Many people dream of turning their expertise into an entrepreneurial venture, but few actually do it. While you can make money working as a consultant, the real challenge is creating a business around your passion and knowledge.
Daniel Yergin, energy expert, historian and Pulitzer Prize-winning author, started Cambridge Energy Research Associates in 1985 with a used $2 filing cabinet and a research assistant. Last year, the 200-employee consulting firm generated $40 million in billings.
To expand its operations, CERA merged in mid-February with MCM, a New York City-based consulting firm with 100 employees that specializes in the currency and debt markets. The companies will continue to work independently as well as together on projects, according to Yergin, who now serves as vice chairman of the parent company, Global Decisions Group.
“We are a small business serving big companies,” said Yergin, 51, in a recent interview.
He’s on the road promoting his new book, “The Commanding Heights: The Battle Between Government and the Marketplace That is Remaking the Modern World” (Simon & Schuster, $26). Co-written with one of his partners, Joseph Stanislaw, the book outlines the importance of entrepreneurial businesses as an engine of growth and explains why small companies can benefit from blurring international boundaries.
“The old state economy protected by borders is a thing of the past,” said Yergin, who grew up in Los Angeles. “Every day, the world feels like it’s smaller. Places once so far away and exotic have become part of the world community.”
Taking a global approach to serving private and government clients has been a secret to CERA’s 25 percent annual growth rate, Yergin said. About two-thirds of its business comes from retainers paid by virtually every major oil, gas and power company.
CERA also sells its “strategic knowledge” by hosting about 80 smaller energy conferences a year. A major meeting on global energy strategies recently attracted 1,500 participants in Houston. A May conference in Istanbul will focus on developing energy resources in central Asia.
To collect current information and better serve clients, CERA has offices in Washington, D.C.; Cambridge; Oakland, Calif.; Paris; Calgary; Oslo; Moscow; Hong Kong; Beijing; Seoul; Mexico City; and the newest in Buenos Aires.
“In each case, our model has been to start with one or two people,” Yergin explained. “The danger of expanding too fast is to get into water that’s too deep.”
Before opening a foreign office, Yergin suggests doing extensive research. He said tax laws, labor regulations, and language and cultural barriers are serious obstacles to success overseas.
“In other countries, hiring laws aren’t as flexible as they are in the United States,” he said. “You’re really getting married to someone (when you hire them).” He said CERA also relies on employees representing 16 nationalities to provide a global perspective, insights and advice on doing business abroad. “You have to remember that in other cultures, the emphasis is on building relationships,” he said. “Americans just want to discuss business right away.”
Writing best-selling books and frequently appearing in the media continues to attract new clients. Yergin said he’s negotiating with PBS and the BBC to turn “The Commanding Heights” into a public television series. His bestselling book, “The Prize,” was made into a highly rated, eight-part series in 1992 and aired around the world in 1993.
The following fields overflowed: CREDIT = Jane Applegate Los Angeles Times