Spokane business partners find success in startups

Tyler Lafferty and Nick Murto plan to open Spokane’s first hip-hop yoga and spinning studio later this fall.

These are not generally viewed as a sure bet.

But to the business partners, it’s a chance to change Spokane, to inject some cultural variety into their hometown. They’re not doing this to keep busy. The two already run a pair of digital ad agencies that employ 70 workers.

And they have four other Spokane startups – Method Juice Cafe; Good Oats, an organic oatmeal food distributor; an online photo business called Passenger Pets; and a Web business for matching volunteer professionals with schools or training programs, called Access2Experience.

People who know them say Murto and Lafferty are uncommon entrepreneurs who start new businesses not to make money but because they’re passionate about their ideas.

Dennis Magner, co-owner of Spokane advertising agency Magner Sanborn, regards Lafferty and Murto as key contributors to Spokane’s evolving business culture.

“Part of what makes them successful is they’ve honed their own definition of success and stay true to it – beyond just the idea of making money,” Magner said.

“Instead of an ‘I think we’d make millions opening a juice bar’ mentality, it’s more ‘I’d love to have a better juice bar here. Let’s open a better juice bar,’ ” Magner said.

Lafferty, 38, and Murto, 42, say they recharge by finding appealing ideas elsewhere, like the hip-hop yoga-spinning idea, and transplanting them to their hometown.

Their digital media work takes them to New York, San Francisco and Los Angeles, which is where Murto discovered hip-hop yoga.

Once back home he felt Spokane needed to have that kind of workout, an intense style that mixes stretching with a heavy backbeat. The new business will be called The Union.

“I can only complain about something for so long until I try to do something about it by myself,” Murto said.

Fun on the inside

They get the opportunity to spin out new ideas in large part because their core businesses, Seven2 and 14Four, have been roaring forward and generating steady profits.

The complementary ad agencies share space inside a former architects’ office building in downtown Spokane. Started in 2004, Seven2 does Web design, apps, Web games, digital media and ads for companies like Disney, AT&T, Nickelodeon and Sony.

The sister firm, 14Four, was launched in 2007 to work with other ad agencies instead of directly for clients like Disney.

The partners share company duties, and neither has an official job title. In general, Lafferty focuses more on the financial side while Murto prefers dealing with operations.

The interior of the building has a unique, creative-classy mix of textured walls and open spaces filled with couches and work areas. No cubicles are allowed, to foster workers sharing ideas and interacting.

Murto and Lafferty tend to treat their employees like family, with a focus on friendly games and enthusiasm for work projects.

“We only have one company rule for our people: Do great work for great clients and have fun doing it,” Lafferty said. 

The employees at 14Four and Seven2 usually refer to the partners as Mom and Dad, said Katie Irvin, 29, a former Marine Corps sergeant who’s worked as a graphic designer at Seven2 for the last three years.

Those names reflect the age difference between the owners and their younger workers, many of whom are in their late 20s and early 30s.

The nicknames also reflect the company’s ideal, of being a family environment where people can work and have fun inside and outside the building.

Irvin said the mood is relaxed, supportive and professionally challenging. “It’s been exciting to push boundaries and try new things and get a chance to develop something a little different,” she said.

“I love working here,” she said. “It’s great that we’re allowed to relax and let loose if we need to.”

Like all new Seven2 or 14Four employees, Irvin on her first day of work went to Spokane fitness shoe retailer Fleet Feet to get a free pair of running shoes. Murto and Lafferty, both avid runners and bikers, encourage their workers to keep fit and find a healthy work-life balance; the basement of their building includes a workout area.

Lafferty said, “Nick and I have joked and said we’ve each always wanted to own our own gyms.”

Both partners have families; Murto has two children, and Lafferty has three.

They say their employees and company culture are their biggest business success. “We really feel our employees are creating a fantastically strong culture of loving what they do and feeling excited to come to work every day,” Lafferty said.

Employee appreciation is a major point of emphasis for Murto and Lafferty. Their staff get annual bonuses, and those who reach five years of employment get $5,000. After 10 years, the benefit will be a paid month’s sabbatical. Seven2 has three workers, all hired within a week of each other, who will reach the 10-year mark in 2014.

Quality on the outside

Both Murto and Lafferty say they were influenced by working at WhiteRunkle Associates, a successful Spokane ad firm that was created by Jack White and Bob Runkle. They landed jobs there in the 1990s, becoming early adopters of Web services and seeing the potential for online and mobile advertising. After the Web exploded in the early 2000s, Lafferty and Murto spun off and started Seven2. They refinanced their homes to start the business.

They continue practicing the WhiteRunkle adage that being in a midsize city is not a drawback. “It’s now part of our core beliefs that you can have a company in Spokane that works with great national companies,” Murto said.

Magner, another WhiteRunkle veteran who left in the late 1990s to start his own firm in Spokane, says digital media have transformed the way ad agencies work. “Nick and Tyler’s firm and our firm are not competing with local agencies for Spokane ad work anymore,” Magner said. Agencies now compete for work with companies across the country and around the world, he said.

He’s a big fan of the work of Seven2 and 14Four, and Magner said it’s clear that Lafferty and Murto get inspired to work harder and smarter by pulling off large projects for major clients like AT&T and Netflix.

For a number of years Seven2 has done digital media work for Disney Junior, the division within the Walt Disney Co. that produces cable TV shows and movies for young viewers.

Andrea Hirsekorn, the marketing director for Disney Junior, said she values the unique approach and the personal relationship she has with Seven2.

In the media business, jobs are won or lost on the quality of personal relationships, she said. “We found Nick because he and his firm were referred to us,” she said. “We work with them because they have a unique company culture. They’re genuine.

“When they come to LA, they’ll sometimes take us out for dinner. But you feel it’s not just work for them. You can tell Nick and Tyler’s company culture is about keeping their workers happy and treating clients well,” Hirsekorn said.

Agreeing on ideas

Murto and Lafferty, who admit to having Type A personalities, have a sheet of paper filled with ideas for new companies. As a natural control, they agree that neither partner will push an idea without getting the support of the other.

“Though we’re both extremely confident and driven, we each have the ability to stop and consider the other’s opinion,” Lafferty said.

Those frank discussions often mean the other person will change his idea or abandon it.

“That has served us well over and over again as we consider and planned new business opportunities,” Lafferty said.

Murto said he initially opposed Lafferty’s idea for Access2Experience, the company that is something like Match.com for educators and businesspeople.

But he found Lafferty’s passion for the idea convincing. The kernel for Access2Experience, Lafferty explained, was the need for an online tool that bridges the gap between industry and education. Based on his own experiences speaking to classrooms and working with community groups, Lafferty decided the new idea was timely and a valuable solution.

Eventually, Murto bought in and the idea got the green light. The company is in the beta stage. Lafferty and Murto see the website having national appeal, and they hope to develop it into a series of regional portals.

From time to time the two partners have talked about adding branches in bigger markets. Part of the lure was having a larger pool of skilled workers from which to recruit.

Lafferty said, “We’ve talked about (having offices in other markets) but we’ve found over the years that we’ve been able to service those markets well from Spokane as long as we’re willing to travel and keep cultivating local talent by staying close to the colleges in the area.”