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Techhead's bold new venture [photo of Larry Goldberg & Jim Durbin]


A ROOM FULL OF CUBICLES IS JAMMED with people wearing telephone headsets at computer terminals. The space hums with a quiet bustle as workers confer over cubicle walls about arcane technical issues and squeeze past each other to grab snacks out of vending machines in the hall.

"We have two locations now and we'll be doubling our capacity here by expanding into the space next door," says Jim Durbin, my tour guide. Durbin, vice president and chief technology officer, has 30 years experience in the technology industry and wears a tie. That and his gray hair and trimmed beard are in sharp contrast to the grunge style and body piercings of many of the cubicle inhabitants.

We could be in the work center of a high tech company in Silicon Valley

a place with gleaming walls, built-in networking and basketball courts to provide relief for the digital workers. But we're not. We're in a shabby storefront in downtown Eureka that has been laboriously transformed into a computer center with high-speed Internet connections, an internal network and a complex phone and tracking system.

The amenities for workers are few and the parking is hard to find. Still, this is the headquarters for NetHelp International, a technology startup that has grown to nearly $2 million in sales in just a few years.

The company's president, Larry Goldberg, has been pushing the North Coast toward high tech for many years. His unwavering belief in the high tech revolution has finally led to his current modest success and several other innovative programs that have helped burrow a digital tunnel through the redwood curtain.

Entrepreneurs are often high-energy people who have a tendency to run headlong with their dreams, sometimes leaving others to figure out the realities left behind. Goldberg is no exception. In interviews via both e-mail and in person, his enthusiasm for his projects and goals boiled over into volumes of words that were always forward looking and positive.

"It's not enough to have a vision," Goldberg told me as we talked about his past efforts and his current projects. "You have to have it at the right time and be able to pull it off. I have had some failures and I have learned from my failures."

Among the projects he has "learned from" is something called Municipal Solar Utility that attempted to leverage local government tax credits to make alternative energy solutions affordable for individuals. That concept collapsed when the government tax credits were cancelled. Another project, Northcoast Electronic Town, attempted in 1994 to bring businesses and individuals into a virtual community via a shared Internet site, a precursor to what is all over the Internet now. But N.E.T. withered when not enough people took up residence.

[photo of Goldberg conducting class] Goldberg conducts an internet seminar
for Northcoast Electronic Town in 1994.

"I don't consider that a total failure because we had some very powerful people involved with that project, and it created seeds of ideas that they carried away and made successful."

Goldberg is one of those people known in the industry as an "early adopter," someone eager to use the newest tools.

"I began in computer technology in 1969 in high school in New York and have been using personal computers since 1983," he said. While earning an MBA in small business administration from Humboldt State University, his love of computers led to a job in telecommunications planning and networking for Redwood Community Action Agency in 1982. While there he became involved in issues of overcoming rural isolation and lowering the cost of communications which lead to the development of N.E.T. In 1994 he took a step further with telecommunications and founded Northcoast Internet, the first true internet service provider (ISP) in the region, which he sold in 1996 to Internet Ventures, a company based in Los Angeles that has successfully strung together a chain of smaller ISPs.

With his newest venture, Goldberg said he believes he has come upon an ideal high tech business for the North Coast one that can take advantage of the lower cost of living and doing business here while maintaining a worldwide client base. NetHelp provides technical support for individuals, ISPs and other companies.

One of the dark secrets of the computer industry is the high cost and complexity of support needed to keep users happy and working efficiently. As easy as some of the television commercials make it seem, computers are still not user friendly. Software and hardware are complex, manuals are poorly written and systems have a tendency to break down. If you have ever called a tech support line, whether for a hardware manufacturer, a software maker or an ISP, you know how difficult it can sometimes be to get answers. You know how long you have to wait on hold.

A solution some companies have found is to contract outside, or "outsource," their technical support to specialists. These subcontractors are dedicated to providing quick technical support on a wide variety of software and hardware issues. The company is then relieved of the burden of hiring and training support technicians and from maintaining up-to-date support information on their systems.

Goldberg's NetHelp International (http://www.nethelpnow.com) is one of those support specialists that other companies are beginning to rely on.

[photo of worker at computer terminal] A "NetHelper" at work.

"Just as we were completing the sale transaction for Northcoast Internet, an opportunity presented itself to work with a publicly traded national HelpDesk company located in Dallas, Texas," Goldberg said. The company gave NetHelp a kick-start by giving it a percentage of its support calls from CompUSA, the largest computer retailer in the country. After four months and with 10 employees, NetHelp was handling the entire account and fielding more than 200 calls per day.

Just as opportunity is given, it can easily be taken away, Goldberg learned. After 18 months, CompUSA simply withdrew its account, deciding to handle all its technical support in-house. But this is the age where reinventing yourself or your business every few years has become both an act of survival and renewal.

"We severed our ties with our original partner and went off on our own to rebuild the business almost from scratch. Having lost our single largest customer we had to expand into new markets and FAST," Goldberg explained.

"The natural market which had not been exploited to date was local and regional ISPs which we immediately targeted with trade shows in New York City, San Francisco, San Jose and Baltimore. In the two-year period from November '97 to the present, we rebuilt our business to now where we support approximately 100,000 end-users nationwide. Our revenues have grown by 500 percent in the past year alone and we've added nearly 100 workers during the same period. We plan to maintain a fast-growth pace for the foreseeable future. That's the `Internet way'!"

Also part of the "Internet way" these days is to build a business using venture capital to maintain the fast-paced growth with the assumption of future profits. In the most infamous case, Amazon.com, the company isn't predicting profitability for five years. But Goldberg said he and his investors are close to breaking even and expect the company to be operating consistently in the black sometime this year.

At the moment the focus is on providing technical support for a number of regional ISPs.

"We currently support the largest ISP in New Jersey, the largest ISP in Kansas and several large and rapidly growing services in the Pacific Northwest, Southeastern U.S. and upstate New York," Goldberg said. For these kinds of companies NetHelp provides 24-hour on-call technical support backed by databases of technical information or "knowledge bases."

"To the end-user (the caller), NetHelp doesn't exist. Our agents ARE the company they represent on the phone."

Goldberg believes NetHelp will survive and even thrive in an industry that moves at lightning speed and leaves slow movers in the dust.

"NetHelp has created a niche for itself by virtue of being an early player in the field. The field of contracting out technical support and customer service is becoming a huge industry at this time and with the explosion of e-commerce is now a vital part of most online businesses.

"We hope to be able to provide the first truly personal, independent support services by whatever technical means the end-user is comfortable with whether it's talking on the phone, making a `virtual housecall' (diagnosing and repairing computer problems through an Internet connection), talking via the web, videoconferencing, e-mail or other means of communication."

Goldberg said that so far, he has been pleased with his ability to find competent "knowledge workers" in this area. Even so, the job requires considerable training to become familiar with the system and how to efficiently mine the databases. Besides the location in Eureka, the company has a facility in Crescent City's Technology Center where it has been able to develop a training program with support from the Economic Development Department of Del Norte County. The operation has reduced the welfare-to-work population by 5 percent through this program.

The company has also been in discussions with HSU and College of the Redwoods to develop training programs that would help supply NetHelp and other local companies with a steady stream of qualified workers.

"As our work load grows and the market develops for more workers, we will begin more aggressive recruitment and employee development programs," Goldberg said. Currently, entry level positions pay $6.50 an hour and the average wages run around $8 an hour.

Steve Suttrell, loan officer for the Redwood Region Economic Development Commission, thinks Goldberg is in the right place at the right time.

"Sun Microsystems has 2,500 jobs available and unfilled right now," Suttrell said. They are entry level, a step up from "hamburger flipper," he admits, but the existence of such jobs in a region may encourage other high tech companies to consider the area.

"I think Larry's absolutely on to something," Suttrell said. "There are Silicon Valleys now in Boise, Idaho, and North Carolina. (Workers) can't afford to live any more in the real Silicon Valley."

Aggressive growth has become a tradition with high tech companies and, Goldberg said, "If business continues as planned, we plan to double in size within the next six months."

Still, to survive NetHelp faces a number of challenges. The company needs to find funding to expand its facilities and its workforce to be able to handle larger, national contracts and to develop new services that will continue to move NetHelp into a unique positioning in a highly competitive market. In the process, Goldberg has begun to run up against the conundrum of building a company on the North Coast: While the cost of doing business (average wages, rental rates) is lower here compared to urban areas, the lower economic base means less capital either from private investors or government incentives. Additionally, the pool of technically adept people is shallow.

While Goldberg has been able to raise some seed money locally, he has been travelling lately outside the county to meet with investors "who have the vision and the capital" that he needs.

"I am forced to travel to San Francisco, New York, Florida and Los Angeles to meet with investors to raise the kind of money necessary to really launch a company such as NetHelp. Unfortunately, investors in those communities could care less about Humboldt County or how many jobs we create in a rural area such as this. They only care about the bottom line and whether it's cheaper to do the work in Idaho or North Dakota or Florida."

Eventually, Goldberg said NetHelp may need to relocate if the company's growth outstrips the economic and labor base, although he hopes that doesn't happen.

[photo of Larry Goldberg with laptop computer] Larry Goldberg  

"It's a clean industry, employing a lot of people, utilizing knowledge skills provided by local educational institutions, working 24 hours a day, providing flexible working conditions, no dress code, open to virtually any age worker and best of all, it doesn't rely on the local economy. In fact, 100 percent of NetHelp's income is from outside the community we work in.

"We contribute over $1 million per year in payroll to the local communities today and that is the best kind of business one which contributes payroll and doesn't export profits or costs of goods sold."

Additionally, like other high tech and Internet-related industries the company does not rely on the depletion of natural resources and is supported by the existing Pacific Bell infrastructure. It does not rely on a new improved port or railroad, something Goldberg kept reminding business and government officials recently in the struggle over what to do with the $24 million coming from the sale of Headwaters.

Ironically, these advantages are the very things that make the business portable.

"We want to stay here, but the truth is we could pull out and move this company anywhere.

"It's incredibly important for economic development activities to focus on developing venture capital for businesses such as this and not just loans," he said.

Additionally, the local labor force needs to be retrained to become more technically competent.

"Although local educational institutions provide some basic training programs, compared to the skills levels of other areas, we're still far behind the times."

So why does he stay?

"I love this area. I grew up in New York City where there were 7 million people living in two square miles. We have a family compound in Trinidad where I don't see a neighbor. I go for a walk on the beach with my son before I go to work every day. My dream is to have a deck built on to my roof with a high-speed Internet connection and spend the day there telecommuting in to NetHelp's various physical locations."

Goldberg believes the region could take advantage of its beauty and quality-of-life factors to entice other high tech businesses to relocate with investment and incentives.

In fact, an article in the November American Demographic Magazine cites a study by David McGranahan, an economist for the U.S. Department of Agriculture, in which Humboldt County ranked No. 1 among 2,260 non-metro counties studied in terms of "natural amenities." Del Norte County was not far behind at No. 3. The study coincides with a Census Bureau report that indicates a trend over the last decade of a reversal of the century-old urban migration.

But great natural amenities do not necessarily translate into population or job growth. That's why Goldberg continues to lobby for Headwaters money and other public funds. He wants to see a pool of investment money created for entrepreneurs like himself. Additionally, he would like to see the development of a regional technology center.

"I would like to see a campus-like architecture much like one sees in the Silicon Valley where a large facility can house several high-tech businesses under one roof and provide high bandwidth access, a shared technical library, attractive and useful worker amenities such as a gym, cafeteria, child care services and other features common to a technology-based business.

"We could attract numerous other companies to the area that could benefit from this service and create a kind of synergy where companies can interact and assist each other."

Goldberg said that compared to the cost of dredging Humboldt Bay, upgrading the port and rebuilding the railroad, the costs for such projects are small and the benefits will be far greater in the long run.

In the meantime, Goldberg has other challenges immediately ahead. He said he needs to continue the search for additional clients for his company's services, find and train more employees, keep looking for investment capital and ultimately prove that his current venture has what it takes to make the transition from a startup in a patched-together storefront into a solid company with a long-term future.

Writer Robert Morse got his own start in high tech in 1994 working for Goldberg at Northcoast Internet where he built and maintained Redwood Country Online, an informational source and commercial web hosting service. He has written articles and reviews for computer magazines, newspapers and cultural journals. He is director of web development for Internet Ventures Inc., the parent company for Northcoast Internet, where he oversees HumGuide (http:///www.humguide.com), a web resource for Humboldt County.

Comments? E-mail the Journal: ncjour@northcoast.com

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