Firing the Boss

How Zycron CEO Darrell S. Freeman grew his company by replacing himself

After just a year in corporate America and at the age of 26, Freeman decided to become an entrepreneur. What he lacked in experience, he made up for in youthful exuberance. “That’s what you do when you’re young, and you don’t have any idea about the potholes that lie ahead, and you’re not thinking about all the problems that you might run into,” he says. “At that point, I didn’t try to count what the obstacles would be. I just decided I’d do it.” Among those obstacles was—as one can imagine—insufficient capital. Freeman maxed out all his cards and found himself with nearly $30,000 in credit card debt.

Course Correction
Making matters worse, the initial company was in a low-margin business—buying, reselling, and installing computer systems. “If you wanted to buy a computer from me, or two computers, I would charge those computers on my credit card. When I sold them to you, I would bill you,” Freeman recalls. “Hopefully, you would pay me within the time period needed before my bill was overdue. I can remember going to get gas one day and my credit card was not taken because it was overdue.” The company’s first contract: a $9,000 network installation in 1992 for Minorico Supply Co, a local industrial business.

Profits were scarce and with e-commerce taking off in the ’90s, competitive pressure skyrocketed, forcing retailers to lower prices. Zycron’s current model was no longer sustainable. Fortunately, Freeman knew that successful entrepreneurs have to be flexible and be prepared to adjust their business models. “I saw that coming and said, ‘Hey, we’re going to focus on the service side of the business because it’s very hard to commoditize a service,’” Freeman says. “Also, with a service, you get a chance to add some value and establish relationships with the clients.”

The strategy worked and by year’s end in 2006, revenues grew to $19.4 million, a 17.8% increase over the prior year. But Freeman says the company hit a wall and wasn’t confident the company would continue to grow at a rate he was happy with, which was closer to 25%. As the chief executive, Freeman says the fault was his.

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