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3Qs with Michael Johnstone of eLocomotive

February 4, 2008

This week I posed three questions to more than fifty CEO/founders of startups in the Dallas area.  Throughout the week I will post the responses of the best ones.  If you are interested in  participating in the future just drop me a line.  Michael took the time to answer this week’s 3Qs:

Question One: Given the uncert ainty in the financial markets (weakness of the dollar, high cost of oil, sub-prime mortgage mess, growing unemployment, possible recession) what changes (if any) will you make in your business?

I know there is concern about the economy but that seems to stem from specific sectors. I’m seeing a lot of activity and excitement so I’m still optimistic. As a precautionary measure, eLocomotive will spend more effort on marketing and we’ll continue to nurture relationships with our existing clients. Some of our customers feel these pressures but web applications and Web 2.0 give them a great ROI. As long as we stay focused on their needs, they’ll keep coming back. One other benefit we have is low operating cost. At eLocomotive, we eat our own dog food (we use custom websites & web applications to manage our business). The eLocomotive team and infrastructure is automated and optimized so oil prices don’t impact us directly.


Question Two: What advice can you offer to ‘would-be’ entrepreneurs who are thinking about starting a business in the current economic climate? Would you start your business today? What would you do differently?

In my opinion, the right time to start a business should be defined by the business (model and opportunity) and your preparedness, not the economic climate. Even in a deep recession, some people have jobs and some businesses earn money. My advice is pretty basic:

  1. Make sure you understand your customers needs. Don’t assume and don’t spend time pixing a problem that doesn’t exist. Address your customer’s problems directly. If you’re not sure, ask them. I do and I’ve gained great insight that way.
  2. Watch your costs. Every quarter, I review eLocomotive’s expenses and I pay special attention to recurring costs. These expenses can grow quickly. $20 a month doesn’t sound like much but when you multiply it by 6-10 employees and 6-10 services it comes to a lot.
  3. Be careful of distractions. Entrepreneurs see many opportunities for their products and services. Successful entrepreneurs manage their time as closely as their money. If you spend both on too many projects at once, you may come up short on all of them.

Question Three: Are you using Facebook, MySpace, LinkedIn? What are you using these social networking tools for? Prospecting? Recruiting? Other?

Most social networks have their own flavor. When eLocomotive consults on Web 2.0 projects, we must know the best approach for each client and that means understanding all the networks out there. I (and the eLocomotive team) have accounts on most social networks and many web applications. We use them for branding, connecting with contacts, and testing for my clients.

Company Name: eLocomotive
Year Founded: 2003
URL: http://eLocomotive.net
Key Personnel: Michael Johnstone CEO
Invested Capital: Bootstrapped
Revenue: Undisclosed

Written by Alexander Muse · Filed Under Blog, Startups 

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