Tripod Interview: Sue Rugge, Part Two

<body bgcolor="#99CC99" background="../../../work/interviews/img/www_subdomain/bg.gif" link="#0000FF" vlink="#663399" alink="#663399" text="#000000"> <table border="0" cellpadding="0" cellspacing="0"> <tr> <td valign="TOP" align="CENTER" width="178">  <table border="0" cellpadding="0" cellspacing="0" width="170"> <tr> <td align="LEFT" valign="TOP" width="100%"> <a href="../../../www_subdomain/adm/imagemap/logo-map.html"><img src="../../../img/nav/www_subdomain/logo.gif" alt="Tripod Map" border="0" height="58" width="170" ismap></a></td> </tr> <tr> <td align="LEFT" valign="TOP" width="100%"> <a href="../../../www_subdomain/adm/imagemap/universal-map.html"><img src="../../../img/nav/www_subdomain/universal.gif" alt="Member Services Map" width="170" height="45" border="0" ismap></a></td> </tr> <tr> <td align="LEFT" valign="TOP" width="100%"> <a href="../../../www_subdomain/adm/imagemap/zones-map.html"><img src="../../../img/nav/www_subdomain/zones.gif" alt="Zone Map" width="170" 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<select name="pod_name" onchange="self.top.podRedirect(this.options[this.selectedIndex].value)"> <option value="">Related Pods</option> <option value="Freebies">Freebies</option> <option value="MacComputing">Mac Computing</option> <option value="PC%20User">PC User</option> <option value="Second-Hand">Second-Hand</option> <option value="Smallbiz">SmallBiz</option> <option value="Travel">Travel</option> </select></td> </tr> </table> </form> <br clear="ALL"> <p>  <p> <p> <p> <table cellpadding="0" cellspacing="10"><tr> <td valign="TOP" width="155"> <p> <font size="+2"><b>Sue Rugge</font><br> Part Two</b> <br> <font size="-1">interviewed by Randy Williams on July 24, 1996</font><p> <img src="../../../work/interviews/img/www_subdomain/ruggebook.gif" width="153" height="185"><p> </td> <td> <br> <center> <font size="+2">"This is one of the least capital intensive businesses I can think of, but it's extremely time intensive."</font></center> <p><hr><p> <b>Sue Rugge</b> pioneered the information brokering industry, founding <b>Information Unlimited</b> in 1971, <b>Information on Demand</b> in 1978, and <b>The Rugge Group</b> (now Cooper Hydock Rugge, Inc.) in 1982. Today Ms. Rugge is largely retired from brokering and devotes her time to The Information Professionals Institute, for whom she teaches seminars and creates educational materials. Her "Information Broker's Handbook" has recently been released in an updated Second Edition. In <a href="../../../www_subdomain/work/interviews/960809rugge.html">the first segment</a>, Ms. Rugge gave her thoughts on the hype and the promise of using the Internet as a research tool. Now, in part two, she discusses her educational activities and gives practical advice for those wishing to start a small business. <p> <hr><p> <b>Tripod: Your book advises aspiring information brokers to plan on spending the first year on marketing -- even if that means paying a subcontractor to do much of the actual research. It sounds like somebody would need deep pockets to get started in this business. Yet you started your first business with an investment of $250 -- not much room for luxury there. </b><p> <b>Sue Rugge:</b> Well, it was a huge investment of time. Of all the businesses you can get into, this is one of the least capital intensive businesses I can think of, but it's extremely time intensive. The good news is the way we sell ourselves is not through paid advertising or direct mail or any of those things that costs a lot of money; it's through public relations type things. There's a lot of rubber chicken stuff involved in doing public relations -- meaning you go to a lot of meetings of associations and listen to a lot of dull speakers. But you also get to talk to the people who have come to the meeting and that's the way you promote yourself. If you're going to succeed, you'd better spend your time doing a lot of that even if you're really a good researcher. Subcontracting doesn't mean that you don't make any money out of it. I believe that the markup is easily 100% from what you've been charged from your subcontractor to what you charge your client. <p> <b>Tripod: How can you get away with that?</b><p> <b>SR:</b> You act as the go-between. You haggle over details and money with the client, then you use your network of highly specialized research subcontractors to find the right person for the job. When you bring it to the subcontractor you say, "This is exactly what I need, this is the budget I've got, and I need it by this day." You've done all the legwork; the subcontractor doesn't have to do anything, they just do the research work that they love. They enjoy the fact that you're basically bringing them business on a silver platter that has no overhead connected with what they're doing. So if you work with a subcontractor on a fairly regular basis, they're going to recognize that and give you a break on their charges. That's certainly the way I built the Rugge Group -- on the premise that I would pay them within 30 days no matter whether I'd been paid or not. They didn't have to deal with the client if they didn't want to; all they had to do was give me the results and I'd take it from there. That's money in the bank as far as they're concerned. I wouldn't portray the fact that you spend your time marketing as meaning that you won't necessarily have any revenue. <p> </td> </tr>  <tr><td valign="TOP" width="155"> <font size="+2">"Business usually comes down to figuring out who you know and what you know." </font> <p> </td> <td valign="TOP"> <b>Tripod: For a young person trying to break into this field, would you recommend trying to be a subcontractor or approaching at it from the other angle -- trying to be that go-between?</b> <p> <b>SR:</b> I don't think they can start as a subcontractor unless they have the capability to do so. You're not talking about very many people who have enough information resource background to be attractive to an experienced broker. Unfortunately, that's what really appeals to people; they say "I want to go work for a information broker and learn the ropes." Most information brokers -- 90 percent of them -- don't hire people. If they do hire people, they hire administrative people; they don't hire researchers to be on permanent staff. If they're going to subcontract, they're going to hire people who know more about a particular area than they do and that's usually not somebody who's starting out. If you really want to do this, I'm afraid it comes down to figuring out who you know and what you know -- and how those two things can come together to help you create the client base as quickly as possible. The reason you need to do it as fast as possible is because you probably don't have incredibly deep pockets -- you have to support yourself and pay your rent or mortgage or whatever while you're getting this venture off the ground. <p> <b>Tripod: That sounds pretty daunting, yet your Information Brokering seminars are very successful. Can you talk a little bit about your seminars and the people that come?</b> <p> <b>SR:</b> Well, the demographic has changed dramatically. From 1987 to 1991, they were 90 percent women. Probably 90 percent librarians to tell you the truth. That's where this field started; the people who have been in research the longest. They have almost all been in some sort of information resource background. But since about 1992, when the economy started turning downward, I was getting more and more people who were introducing themselves as graduates of IBM or graduates of AT&T or something like that. The mix of men and women became more balanced and the number of librarians began to dwindle -- to the point where this year, I've had seminars where there were none of them whatsoever. Instead of noting attendees were male or female, what I realized the people who were attending the seminars were the breadwinners for themselves or their families. Their interest in information brokering was not in expecting it to be something they could do on the side or after they retire to make a little extra money. In my opinion, those approaches just don't work anyway -- there's not enough intensity, and you have to be devoted to make this field work for you. The people who make it, whether they're male or female, are the people who go into it on a full-time, intensive basis, with their eyes open and willing to work themselves to death the first year to get that client base established. <p> </td> </tr>  <tr><td valign="TOP" width="155"> <font size="+2">"A common fallacy is that everybody needs information and the whole world is your market." </font> </td> <td valign="TOP"> <b>Tripod: So what wisdom do you impart to these breadwinners?</b> <p> <b>SR:</b> As far as what I say in my seminar, I say a lot of what I've been saying to you. It's all about the business aspects: I give a lot of factual information but it's also anecdotal -- what I learned in 30 years of doing it. I start my seminars by saying, "The reason I'm telling you that you need to do these things is because I never did any of them, and I know what happens when you don't." <p> I talk about legal considerations and setting fees. I spend two or three hours on marketing, questions your business plan should answer. It's amazing how many people want to jump right in without a solid business plan. You should write a business plan for yourself! It's important to you personally, not to the rest of the world. You need to figure out how you're going to focus your business, because a common fallacy is that everybody needs information and the whole world is your market. If you try to market to the world, you're dead. You can't do that; you have to specialize and do something better than anybody else out there. <p> <b>Tripod: A lot of that same information is in "The Information Broker's Handbook." Are you having a good amount of success with the book, and do you consider it a decent substitute for the seminars?</b> <p> <b>SR:</b> Yes, it's in the second edition and it sold over 20,000 copies of the first edition. For such a niche market, I thought that was pretty good. The book is probably not so much a substitute as a supplement to the seminars. I also have the seminar on audio cassette. It has six hours of audio and comes with a three-ring binder with about 200 pages of handouts. It also includes a half hour of telephone consulting with me, so questions that come up with the audio tape can be answered. I mainly do that because I realize that not everyone can physically make it to one of my seminars. <p> <b>Tripod: One of the things we cover on Tripod is the erosion of the traditional workplace and the corporate ladder -- the need for modern workers to think of themselves as a kind of corporation. Your book and seminars fit right into that notion, and it sounds like your own life was ahead of the curve by about 25 years.</b><p> </td> </tr>  <tr><td valign="TOP" width="155"> <font size="+2">"It is vitally important to determine what you can realistically do yourself." </font><p> </td> <td valign="TOP"> <b>SR:</b> When I conceived the Rugge Group, it was a virtual corporation years before that term was ever coined. The idea was that I could unite my colleagues throughout the country, people who I knew to be the best researchers in their fields. Then I could go out and market them; I could be my own person and not have actual employees. This turned out to be impossible, but that's what I was trying to do at the beginning. I thought, I'll just be here and market and I'll hand off the searches to all these folks who seem to be really excited about the concept -- but then what I realized is that I was standing in line at the post office getting my postage meter filled while my phone was ringing off the hook with clients. I was not following my own advice. I was not doing what I do best and hiring the rest. I was trying to do it all. <p> In the beginning, you may not have the money to hire people, but try to surround yourself with the ancillary services that you can pay for. Know how you can get a copy shop to come pick up and deliver stuff free of charge and how you can get your postage by mail. Have a CPA or really experienced bookkeeper in place that you can call on, and have an attorney in place that you can call on. You may not need them right away, but when you need them desperately is not the time to have to go looking for them. This is true with any small business that you might be thinking about: It is vitally important to determine what you can realistically do yourself -- what you're going to concentrate on -- and to find efficient ways to outsource the other services that you will need. <p> <b>Tripod: Any last words of advice?</b><p> <b>SR:</b> People should really examine what turns them on, workwise. If marketing is not one of those things, then they really should think twice about getting into information brokering -- or any small business for that matter. For this particular business, it helps to have a really heavy background in searching and information gathering. For example, having been an investigative reporter is a really good segueway, or having done competitive intelligence or market research in larger firms. Think about what subjects you know and like and follow that path to specialization. People often call me and ask what databases they should choose. I ask, "Who's your market?" They say, "Well I haven't thought about that yet because my computer's not set up." They have it totally backwards! You can't figure out thedatabases until you've figured out your market. Look at your business with less naïve optimism and more objective observation of your own strengths and weaknesses. 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