. Three more hires by late summer brought the team to nine.
'This is what social media looks like'
Lawrence also is the perfect picture of a Millennial generation entrepreneur--sport jacket, button down shirt worn outside his jeans, even down to his tennis shoes. That's his uniform when meeting with businesses people, bankers and clients.
"This is what social media looks like," he said. "This is where we're coming from. Our oldest employee is 25 years old. Our work for our customers is the most serious thing we do."
And they've already become a name in town; Lawrence was on Lincoln's KFOR-AM business program "Pursuit of Success" recently to explain how his company has enjoyed quick success with facilitating two-way dialogue between customers and a company's brand image
"They asked 'how do you define success?' Everyone is going to point to dollar figures, raising a lot of money, revenue," Lawrence said. "I define success as a happy company culture, where when people come to work they enjoy it. The biggest thing is providing environment that they enjoy what they do."
SBA helps bail Hurrdat out of a bind
But not all was smooth for Hurrdat Social Media; for a while this fall, the nascent firm struggled to find an answer to a vexing cash flow problem. The lag in accounts receivable and need to bring full-time employees on the payroll put the company in a bind. They turned to US Bank, and the lender turned to the SBA to get Hurrdat into a loan to help.
"We had no credit history, and there were some things we needed to do," Lawrence said, "so we went to our bank, said, 'here’s our books, here’s how much we’re making, here’s how much we’re waiting to collect.' And they saw it as an opportunity to help a small business."
The firm was approved Dec. 1 for an SBA Express financed line of credit.
"If we had not gotten an SBA loan? We would have been freaking out," said Lawrence, who added they're also looking to raise some investor capital this year. " You know, we're still dependent on our customers, but as a young business to be seen by the SBA as credible, and to know if we ever got to a point where cash flow wasn’t there, we have this for us, it's comforting."
Social media bringing endorsements directly to fans
Pursuing new markets may also prove to be crucial to Hurrdat Social Media's growth. They've spun off a subsidiary that offers about 120 pro athletes an opportunity to engage with their thousands of fans all over the internet -- and make some coin in the process.
"We work within social media to connect brands with these athletes to create social media endorsements," said Lawrence, adding his company can knock the cost of a commercial placement way down for a business client. "We realize these athletes have influence on their social media pages, possibly influencing thousands of customers so we have a platform where your business can pay athletes for an endorsement. You can go to our site and tell us that you want this product, this athlete, what you want them to say, and the endorsement happens on that athlete's Twitter, Facebook, whatever, right away." It takes less than a week, sometimes as little as 24 hours to approve a message; Hurrdat is careful not to clutter an athlete's social media brand, limiting endorsement posts to three a week.
"People will pay for that contact," Lawrence added. "Fans are the most engaged with athletes." In fact, they deliver for their advertising clients a click-through rate from a social media post about 10 times than other online marketing efforts.
And Lawrence knows this generation can sniff out a cynical post by their favorite athlete designed to sell something, so his firm spends hours studying a particular athlete's "voice" on social media to make sure the endorsement seems like the natural flow of the conversation.
Hurrdat also has teamed with Husker Sports Marketing as their social media partner, offering another important outlet beyond their ability to market brands to the university's sports fans through radio, TV, in-game signage and program guides. Hurrdat provides the social media platform and the athletes, and Husker Sports Marketing sells that access to their corporate customers. The arrangement has worked so well that the goal for Hurrdat this year is to reach out to all 72 similar entities partnered with university sports across the country; Husker Sports Marketing manages millions of dollars in contracts, and with the social media firm involved in about 10 percent of that, "you can see where we can have a high growth potential in the next year."
But Hurrdat faces a turning point this year in the loss of its co-founder Kunalic to another organization: the Carolina Panthers of the NFL.
"We were sitting down talking about our business plans for the new year," Lawrence said, and a week later, Kunalic signed a three-year contract as the NFL team's kicker.
Not too many small businesses have to compete with the NFL for its talented employees.
Regardless of the challenges, Lawrence and his Hurrdat Social Media team seem poised to leverage a growing demand for that two-way dialogue between a business and its customers.
"On the internet, everyone becomes their own brand, with an ability to create their own identity, and everyone’s an expert when it comes to their own online brand," Lawrence said. "There’s a demand and we believe we do it right. We’re good at one thing, social media, and focus on that and we’re going to become very good at it."
Along the sparkling restored streetscape in downtown Norfolk is a gem of a store set within the shabby chic bricks and mortar of the old Pasewalk Building. Bright pastels for the up-to-date interior design and shiny floors make it hard to believe for a visitor this outlet offering the hottest brands in children's apparel actually is a second-hand clothing store.
"That's what we tried to accomplish," said Kookaburras Kloset co-owner Glenda Aschoff during an interview on WJAG radio's "Morning Coffee" shortly after the store opened for business Dec. 5. Aschoff, along with her daughter and co-owner Julie Weidner, and granddaughter Katie, run the store.
"My daughter actually came up with the idea after talking to a number of Norfolk residents and finding a need for a children's clothing store in the Norfolk area," Aschoff said.
Then there's the shop's name, taken from the old nursery rhyme of the Kookaburra sitting under the old gum tree, eating all the gum drops he can see. Drivers on Norfolk Avenue can't miss the gaily decorated sign outside.
"We wanted something catchy," Aschoff said, "and thought it would be something people would remember."
The store buys new to nearly-new kids' clothing, toys, shoes and many other items; they're not a consignment shop, so sellers can bring their goods to the store on Mondays, Wednesdays and Fridays, and by appointment on Saturdays, and get paid immediately. The stuff goes right on the shelves and hangars, so Aschoff said, "our shop changes probably hourly, as fast as we get things in, recondition what needs it, and putting it out."
That encourages foot traffic just to check out the latest offerings. Kookaburras Kloset is a little selective, though.
"The merchandise they’re trying to buy is typically stuff you can’t get in Norfolk, Nebraska," said David Brunsing, vice-president at Frontier Bank in nearby Madison. "They've got clothes there from popular kids stores, like Gap, Old Navy ... some of the stuff they like to buy you can’t get in this part of the state."
Putting the deal together
Aschoff's daughter, Julie, came to Brunsing last spring with the idea of a store that would re-purpose clothing--and an idea for a location in a re-purposed building downtown. The lender suggested she visit Loren Kucera at the Nebraska Business Development Center in Wayne for help with financial projections and a business plan.
"Like any retail business in a small town, the question is whether there's a market for this," Brunsing said of the town of around 24,000. "Would it be a viable business in a town this size? I guess the one thing they had going for them was there was no business in town like this."
But for the business to be more than a dream, Brunsing needed to call in some help to provide the funds to purchase inventory, make leaseholder improvements to the shop and have some working capital. He called on Holly Quinn from the Northeast Nebraska Economic Development District and Juan Sandoval with the Rural Enterprise Assistance Project, who joined Loren at a conference room table, and "asked what can we do to make this work."
In addition to loans from NNEDD and REAP, and a small down payment by Weidner, the lender used the SBA's Rural Lender Advantage to cover the balance of the project.
“Without the SBA, this deal would have been more difficult,” Brunsing said. “The SBA guarantee made it very easy to move forward with the financing.”
The application was approved August 17, one of eight SBA loan approvals to small businesses in Norfolk, and one of 15 SBA loans made in the state by Frontier Bank in Fiscal 2011.
"At the beginning I was pretty skeptical, you know, retail stores come and go. But I credit the persistence of Julie," Brunsing said. "She never gave up, and we just kept looking for ways to make it work. I think we were all surprised that the projections were better than we thought for a kids' clothing store. I’m glad we all stuck with it, I believe it is a unique store in Norfolk and I think it can make it."
Brunsing also credited the work from NNEDD and REAP. "We're fortunate that they're here, that they want to see start up businesses come to town."
And the lender can add one more person happy to see the store open.
"My daughter is tickled pink," Brunsing said. "She's nine, and she thinks this is great that she can find those name-brand jeans she wants."
A chance meeting one day with a new lender in their Kearney strip mall led to better cash flow for their small business and the resources to hire a new technician to continue to provide much-needed orthotic and prosthetic services to their neighbors.
One day last year, Jeff Kreycik of the State Bank of Riverdale dropped by to introduce himself to Darren Wiens and Jake Sikes, and visit their business, Ortho Medics. The lender just opened a branch in the nearby strip mall, and was scouting for new business. As it happens, Wiens and Sikes had been tossing around some financing ideas -- to start Ortho Medics in 2007, they both had to mortgage their homes and were eager to get out from under that.
How the business came to be, Wiens said during a recent interview on Kearney's KGFW-AM , "is actually kind of a funny story.
"I remember starting the business with Jake and telling my wife, we’re going to use the house as collateral," Wiens explained, "and she gave me that look like, 'oh, good God, what am I getting into.' We were real confident, though, we had a good business plan and everything, and we thought it would work well, as long as we worked hard. Fast forward a few years, we had a couple of different loans for the business, and we wanted to bring everything together."
That's where the visit by Kreycik came in.
"So I said, you know, if you had the ability to give us a loan that would take our house off as collateral and combine everything into one loan, give us a lower interest rate so we’re paying less a month, we’ll do it," Wiens said during. "And it was kind of a shot in the dark, we really didn’t think it would actually happen."
Kreycik was determined to get the business the financing it needed, and after getting some guidance from the lender relations specialists at the Nebraska District Office, got an approval Oct. 18, 2010, for an SBA-backed loan under the Rural Advantage Program.
In this case, the small business’ assets were enough to fully collateralize the loan.
"When we started the business we really focused on the patient part of it, working with the doctors, the hospitals," Wiens said. "So with us, we did really well on the patient side then learned on the back end how the business side worked. And that's where we learned a lot about that, going through the loan process."
Wiens also explained from his point of view the SBA loan process wasn't much different than the work going through a regular commercial loan.
"I think a lot of people have this image that you’re going to be sitting down with a banker and you’re gonna be filling out tons of paperwork, with all your tax returns, your accounts receivable," he said. "Well, if you sit down with a bank, they’re going to want all the paperwork anyway.
"If you want to get your house off as collateral, if you want to use just your business assets as collateral, why not take the extra couple of weeks, because you’re going to fill out the paperwork out anyway for the bank," he added. "So do a little extra for the SBA, get yourself free and clear, and that will allow you to do so much more through the business."
The $150,000 loan was approved by the SBA using the provisions of the Jobs Act; the banker got a 90 percent guarantee, and the borrower fees were waived for Ortho Medics. More than getting his house out from under the collateral requirements, the business also improved its monthly cash flow.
"That was a huge win for us," Wiens said. "It allowed us to bring on another person as a technician, and we ended up buying out another company in town," and which ultimately meant they could handle more patient needs.
And that's where the story of this business really begins.
Wiens first got the idea for his business more than 10 years ago after competing in a decathalon against a top-ranked paralympic athlete training for the 2000 Olympic Games in Australia. Not only was Wiens amazed at his competitor's ability to compete, but beat most of the able-bodied athletes. Determined to do something different with his life, Wiens saw a career doing just that by providing prosthetics and orthotics to get people back and active again.
Visit their web site and you'll learn Ortho Medics takes "great pride in finding innovative, creative solutions to provide our patients and community with the highest quality care available." They mean it, from prefab orthopedic and prosthetic limb braces and supports for spinal trauma patients, to unique casting and custom fabrication the competition doesn't offer. They'll visit their patient to take measurements and get to work; Wiens admits sometimes being up past all hours in the lab just to make sure a patient can get a device the next morning and take that first step toward a new life. And they're always seeking out emerging technology to help even more.
Wiens said its important his business takes the time to listen to their patients, to learn their expectations for their activity level and lifestyle, so they can design something that fits. "If you really listen to what motivates a person, it's easier to explain to them what we're trying to accomplish together."
He's also helped two of his colleagues start their own Ortho Medics facilities in Norfolk and Omaha, "because they share the same patient care philosophy."
That alone sets Ortho Medics apart. But then there's the story of how they spent thousands of dollars of their own money and traveled more than 2,200 miles just to help cast and fit prosthetic arms and legs for desperately poor amputees victimized by civil war in Nicaragua. Sikes and his uncle started a charity three years ago, Step Global, to enlist the help of like-minded volunteers like Wiens to rework secondhand prosthetics that can't be re-used in this country for dozens of grateful souls in the Central American nation.
"You see these people that haven't taken a step with their leg in five years," said Wiens in an interview with the Kearney Hub. "Then, they get up and take a step."