Business Spotlight: Evolution of an Entrepreneur

The second-fastest growing company in Missouri the last three years is Springfield-based e-commerce agency Classy Llama Studios LLC. At least, that’s what Inc. magazine says in its latest list of the fastest-growing private companies.

Classy Llama owner Kurt Theobald tempers the accolade with a dose of honesty. “We committed one of the cardinal sins of startups,” Theobald says of his 23-employee technology firm’s 1,000 percent three-year growth rate to earn a spot on the coveted Inc. 500. “We grew too quickly.”

Founded with Erik Hansen in 2007 in a small office resembling a fraternity house before operating 18 months out of Theobald’s two-car garage, Classy Llama recorded 2012 revenue of $2.4 million, up from $213,000 in 2009 – enough to nab No. 454 on the 2013 Inc. list published last month.

Classy Llama leads the pack of the seven area companies ranked and sits behind only Liberty-based The Logistics Store among all Missouri firms listed.

With other startup experiences – Theobald has started nearly a dozen companies – the serial entrepreneur says he’d never met such high demand for services. Theobald says he gulped down any business that came his way and figured out how to complete the projects later.“It was really easy to say yes and to build a team around that,” he recalls. “We just ended up eating a bunch of work. We actually delivered good value to the market, but it was definitely more painful to deliver that value than it had to be.”

Key to the demand, he says, was partnering early on with Magento, an open-source e-commerce platform launched in early 2008. Magento is known for providing e-commerce solutions to some 150,000 business – Toms Shoes, Nike and OfficeMax among them – and following its strong start was purchased by eBay Inc. in mid-2011. Classy Llama has folded the Magento platform into websites for clients such as PayPal, Glo Professional, eChristian and Camp Chef. Today, 100 percent of its projects incorporate Magento, Theobald says.

Young gun
At 28 years old, Theobald already has more entrepreneurial scrapes and bruises than most businesspeople twice his age. “I tend to have to learn things through pain,” Theobald says, and he has taken his lumps along the way, notably a personal bankruptcy filing in 2008.

Theobald started his first business at age 19, contracting painting jobs under Chameleon Painting.

“I hated it,” he says. “I worked in painting as a teenager and it was great, but running a paint contracting business was awful. That didn’t last very long.”

Other ventures that failed to gain traction were taxi-top advertising via Emphasis Marketing Corp., interactive touch-screen computer stands under Xponix Inc., the Zion Auto Sales car lot and selling hydrogen generators for vehicles.

With business partners, he was juggling a couple of businesses when Classy Llama came into the fold, originally as a subcontractor for website designs. It moved to front-and-center pretty quickly.

The garage days quickly came to an end, and Classy Llama moved downtown to West Olive Street.

“At the worst of it, we had 10 people in a two-car garage. You literally had to get up when someone had to go to the bathroom and get out of their way,” Theobald says. “That’s when it was time to move.”

Co-founder Hansen spotted Magento’s e-commerce platform shortly after it arrived on the market, and the team quickly saw the value of merging e-commerce into its content sites. Classy Llama helped launch one of the first Magento sites to go live locally, BeeYoutiful.com, a seller of herbal and nutritional supplements.

As one of roughly 85 Magento solution partners in the U.S. and nearly 300 worldwide, according to MagentoCommerce.com, the company has developed around 40 sites and worked on 80 projects with Magento.

Working with 25-30 active clients, Classy Llama handles full deployment, from design to live site, and added post-launch marketing services in 2012 to become a full-service e-commerce agency.

Slowdown
Today at the Galloway Village office, a software engineer studies his MacBook screen seated on a couch while another walks by with his laptop tucked under his arm. Theobald says the open workspaces create casual yet collaborative workflow among the designers, project managers and salespeople. The average staff member age doesn’t exceed 30, and the team is known to meet off-hours on site for Nerf gun wars.

Project manager Bill Cover joined Classy Llama last year, leaving a communications team leader position at BKD LLP. “I could tell from looking at the website bio section that the people who worked here seemed like a lot of fun and that the culture would be something that I would want to wake up in the morning to come to work for,” he says.

Cover is among nine employees who play on a Classy Llama soccer team, where intense games can lead to high emotions and yelling between co-workers. “But we leave it on the field. That’s the way we work, too,” he says.

While the Nerf gun artillery is behind closed doors at the office, except for once every couple of months, he says such stress relievers help to lighten the mood.

“During hours, we might pick up the occasional dart and throw it at somebody,” Cover adds. “We believe that life is essential to being able to work well. We don’t require that anyone shows up before 9, though most people do. We don’t put a lot of strain on people.”

Coming out of the trying growth period, the company this year strategically shrunk its staff count by a net of seven positions. Theobald says the moves are a result of his learned experiences.

“That’s one thing that’s changed a lot, really being slow to hire,” he says. “It’s refining. 2012 was more about getting our processes in place. 2013 has been more about the right people on the bus and the wrong people off the bus. It’s just a matter of what fits for Classy Llama.”

He says the company has been profitable each year, but sometimes only eking out profits.

“Last year was our most profitable year, and that’s because 2013 hasn’t closed yet,” he says, projecting a comparably modest 10 percent revenue growth this year. “This has been a significant year of reorganizing, resetting and reframing our business. That certainly always limits growth, and that’s OK.

“If I had to go back and do it again, knowing what I know now, I wouldn’t grow as quickly.”