An Interview with the Founders of Lux

January 25, 2002

The pronounced downturn in the technical services arena and the general economy have created a deep-seated anxiety about investing in or starting a new technically-oriented business. Given the environment, why are you re-entering the fray?

Jayson: The opportunities for business to profit in the digital realm have by no means decreased. There are life-cycles in business just as there are in the natural world, and any student of business history can readily identify the current downturn as an adjustment in the speculative aura that surrounds an early industry as it begins to mature. Every major modern industry has faced an enormous downturn after early success, and the Internet economy is no different. The opportunity for real, earnings-based companies will grow throughout this depressed period as the digital market expands and normalizes.

Ben: There are two ways to answer that question - the first is personal. Speaking for both Jay and myself, this is what we're good at. Running a service organization is where my heart is, and what I enjoy. Secondly, following the correction of the artificially inflated Internet boom, people and companies are ready to get back to business - real, profitable business, not the crazy speculative run that we just saw end. This is an excellent time for us to start a company of this nature.

Tell us about the early days of Saltmine Creative and what you learned about running and operating a new business in a volatile market.

Ben: The first few years at Saltmine Creative were incredible, like one of the old Ed Sullivan acts with the guys spinning dozens of plates on sticks. Our growth was unprecedented, and we were faced with adding people one after the other and expanding the infrastructure accordingly. We were never one of those companies that was growing just to show growth: we added people because we had so many plates in the air.

One of the most important ideas at Saltmine Creative was to prosper while operating with respect for the employees as a fundamental part of its management ethic. Of course this is easier to do when you're smaller, but I don't believe that we ever went wrong when we made decisions with our employees in mind. It's easy for companies to go on about employees being their number one resource, but it's crucial to follow through on a daily basis.

Other things we learned? Saltmine Creative was a profitable, earnings-based company for its entire life. We didn't have any large bank loans or VC participation - all of our growth was based on earnings and profit. You can bet that we'll be continuing that sort of fiscal conservatism as Lux grows.

Jayson: We started the company with $500 each, just enough to cover business cards and stationary. We persisted for 6 years under the notion that businesses ought to make more money than they spend. In the early days, we had no idea that we would go on to create hundreds of jobs and millions of dollars in revenue. Our credo was and still is to create a company that delivers family wages and is enjoyable to work for. When we won the Ernst and Young Entrepreneur of the Year award in 1998, they asked me what I was proudest of. Without hesitation I answered, "That we have been able to provide medical insurance for all of our employees and their families." We never schemed about going public or about "re-contextualizing" business as a lot of early online service companies did.

How are Internet service companies different from the dotcoms that have come to represent the Internet industry to most Americans?

Jayson: The dotcom concept - the whole phenomenon of acquiring investment for unproven Internet ventures - has nothing to do with the Internet services industry. Lux, like any legitimate professional service company, looks to fill the needs of solid corporate accounts or emerging companies that need help realizing their online business plans.

Ben: A service company, Internet-based or not, is an organization that performs a variety of services for its clients, charging more for those services than it costs to provide them. Even if the company performs its services in the Internet realm, it's a model that's been around for years and years and has proven to be a stable one. Although lumping Internet-based organizations together as dotcoms does many good organizations a disservice, there was a certain kind of company that threw the dice (usually using other peoples' money) in the late 1990s in an attempt to get rich. That kind of operation has nothing to do with what Saltmine Creative did or with what Lux does.

What makes Lux a different company than other service companies in the sector?

Ben: Jay and I are running it, and we've got some of the best people in the business as directors. We've had experience with a huge panorama of things, both good and bad, that can happen in the process of running a company of this sort. I'm convinced that Lux will become a leader in the space, both for clients and employees, pretty rapidly.

Jayson: Many Internet services companies became enamored of the dotcom approach - investors, IPOs, giving cars to employees, what have you. Their concerns were primarily maintaining a particular stock price, attracting the right kind of outside investment, etc. I would argue that any of these companies couldn't possibly be focused on client services and be public companies at the same time. They are non-organic in structure, hippogriffs with parts of different companies grafted together for a purely financial end. They exist not to serve clients, but to serve the investors.

Lux is an earnings-based company with no investors other than the employees actually doing the work at hand. It is small and simple, and an infinitely superior model if the expected outcome is a high level of customer satisfaction.

Can you really be a tech company and a service company? What takes precedence?

Ben: The two are intertwined. I don't see much of a dichotomy there. Service is service, whether it's technology, design, law, accounting, or what have you.

Jayson: When precedence is granted to a particular arm or branch of the company, it cannot be fully or truly integrated in its approach to development. Lux's approach to business matches its structure: client services, development, and design/communication. All of these disciplines must live and work well together or you become just another ad agency or software product company.

What's better - big companies or small companies?

Ben: I've worked at both, and they each have good and bad points. Sheer size can give you the leverage and resources to accomplish some amazing things. On the other hand, a small, compact company can move quickly and sometimes do some pretty interesting stuff.

Jayson: I have managed a three-person company as well as a 500-person company, and clearly they have different challenges and advantages. At the risk of sounding cute, I think you need a small big company, or a big small company - somehow combining the best of all possible worlds.

How did you guys meet?

Jayson: It was Microsoft - our previous lives in the product development world!

Ben: In the early 90s, we were both working in the International Division of Microsoft. We met through some mutual friends, and then ended up working on some projects together. That collaboration continued outside of Microsoft. When we started Saltmine Creative, we saw an opportunity that matched both of our sets of skills and interests. We're continuing to refine and benefit from this collaboration with Lux.

What are some of things you're proudest of in your success with Saltmine Creative?

Ben: Creating an atmosphere that enabled smart self-starters to become strong managers and leaders regardless of their background. Watching people buy cars, then houses, then start families because they were drawing a salary from our company. Helping ill employees. Being able to run a company the way I'd always thought a company should be run.

Jayson: We built a great company with an extraordinary reputation. It was wonderful to watch the company grow, to see employees bring up their kids and buy houses. That makes me feel great, even to this day.

What are some things that you've learned in the last few years that you'll apply as you move forward?

Ben: I think we have a good idea of what we want the mature organization to look like. Companies in this space before were growing wildly just to keep up with the growth in business. I think that with the changes in the market, our experience, and the increased education of our clients regarding the Internet, we'll be able to grow a company that provides a much greater degree of personalized service than would have been possible in the late 90s when most companies in that space were struggling just to keep up with demand.

Personally, I have specific ideas about what makes a good company, and although I don't mean this to sound arrogant, I would like the best company to work for to be one that I'm running.

Jayson: I believe that employees should have a greater ownership of the company than most companies allow for, and I think that it's important to keep the scale and activities of the company on a human level. Our ideal company is a haven for intelligent, creative people where individuals can express themselves openly and fully. That is my hope for Lux.

For more information about Lux, please contact:
Jayson Jarmon
206.328.9898
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