Business S I L I C O N VA L L E Y / SA N J O S E E-DITION Subscribers: full content at JOURNAL JUNE 24, 2005 our Web site. VOL. 23, NO. 7 LEADS! 96 N. Third St. Suite 100 Critical data for running San Jose, CA 95112 your business. STAY CAUGHT UP: Sign up for free e-mail news updates at sanjose.bizjournals.com while.” He took an idea In 1994, with the Internet just coming of age, Mr. Alvin tapped people he knew to get underway. and $5,000 “I knew some really good, long- haired people, geeky as they come into the garage in the IT department in the com- pany where I was working, and I and emerged with thought maybe I could entice this guy to do an Internet company with me,” he says. a company that’s The lure wasn’t money or stock options, as Mr. Alvin recalls, but it breaking ground did take the promise of a Sun work station and a 56k phone line. in e-marketing “I definitely had the right bait,” he says, noting that the first em- ployee — Mitchell Wright — is still with NetLine as its vice presi- dent of information technology. “I Hobbyist couldn’t have started with a better person,” he says of Mr. Wright. They came up with the name and got the domain name. “So what were we going to do? tinkers That was the big question,” Mr. Alvin says. The answer fell out of a maga- zine. It was one of those cards that you fill out to get a free profession- way to al subscription to what’s called a “controlled circulation” publica- tion. “I missed one little box,” he Profile success says of the form. The magazine bounced it back to him, demanding ■ he answer the question or no free subscription. “So I filled it out with a zero, fold- DENNIS G. HENDRICKS ed it up and put it back in the mail. APPETITE FOR INNOVATION: Bob Alvin has the right bait to reel in and keep high-quality staff at his media services Six weeks later it came back again company NetLine. He also experiments with various hobbies, including an aborted attempt at aquafarming blue and it says ‘Sorry, you have to fill African lobsters. out a new card. We’ve changed the card,’” says Mr. Alvin. BY DOUGLAS E. CALDWELL e-marketing firm, is not unusual, astic about his company since he The cumbersome process, fraught firstname.lastname@example.org given Mr. Alvin’s eclectic outlook. founded it in his home in 1994 as with easily-made mistakes, and His office-farming of mushrooms the first online registration service bogged down with snail-mail de- “What is this?” Bob Alvin asks reaped large crops, which he of- for trade magazines. He makes the lays, inspired Mr. Alvin to come a visitor to his Los Gatos office, fered to his staff, he says. But with founding sound almost informal. up with a product for his company- holding up a basketball-size gray- few takers, Mr. Alvin has since “The reason I founded the com- without-a-product. ish-brownish clump of a sponge- moved on to other hobbies. pany is I have a bachelors in elec- “So NetLine was the first com- like thing. “Bob’s a very likable guy,” says trical engineering and a masters in pany to offer online subscription Three guesses don’t even come Mike Hackworth, chairman of Cir- computer science and I wanted to forms for controlled circ publica- close. rus Logic and an outside board learn more about the business side tions. We started with a small com- “It is a sawdust ball covered with member for NetLine. “He has a of companies,” he says. “I didn’t pany called Integrated Systems De- mycelia for shiitake mushrooms,” great sense of humor. He’s inspi- realize how quickly you learn sign and Unix Review,” he says. he says. rational and has very charismatic about all the administrative tasks But the idea and the name A mushroom ball in a corner of skills. He’s demanding but that’s of a company such as dealing with evolved. the office of the chief executive liberally sprinkled with humor.” the state, payrolls and other things “Bob is an extremely bright, ar- officer of NetLine Corporation, an Mr. Alvin says he’s been enthusi- that really get monotonous after a ticulate, forward-thinking busi- Reprinted with permission from The Business Journal ALVIN: Ardent hobbyist grows media services firm NetLine along with mushrooms and pet lobsters ness person. He’s quick to come big heart. He will always, always, up with new ideas and is one of say what he feels. There is no fil- those unique people who likes ter between what Bob thinks and to take an idea and drive it into what he says. You’re always going a business practice and experi- to get the truth from Bob.” ment to determine whether it is a NetLine was a bootstrapped op- worthwhile effort,” says Mitchell eration from the first. While hold- Levy, partner at CEO Networking ing down a full-time job with a and director of the Silicon Valley semiconductor company, Mr. Al- Executive Business Program at vin devoted his mornings, eve- San Jose State University. nings and weekends to nurturing NetLine his own company. “The nice thing discovered is it started off profitable,” he NETLINE CORPORATION that while says. It was capitalized with a to- Bussiness: Leads generation, it had come tal of $5,000 with half of it from online marketing, automation and up with his sister-in-law.” communication management ser- the better By 1998, Mr. Alvin had quit his vices and products. Address: 16795 Lark Ave., mousetrap, day job. “Moved into my garage. Ste. 210, Los Gatos, CA 95032 it had to ed- Set up an office. Hired an em- Phone: (408) 884-1200 ucation the ployee. It worked well and we kept Fax: (408) 884-1284 mice to use going,” he says. “It was the pub- Web: www.netline.com the Inter- lishers … who pushed us into e- CEO & Chairman: Robert Alvin net-based marketing for them. They pushed product us into doing a lot more with the at a time data and tracking the responses, when print publications and their the clicks and the links, which fulfillment houses were unfamil- has brought us to our NetLine en- iar with the Web. “As a technical person I didn’t realize how old that [print] indus- ‘A lot of people have try was and how archaic it was a lot of great ideas and never act back then,” he says. “These days they send everything off to India on them. Bob is not one of those; and other countries to get key- punched in. A lot of this is done Bob acts on his ideas.’ electronically. I think for some of the technology publications, 25 Mitchell Levy percent of their subscriptions are Partner, CEO Networking collected online.” NetLine has changed, too, now terprise marketing platform tools. offering leads generation services It really was the customers who used by publishers and their ad- drove us at first.” vertisers. Mr. Alvin tries to play racquet- “He has a lot of ideas and those ball three or four times a week. DENNIS G. HENDRICKS COMPETITIVE EDGE: Bob Alvin funnels his competitive nature into his business and on the racquetball court. ideas in the business world turn “It’s good, it’s fun. I’m competitive into companies or divisions with- in the fact that I just like to get out in a company. Those ideas in his and play and when it’s over, it’s with some of this stuff,” he says. I promised my fiancé for the first personal life turn into a unique over — it’s just a game,” he says. “My first big mate got out of the year, as we assimilate my three set of hobbies,” says Mr. Levy. “A He’s an ardent hobbyist — and tank and got away. I found him un- children and her child in our new lot of people have a lot of great not just a single hobby, but dozens, . der the TV The other guys started household, I will refrain from any ideas and never act on them. Bob perhaps scores — say his friends. killing each other. Finally I got extreme hobby that would either is not one of those; Bob acts on his One was aquafarming. down to a few and I knew I basical- distract or clutter our lives,” Mr. ideas.” “I had shipped from Florida ly had to close down business so I Alvin says. “But I’m not getting Adds John Bennice, president of some blue African lobster babies ate the last one. He was good.” rid of my tanks.” Bennice Group in Rio Vista and and set up some big tanks at home Aquafarming. Mushrooms. All an early NetLine employee: “He’s and got some books on aquafarm- may be put on hold for just a got a winner’s ego but not at the ing. But unfortunately, I was too while, he says. DOUGLAS E. CALDWELL is associate editor of expense of his people. He’s got a busy to pay attention and to deal “I’m getting married in August. the Business Journal. Reach him at (408) 299-1835. In his own words ■ Bob Alvin on surviving the dot-com crash: count and move to VC funding by lot of the employees are still here. the only one around. When we say “We had a dot-com turning point. the end of the year. I was ramping The one thing we did well — and I we’re going to have this much cash In early 2000, we watched companies up the headcount … [but] in 2000 at attribute it to our CFO at the time, in the bank, we’re going to have that like Digital Impact that did e-mail the end of the year it was basically , Werner Mansfield, who’s now our much cash in the bank. marketing with a million-one in ‘nice of you to come by and talk with president. He’s very conservative. As a turning point, we have cash revenue have over a billion dollars us. Good luck.’ And so it was tough. . I’m kind of more the sales guy But in the bank and it’s still flowing into valuation when they went public. It took a lot of scrambling. we’re really tight on cash flow. We the bank. We’re still growing. From Now you have to say to yourself, we It’s really tough to do layoffs two manage that thing to death. Unlike a company point of view, it makes were making $700,000 in revenue, years in a row around Christmas the days of the dot-coms, where you a lot less stress for the CEO. And we’ve got to be worth at least half a time. We scaled back quite a bit. took in money and it was easy to I hope I’m done getting more gray billion dollars. That’s what we were The founders and myself cut our spend. hairs because I picked up a lot dur- thinking. salaries in half. But we believed we But that’s not how you run a busi- ing that time. So with that kind of logic, which could turn it around. It was a good ness. We knew that but we got caught I’ve also changed my life, too, in really wasn’t logic, I was able to two years before they got everybody , up in the frenzy but we survived. terms of doing more exercise, keep- raise $1.4 million relatively easily back to their normal salaries. It was It’s nice to know one of our bigger ing my weight down because I used from angels. The big plan was to get tough. We had to lay off some people; investors says that of all his invest- to have a sitting-around-the-desk-all- that money in, ramp up the head it was either that or go under. But a ments he made at the time, [we’re] day belly.