Starting a Company Instead of Taking a Job

Founder of Collar Free Discusses Switch from Employee to Entrepreneur

Jimmy Hendricks is the co-founder of Collar Free in San Diego, California. He worked as a sales manager for a while and then decided it was time to go out on his own. He was kind enough to share his entrepreneurial experience with us.

Jimmy Hendricks had wanted to be an entrepreneur for a long time.

He paid his dues working for somebody else, but now he's made the jump to owning a business.

We talked with him about his company and how the transition has been.

Jimmy, what type of firm were you working at before you started your company?

I was a Sales Manager for the Active Network. Active is the market leader in online registration, marketing, and software solutions in events and activities markets. I was there 15 months and left July 2008.

I actually started a business a few months earlier with a partner while still employed and we got to a point that my business partner couldn't handle the workload.

So I turned in my notice and left.

So, tell us about your company. What are you doing exactly?

Collar Free is a design competition company running Collar Free and Artistic Hub.

Collar Free started as an online design community and clothing brand. Artists all over the world submit trendy t-shirt designs onto Collarfree.com. The public then votes on the designs they like best and each week we print a new design. The design is then available for sale online and in retail stores in San Diego.

Our platform has proved to be addictive and because of our success, companies approached us to host design competitions for them. We are now using our expertise to host design competitions for large brands and we are rolling out our B2B brand, Artistic Hub, in January 2009.

Artistic Hub will be the first design competition platform with fully integrated on-demand printing capabilities embeddable within a company's website. Using this platform we manage design competitions for companies to engage with their fans and host innovative advertising campaigns with immediate and measurable ROI.

Sounds like a fun business! Why did you decide to become an entrepreneur instead of simply looking for another job?

I always wanted to be an entrepreneur from the time I entered college. I got a master's in accounting so I could manage the finances in business, I ran a sales company in college, and helped a friend start a publishing business before I went to work for Active.

The hard thing for me was always finding what business I wanted to run. So when I started looking at the internet and what was going on I thought it was a fit and chose to work at the Active Network for this reason.

We started Collar Free about nine months after I worked at Active Network once we came up the concept. So it was more of a strategic move to work full time as long as I could while supporting the business in early stages.

Did you buy a business or start a business from scratch? Why did you do one instead of the other? Which do you think is the best approach?

We started from scratch, which I can tell you is one of the hardest things you can do. There is so much to learn: legal, accounting, payroll, contracts, technology, etc.

But, I wouldn't say there is a right or wrong answer. The key is "what are you going to be passionate about?" Running a business is hard the first 1-2 years until you get your groove, so you must love what you are doing to get through it.

How did you decide what kind of business to go into?

My business partner Patrick Dillon and I spent a whole year brainstorming ideas and I think I spent a summer in the library reading about companies.

He lived in Milwaukee so for him to move out here we had to find the right idea we both would be committed to. So we read about a company called Threadless out of Chicago that was crowd-sourcing clothing and thought it would be cool if we could do that for fashionable t-shirts.

We also wanted to differentiate ourselves by going directly into retail and not just online. Our first name was Creative Cotton, but we changed to Collar Free.

Once we agreed this was a good concept we started planning and everything has worked out since. The first sign of destiny was when I flew to my first technology conference at Stanford. On my way back, Pat called and said his roommate was promoted to a director position at his company in San Diego and they were moving both of them for free. Then I landed a job at Active that wasn't even posted, and that is how it has been since.

Owning a business is very different from working as an employee. What are some of the biggest differences you've noticed? What do you miss? What don't you miss?

The differences are astronomical. I would say the biggest difference is you go from having departments with experts to one or two people doing everything.

I heard a story from another entrepreneur the other day. His friends joked that when someone called the phone said: "Press 1 for marketing, press 1 for sales, press 1 for accounting, press 1 for HR....." So true.

What I don't miss is the lack of speed within a large organization, but that comes with a $100M+ organization implementing procedures to be sustainable. What I do miss is all the friends you have when you work in a building with 300 people. Active was a company built with athletes, so we had lunch workouts, a tennis court, pool, and gym at work. It made working at a large company a blast.

What advice would you give to somebody who is leaving the life of working for a company to go out on their own?

I would recommend the book "Ready, Fire, Aim" though. I just read this and wished I had a year ago. It talks about how to start quickly and the right way. It is easy to get caught up in the glamour and waste time running a new business.

I believe this is the biggest downfall of new entrepreneurs. They spend time doing busy work instead of attracting customers. If you can sell you can survive.

Anything else you'd care to share with us regarding the transition from being laid off to starting a business?

First, understand that if you are an entrepreneur it is ok to fail, but also understand failing is different than quitting. Almost every entrepreneur has failed and looks at it like a badge of courage. There is so much out of your control that you can't internalize your success.

Second, you will never regret leaving some corporate job and trying to be an entrepreneur even if it doesn't work out, but when you are old and life seems easy you will regret not trying.

Awesome, Jimmy. Thanks for sharing all your great advice. Good luck to you in the new venture!

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