It’s a typical Tuesday at corporate headquarters, and the CEO isn’t wearing a tie. He isn’t wearing socks either.
Welcome to the world of Jim Geiger.
Ten years ago, bored by an early retirement, the 50-year-old entrepreneur came up with an idea for a company that would bundle together essential information technology services to meet small businesses’ mushrooming needs.
Today, that idea is the successful telecom-services firm Cbeyond, headquartered just across the Chattahoochee River from Atlanta in Cobb County. Started with 15 people in 1999, it now has 1,700 employees in 13 markets across the country.
In May, Cbeyond did something remarkable. In the midst of a recession in a state with a jobless rate above 10 percent, it announced it would be hiring people — about 600 new employees in Georgia over the next few years.
How has Geiger managed to buck the economic tide? He’ll tell you the formula is simple: Find a niche market and be smart about filling it.
“We have an essential product for small business,” said Geiger, who presides from a cubicle, not a corner office, at Cbeyond. “You have to have what we provide to exist in markets today.”
What it provides is flexible packages of telecom services, including Internet-based local and long-distance phone service, e-mail, voice mail, secure data storage and backup and Web hosting. The typical Cbeyond customer has between five and 35 employees and spends about $750 a month for its services.
But there’s more to Geiger’s success story than that.
A born entrepreneur
Growing up in upstate New York, Geiger developed his entrepreneurial ways early. When he was a teenager, he worked two paper routes, delivering both the morning and afternoon newspapers in Syracuse. These days he reads books and his favorite Braves blog on his Kindle reader, but still prefers a newspaper for his daily news.
Geiger’s mom was a bank teller. His dad was a regional beer salesman who was good at his job, but constantly grumbled about the confinement of work. Geiger said his dad’s job dissatisfaction probably fueled some of his need to be independent.
His early business inspiration, he said, was Frank Mento, a street-smart produce merchant who lived two doors down. Last year, Geiger said, he canceled a White House invitation to greet the Pope so that he could speak at Mento’s funeral.
“He had one truck to begin with, and you saw this guy working his butt off,” Geiger remembered. “Then you see two trucks in the driveway, then three, then a pool in the backyard, and then a Cadillac. I thought he was cool. He was like Frank Sinatra to me.”
Mento’s widow, 75-year-old Joanne Mento, said Geiger was like a family member. He once even tried to borrow money from her husband for a car.
“My husband said, ‘Son, I promised the bank I wouldn’t lend money if they wouldn’t sell produce,’ ” Joanne Mento recalled.
A $60,000 lesson
Mento often paid his sons and Geiger to help out. They made a few bucks, and got to shoot pesky rats near warehouses and boxcars with .22-caliber rifles. That boyhood sport fueled one of Geiger’s earliest entrepreneurial forays.
A teenaged Geiger made a deal with Mento to unload his boxcars of vegetables for $75 per car. Then he immediately enlisted some buddies, telling them he would let them shoot the rats. But they first had to unload a few boxcars — for free.
Geiger admits he hasn’t always been so shrewd with cash. For $60,000, he hired a San Francisco-based consultant to devise a name for his current company. The consultant came back with two suggestions — CommRider and Packetron — that Geiger and his associates immediately hated.
“We were all just crestfallen that I’d blown 60 grand on this,” Geiger laughed. “One of my employees leaned over and said: ‘I’ve always liked the name Cbeyond.’ I said: ‘That’s great. Where were you 60 grand back?’ ”
The young company took off and quickly cut its own path with its first offices in Atlanta, Dallas and Denver.
Not only is casual dress typical around the office — business attire is required when dealing face-to-face with clients — Cbeyond has emerged as a study in frugality.
“We fly commercial; we never lease planes,” Geiger said. “We don’t have cars or country club memberships. We don’t do perks. We have Braves tickets. It’s the only thing we allow ourselves.”
Too young to retire
By the time he started Cbeyond, Geiger had already worked for Price Waterhouse and founded FiberNet, a telecom network provider, which was sold to Intermedia in 1996. He went on to take charge of Digex, Intermedia’s Web-hosting organization.
He was only 40, but could afford to retire. Geiger and his wife own homes in Sandy Springs and Park City, Utah, as well as a summer home on an island along the St. Lawrence Seaway. But idle time did not agree with him.
“I sat around for about a month and found out I was way too young and way too energetic,” he said.
Geiger figured out early on that the big telephone and cable companies would likely meet the Internet technology needs of very large businesses. But smaller businesses — those with five to 249 employees — could provide a lucrative niche market, he reckoned.
“Think a 12-person law firm in the suburbs rather than the 120-person law firm downtown,” said Geiger. “We think of ourselves as an outsourced IT [information technology] shop for small business.”
Dan Kirk, who heads up information technology for Alpharetta-based Tappan Restaurant Group (the Taco Mac chain), said Cbeyond served up exactly what his 25-employee company headquarters needed “at exactly the right price.” Kirk said he also was impressed that Cbeyond was able to answer technical questions that stumped other providers.
Despite its planned employee growth, Cbeyond, too, has been affected by the current downturn. Its annual growth rate of about 30 percent has been trimmed to 20 percent, Geiger said. Its stock (NASDAQ: Cbey) has fallen from highs in the $40 range down to about $15 to $16 a share at present, though that’s double its lows of late last year.
“About one-half of 1 percent of our customers per month used to go bankrupt or go out of business,” Geiger said. “That has doubled in the last 18 months.”
That means the company, which has 44,000 customers, has to add more at a 12 percent annual clip just to stay even.
Vision and simple goals
Geiger said he has tried to create a corporate culture at Cbeyond based on the things that inspired him to work his hardest during his life. He has twice-monthly lunches with a dozen randomly selected employees where he listens to their concerns.
“He has a vision and he’s very passionate about it,” said Judy Gundle, who has worked for Geiger since 2000. “A lot of people talk about doing the right thing, but Jim gives you the tools to do it.”
He also encourages community involvement. A devout Catholic and father of two grown children, Geiger sits on the board of the Marist School, where his children were students, and the Hands On Network.
Father Joel Konzen, Marist’s principal, said the Catholic Church and education seem to occupy a special place in Geiger’s world view. But he recruited him for the board for more than that.
“He represents instant change and adaptability,” said Konzen. “We change glacially around here. We needed him lobbing things from the sidelines.”
At Cbeyond, Geiger said, his immediate plans are simple: Keep growing. Stay domestic. Stay independent.
“We’re simply not on the market,” he said. “We enjoy our independence. Our business works.”
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