Once struggling, entrepreneur prevails on third try

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INSPIRING PERSPECTIVES

Each Sunday, the AJC brings you insights from metro Atlanta’s leaders and entrepreneurs.

Business editor Matt Kempner’s “Secrets of Success” shares the vision and realities of entrepreneurs who started their dreams from scratch. The column alternates with business editor Henry Unger’s “5 Questions for the Boss, ” which reveals the lessons learned by CEOs of the area’s major companies and organizations.

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Will Hakes was adrift after graduating high school: jobless, no drive for college, living in the closet of a friend’s apartment. Now he leads a business that crunches billions of records a day for some of the nation’s biggest companies, including Intel and T-Mobile.

Link Analytics uses sophisticated math to produce insights that help clients understand customers, competitors and equipment needs. The venture Hakes and colleague Sean Groer started three and a half years ago — his third attempt at starting a company — now has 45 employees and pulled in more than $6 million in revenue last year, Hakes said. He predicts the business, based near Perimeter Mall, will hit $14 million to $18 million in sales next year.

Here’s how Hakes, 42, said he got where he is.

I was very fortunate to grow up in east Cobb. Everyone aspired to something. (My parents) worked in big companies. We lived in an upper middle class area and we were just squeaking in to the lower end of that. I watched them struggle financially, and I think that led to a lot of health issues for my mom and an early death at age 58. Part of the lesson I learned from all that is with enough hard work and education I think I can achieve a level of financial security guaranteeing that I and my kids are not going to have those same struggles.

My dad was a Marine. He was a very tough guy. So I moved out right when I turned 18 after high school graduation. I got into a little bit of trouble, lot of debt, and spent years clawing my way out. I got a DUI when I was 19. I had no job. My buddies would go to Ryan’s steakhouse and put food in bags for me.

The blessing was all my friends were in school. At some point it just hits you: These people are all moving on, and I’m stuck. The environment my parents put us in was a gift.

Georgia Tech told me you got to go to community college; you got to take these nine classes; you make these nine A’s; we’ll let you in. So I did that. I was working two jobs, taking classes.

Hakes majored in international affairs and economics at Georgia Tech, then earned a PhD in decision sciences at Georgia State University.

My natural aptitude was being more of a talkative type of guy. I realized if I could really combine a much harder skill with a more natural inclination to do something like public speaking, maybe I’d have something unique. That’s what set me on a path of education in quantitative methods.

Hakes’ first two businesses failed.

I think entrepreneurs actually thrive on risk. They are at their best when faced with the challenges that a lot of folks kind of cringe at.

I started in an investment company in the late 90s with a couple of business partners. They were smart guys but they just weren’t the right business partners. I learned then the value of a good business partner.

Then I started my own business, going out as an army of one. I didn’t really have the right network of people. You know the old adage: it’s not what you know; it’s who you know. Couldn’t be more true in trying to build business.

A ton of businesses fail because they are not working on the business; they are working on getting the business registered or handling health benefits or dealing with whatever administrative burden or legal document has to be managed. It doesn’t take 5 percent of your time; it takes 50 to 60 percent of your time.

My wife wanted to come home and take care of the kids. And I needed health care. So I started working for another small company, an analytical start up here in Atlanta. The owner was just an incessant worker to do the right things for the clients. I think I thought if you just got smart that was sufficient. But it’s not. You’ve got to work harder than everybody else because there’s a lot of smart people out there.

The small firm he worked for eventually was sold to a larger one. Hakes moved up the ranks, then shifted to another firm. But Hakes and Groer, who had been a colleague of his, saw the demands on the analytics business change as the flow of data became more intense. Neither was convinced the companies they worked for would pivot enough to take advantage of the shift.

We felt like it was time to go out on our own. When you start a company people want to believe you can just go out on your own and magically have this big contract that makes it nice and easy to segue into this new company and go out and live the dream. But that almost never happens.

Hakes and his partner spent on clients, but scrimped on themselves.

We had enough money each to live for a while without having to dive into retirement accounts but we both had a house with mortgages, two car payments and two kids and wives who were working (at home) so they didn’t have any incomes.

(After we quit our jobs) we flew to conferences to try to entertain prospective clients. Unfortunately you don’t take people to Denny’s. You take them to nice dinners. There’s tremendous value in that.

We would take red-eye flights to save money. We would share hotels rooms. But when you see at the end of the month no money come in and $10,000 come out of your checking account for the flights and the hotel rooms and other things, that was very scary, with no real prospect to turn it around.

Some guys we had known in the past that we had worked with said, we will loan you some money, a six-figure number, to get the company started. We’ll help your manage your accounting and your HR, but we are going to own a part of your company to take the risk. We said, “Yes.” We paid the loan back, plus 40 percent interest in nine months.

The investor still owns a minority stake in Link Analytics.

Upon a reflection that was a very important thing for us to give up a piece of the business to focus on the business.

Still a small company, Link Analytics competes for talent with lots of companies, many of them bigger and better known.

We have to pay competitively, but we can’t match Google and Yahoo and Twitter. We offer a vision: when you come here you are going to contribute to the next day’s success of the whole company. I’m trying to sell the entrepreneurial spirit of who we are and what we continue to build.