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photo: GEEK SQUAD (ROBERT STEPHENS)
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‘Chief Inspector’
By COLLEEN DEBAISE Robert Stephens remembers the first time he saw the Internet, in a research lab at the University of Minnesota, around 1990. He likens the moment to the California Gold Rush.
By 1994, the former computer-science student had dropped out, turned a side job repairing PCs into Geek Squad, and was sending employees dressed in nerdy uniforms to fix computer glitches at local companies or homes.Eight years later, the company that Mr. Stephens started with $200 was acquired by Best Buy for about $3 million. Today Z has 20,000 employees in 1,038 Best Buy stores and seven stand-alone locations. Mr. Stephens, 40, has stayed on as a Best Buy vice president. He spoke with The Wall Street Journal about his path as an entrepreneur. Here are excerpts of the interview: WSJ: What made you drop out to start a business? MR. STEPHENS: In the early ’90s, a degree in computer science could really only get you a job in a large corporation. Lots of people were leaving college with a lot of debt. I didn’t want to have to worry about paying off student loans. And it’s easier to do a start-up in your 20s, because you can be selfish—you don’t have a family yet. WSJ: Did you really start the company with $200? MR. STEPHENS: Yeah. I had a mountain bike and a cell phone. I was still a student at the time, but once I realized it was a potential business, my grade-point average started to drop. WSJ: You grew Geek Squad without taking on debt. How? MR. STEPHENS: It was very easy. If you think about it, the reason that most service companies stink is that you don’t need much money to get into them. All I needed was business cards and a phone number. If I did a good job, if I worked enough hours, if people liked me, I’d get referrals. I grew it one step at a time, one employee at a time. Then I was making enough profit to expand to other cities. In Los Angeles, I didn’t need an office—I drove the Geekmobile [one of the company’s vehicles] myself all the way there—and found that if you keep buying coffee in [a hotel] lounge, you can make all your calls [there]. Once you’ve hired agents, they can be dispatched by cell phone. WSJ: What’s the best part about running your own business? MR. STEPHENS: You can call yourself whatever you want. My title is Chief Inspector. Calling myself “CEO” of a one-person start-up after taking the bus to register my articles of incorporation felt a bit arrogant. WSJ: Why did you sell your business to Best Buy? MR. STEPHENS: Start-ups are more nimble and can be more innovative, but they lack the one thing that big companies have—and that’s leverage. When I came to Best Buy, I acquired their leverage. I had looked at other ways to grow, like franchising, but decided against it. You can franchise doughnuts and hot dogs, but even that’s not easy. I also didn’t want to take on investors; they just want to cash out. Best Buy was the best choice. At the time, we started to see Starbucks go inside Barnes & Noble and Target, and we began to see one brand could live in another, in harmony. I could envision Geek Squad right next to Best Buy’s electronics. It was kind of a match made in heaven. WSJ: Most founders leave when they sell their business—why have you stayed? MR. STEPHENS: Why don’t founders stay? They usually lose control. If I’m so smart, I should be able to convince Best Buy of the best strategies for the company. I’ll leave when I feel it’s done—but frankly, I think it’s all just starting. WSJ: Any advice for other entrepreneurs hoping to make it big? MR. STEPHENS: Don’t take the money. Do it yourself. I recommend a diet of ramen noodles and very little sleep. If you don’t love your business, someone else will love it more than you, and do it better and be more creative. I have an irrational love of technology. I don’t care how much I get paid. WSJ: What’s the next hot area for technology? MR. STEPHENS: I would say mobile-phone screens. Normal people are becoming geekified. Ever go to a cocktail party, and people whip out their cell phones to check Wikipedia and say “Aha! Sonny Bono was elected in 1987!”? WSJ: Any projects down the road? MR. STEPHENS: I intend to acquire companies that I find interesting, and rebrand them with a sense of humor. If I can glamorize computer support, wait till I get into garbage disposal and plumbing.
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