The Avcom Exec Who's A 'Self-Taught CEO'

Five years ago, Avcom Technologies Inc.'s executive director Rob Wolfe went to work only to find the solution provider's office doors locked.

The 20-year-old Sunnyvale, Calif. reseller had shut down due to ongoing financial difficulties.

The end of the company's run turned out to be a blessing in disguise for Wolfe and gave him the opportunity of a lifetime. Within hours he had made the decision to open his own company, AvcomEast Inc., based in Vienna, Va.

"We started the company from scratch and within a week we transacted our first dollar," Wolfe recalled. "I actually built the business backwards. I started and funded the company and then wrote the business plan."

So how'd he get back on his feet so quickly?

Wolfe sought the counsel of more seasoned pros, but soon realized these future competitors weren't very eager to share their insights. So Wolfe became what he called a "self-taught CEO." His entry into the operations side also gave him a fresh perspective; instead of running a company on a multiyear business plan, the company re-evaluates operations every six months.

"The industry presents a constant challenge," Wolfe said. "We sit down and figure out what needs to be modified and find ways to evolve the solution sets we sell. I don't think what we're doing is anything unique or rocket science, but we are constantly thinking about what we can offer our customers."

Part of the process, Wolfe said, is questioning whether new vendors fit the core values of the company and if they will add incremental value by enhancing solutions.

"It's our philosophy that whatever you're doing on the path eventually becomes commoditized, but we're not in the business of commoditizing products," Wolfe explained.

Wolfe points to Windows as an example: When end users need more licenses, they can easily go online or to a store to buy them.

"Where they once were new products, now they are just accessories to solution sets," he said. "You can't make margins by offering nothing but commodities. You make money from consultative sales, offering something that in no way users can get from a Web site. What used to be the entrees have become the fries."

What Wolfe believes is more important is talking to clients not about vendors and products, but what their business goals are and then figuring out how they can be achieved.

Just as some products have become commoditized, Wolfe also thinks that is the case with some companies' IT departments. "The margins for solution providers get sucked out. Most of the Fortune 500 companies have their own IT staffs making decisions."

Therefore, Wolfe believes, like many, that the money lies in SMB, which his company focuses on exclusively. For smaller and mid-size companies whose needs are constantly changing, AvcomEast can offer solutions that mesh with its growing needs.

"We look for emerging companies which don't have enterprise solutions or don't have the administrator knowledge and we implement ideas as they go along," he said. "One of our biggest customers started off making tens of thousands early on and we became an integral part of their IT decision. Now that company makes millions and has its IT staff making decisions."

But what happens when that burgeoning company becomes too successful to need outside solution providers? It's like a stack, Wolfe said: Once the top of the stack goes, it's vital to have stacks in place underneath, which means getting out there and getting new customers instead of relying on those already in the stack. Hence, the six-month review plan.

That mindset has paid off. AvcomEast's business is five times what it was in the first year, sales climbed 25 percent from 2006 to 2007 and the company is expanding geographically.

"It's Darwinism," Wolfe said. "Either you evolve or you become extinct."