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Don't Quit Your Day Job

Helen Coster

Helen Coster, Contributor

7/03/2008 @ 4:00PM

Don't Quit Your Day Job

You can’t count on bankers or angels to get your venture off the ground. So maybe you should shoehorn it around a 9-to-5 career

Samuel Tharp spends 50 hours a week as a vice president at ZoomInfo, an Internet search service that helps companies find information about prospective employees. After work Tharp, 39, returns to his Acton, Mass. home and spends two hours on another job: He is the founder of year-old, a service that helps people plan funerals, send death notices and write tributes to those who have passed away. In April Otrib had 25,000 unique visitors who spent 15 minutes, on average, on the site. A month later Tharp started selling ads to companies such as, which pays $12 per 1,000 impressions. Otrib, which gets a cut of up to 15% on sales of bereavement cards and flowers that mourners purchase on the site, brings in $5,000 in revenue a quarter. Tharp hopes it will eventually grow big enough to free him from his day job. Until then Tharp, who spent $100,000 of his savings to bring Otrib to life, is happy to have his six-figure ZoomInfo salary to keep his company and his family afloat. “My day job gives me the freedom to take my time building Otrib,” Tharp says. “On my terms.”

Not so long ago an Internet venturelet like Otrib might have seen a swarm of venture capital firms, or at least some commercial banks offering high-priced loans. Nowadays such financiers want to see businesses with revenue, customers and a logo solidly in place before they commit capital. “It’s a betting game,” says Jeffrey Carr, executive director of the Berkley Center for Entrepreneurial Studies at New York University. “The things that used to be differentiators are now requirements. It’s harder to stand out.”

Lisa and Jeff R. Peri of Los Angeles depleted their $200,000 in savings, maxed out their credit cards and borrowed $300,000 from family and friends to develop and market their low-impact car-wash product. The concoction, Lucky Earth, comes in a quart-size spray bottle that retails for $17. It’s a mixture of water, coconut by-products, sodium carbonate and water-soluble silicone, blended with the notion that eco-sensitive customers will gladly substitute some elbow grease for a garden hose. The couple, who paid a chemist to make the car wash, started their company while working other jobs. Jeff ran a company called Location Junkies, which protects movie set locations from damage; Lisa was a discipline consultant to parents. One month they spoke with 20 banks and venture capitalists. “Most investors said to call when our revenue was over $1 million,” says Lisa, 37, “and we were like, ‘How are we supposed to do that if you don’t help us?’”

Eleven months into their venture, when the Peris had a cumulative $125,000 of revenue, they landed a small investment from Funk Ventures of Santa Monica, Calif. In May they quit their other jobs. Lucky Earth can now be found in 130 stores, including some in the Whole Foods and Akin’s Natural Foods Market chains. The Peris, who kept a majority stake in the company, expect to turn a modest profit this year. Says Lisa, “Entrepreneurs think, ‘I’ll come up with an idea and have VCS invest in us.’ But most VCS want a profitable company that they can make more profitable.”

With $100,000 in revenue last year, FlyingPeas, a 21-month-old online purveyor of baby clothing, is off to a decent start. Its founder, Terra Carmichael, 35, figures she will quit her 9-to-5 job as a publicist at SutherlandGold Group, a public relations firm in San Francisco, when the apparel company is yielding $500,000 of gross profit on sales of $2 million. That could be a year from now–or longer. The mother of 3-year-old twins is able to devote, at most, only the hours between 9 p.m. and 2 a.m. to filling orders and buying items like “My Dad’s a Geek” onesies, which she sells for $22, from 90 manufacturers and designers. “I’ve had search-engine marketers call me and say, ‘I can run you out of inventory–just let me buy some key words for you,’” says Carmichael, who claims her business is too small to interest venture firms. “But having huge success come on quickly seems overwhelming. I’m the one holding back my business.”

Adman Paul Cappelli, 53, hopes to establish a side business he can operate in retirement without taking on debt or investors. He wants to run Villa Cappelli, his olive oil and condiment business, full-time from Italy within five years. In 2003 Cappelli, Italian by birth, discovered a crumbling villa near his grandmother’s hometown of Puglia, Italy. The 22,000-square-foot shell sat on 7 acres on the Appian Way. It lacked doors, windows and running water, but it had a small vineyard and a grove of almond, olive and fruit trees. Cappelli paid $250,000 for the property and spent $500,000 in savings on renovations.

Cappelli’s side business works, in part, because he doesn’t have to tiptoe around a boss. At his day job he is the boss. The interactive team at the Ad Store, the ad agency Cappelli founded and runs in Manhattan, designed Villa Cappelli’s Web site, and its creative directors helped their boss design the label for its 1-liter bottles of olive oil, which retail for $35. Last year Cappelli spent $25,000 making Villa Cappelli products. He sold 4,000 bottles of olive oil, which costs $5 a bottle to produce. Every three weeks he travels to Italy, where he manages one full-time and one part-time employee, at an annual cost of $29,000. Cappelli fantasizes that he’ll be bringing in $250,000 in annual profits by the time he retires from the Ad Store. For the moment the ad agency is where the money is: revenue of $6 million a year from clients that include El Al Airlines and shoe retailer

Moonlighting was a short-term endeavor for Daniel Zawacki, who was a 24-year-old Honeywell salesman in Peoria, Ill. when he decided to build a mail-order lobster business. With $8,000 in savings, Zawacki started shipping live lobsters around the country and advertising his business through flyers at the mall. After six months of this he got sacked from Honeywell when his bosses heard him plugging the lobsters on a Chicago morning radio show. Zawacki and his lobsters had to move in with his parents for a while. Turns out getting fired forced Zawacki to put the time and effort into really getting Lobster Gram going. Lobster Gram has 50 employees and last year made what Zawacki describes as a decent profit on $12 million in sales. Says he: “To really be successful, I had to focus 100% on being a lobster guy.”

These days some employers are rethinking their policies about moonlighting to accommodate the entrepreneurial ambitions of talented employees. At ZoomInfo, Otrib founder Tharp told his boss, Bryan Burdick, about his online funeral planning venture when he was interviewing in 2007. “Sam was very up front about it and obviously very passionate,” says Burdick. He adds that over the past two years at least three ZoomInfo staffers have left to start their own companies. “It’s important to make sure that everyone’s objectives are clear, and to say ‘This is what success means for you here,’” says Burdick. “As long as they meet those goals, I don’t care what they’re doing in their off hours.”

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