Onthejob training as an Internet entrepreneur

March 21, 2011
| By Pete Daly |
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Unlike some kids, Aaron Schaap wasn’t that excited about monkeying around on computers as a teenager. In retrospect, that seems rather odd, seeing as how the 30-year-old Holland resident has launched several companies directly involved with Internet technology.

“I was way more interested in playing sports and skating than I was about being on the computer — though, over time, you kind of just start picking it up and doing some things, and the next thing you know, you’re starting companies around them,” said Schaap.

Schaap presently heads four of the companies he has launched: Elevator Up at 201 W. Washington St. in Zeeland; Canvas; Downstream, which operates out of Elevator Up; and The Factory in Grand Rapids.

Schaap was home-schooled for his high school education. His mother is a teacher and his father is an adjunct college professor. The Schaap family was active in a large church that had a youth group with about 500 members, so Schaap said he never lacked for social contact with other kids his age. During his senior year, he said, it seemed as if he attended every high school prom in the area.

Schaap was an accomplished in-line skater during his teenage years — so much so that skate makers such as Salomon and K2 sponsored him, paying his expenses to compete throughout West Michigan and in Chicago.

His first employment began while he was still in high school. Since he was being home-schooled, he was able to complete his classes and schoolwork during the morning, leaving him time in the afternoon to find a job — which he did, as Greenridge Realty’s IT guy.

After high school, Schaap decided against college — not because he is anti-education but because “it would take too much time,” he said. “I decided not to go to college and I started a company instead,” he said. “It was easier to apply for an LLC than it was for financial aid,” added Schaap.

Aaron Schaap
Title: Founder/CEO
Age: 30
Birthplace: Crown Point, Ind.
Residence: Holland
Family: Wife, Jodi; daughter, Jessica, 6; and son, Oliver, 2.
Business/Community Organizations: CONGA West Michigan and Startup West Michigan; board member, Disher Design & Development.
Biggest Career Break: Being asked to join The Image Group advertising agency in Holland.

That was in early 1999, and the company was called Mandarax Web LLC. Mandarax did “a lot of web development,” said Schaap. After a little more than a year, Schaap sold it to his partners in the business.

Schaap became a web developer for the Holland Sentinel newspaper and worked there from 2002 to 2004. He also got married during that period, and his wife, Jodi, later would give him some valuable advice when he was offered a job by The Image Group, a Holland advertising agency that became the breakthrough in Schaap’s career.

In 2004, while still working for the Holland Sentinel, he had started Elevator Up and was “doing a lot of websites” on the side, but they were generally low-budget projects, he said — mostly in the $2,000 price range. “I didn’t know how to do a lot of large things yet. I was still pretty young.”

Jodi became pregnant in their first year of marriage. Then, The Image Group asked him to join the company. He said he was interested in working for them on a contract basis but not as an employee: He still wanted time to do his own thing.

“One of the things that my wife said was, ‘You know, you never went to college, never had any formal training. Image Group might be your college.’”

She emphasized that he would be working with people who had been around for a while — who had a lot of experience and could teach him things.

So Schaap made the decision to join The Image Group, and he did learn a great deal, he said. He went from doing web design projects costing a few thousand dollars to some costing a half million dollars or more. That was a new level of doing business, and Schaap was immersed in it for two and a half years.

Meanwhile, he was still running Elevator Up and another company called Canvas, which he had started the same year as Elevator Up, in 2004.

“We manage the cloud,” is how Schaap sums up what Canvas does. It is a web-hosting company that manages websites for larger organizations across the country, mainly universities and hospitals.

Canvas began almost by accident. There was another company in the Holland area that was hosting websites but decided to get out of the business. Schaap, who was running Elevator Up by himself, asked them if he could take on some of those clients if he got a server, and they agreed.

“So in a long weekend, I figured out how to get a server and set it all up to do web hosting, and then we wrote a contract, and about a third of the customers moved over and stayed on our servers,” he said. From that point on, Aaron Schaap was no longer a one-man operation.

At first, Canvas rented a server located off-premises, but now Canvas owns its own servers and other infrastructure. Schaap guesses that he has hundreds of thousands of dollars invested in that equipment. While the equipment was originally in Holland, about two years ago the servers were relocated to Chicago. Holland just did not have the infrastructure to support his business required.

“We couldn’t get enough bandwidth and couldn’t get enough power,” said Schaap.

Now the Canvas staff will occasionally go to Chicago “to install a new server or do some more stuff,” but for the most part, they run it remotely from Holland.

Schaap launched three more companies in 2009. One, called Downstream, is in familiar territory: the Internet.

Downstream, said Schaap, is software that he and his team developed to search the Internet and capture all of a client’s data that is out there in “the cloud” — everything that’s been put online via e-mail, Google, LinkedIn, Twitter or Facebook. “We actually have software that will go grab it, back it up and deliver it to you in a variety of ways,” he said.

He said Downstream serves as a sort of “disaster recovery” system for anything that was on the Internet but then was lost by the owner. If someone e-mails a photo and then later accidentally deletes it, Downstream will find it and return it. “One of the primary reasons for data loss is individuals accidentally deleting their own information,” said Schaap.

Say a company posts its contacts on a commercial customer relations management website, but then the website server goes down. With Downstream, the contacts data can be recovered from the “cloud.” Right now most of Downstream’s 3,000 clients are individuals — most of whom live in Japan — but Schaap has a goal of landing corporate clients.

Downstream and another company Schaap was involved with — Public Collections LLC — came out of his participation with Momentum, a West Michigan “seed stage funding and incubation program” for new small businesses, according to a  news release from Momentum. The company, led by Rick DeVos, was launched in Zeeland in January 2009 by the Lakeshore Advantage economic development agency with a group of West Michigan investors, including The Windquest Group.

The basic premise of Public Collections, according to its webpage, was to help its clients (small business, freelancers and independent contractors) put pressure on other companies that owed them money by publicly identifying them on its website. The amounts owed would be too high for small claims court action but not large enough to justify hiring a collection agency, said Schaap.

However, Public Collections “didn’t really go far,” according to Schaap. He noted he had two other companies going at the same time, and Downstream was “starting to pick up a lot more traction,” with investors interested in it.

Schaap’s third new venture in 2009, The Factory, is a new twist on office space for lease — and an entirely new type of venture for Schaap. It’s an open “co-working space” of about 2,000 square feet at 38 W. Fulton St. in Grand Rapids. It is akin to a time-share for tech entrepreneurs who occasionally need a place to set up their laptop and work. About 40 people lease space there, some on very short terms and others for longer commitments.

The funding to open The Factory came from Elevator Up, said Schaap, but he also partnered with Turnstone, a division of Steelcase, which provided the furniture. The space is ideal for freelance software developers, he said, because they benefit greatly from spontaneous collaboration with others in their profession.

It’s in need of more tenants, however, which is why The Factory recently began offering ShareHolder, in which anyone can lease space — priced by the one-inch-square — on one of The Factory’s walls to use for advertising — or whatever. It is hoped ShareHolder will bring more traffic into The Factory and help increase revenues.

Schaap also has played a founder’s role in two online organizations: Startup West Michigan (www.startupwmi.com) and CONGA (conga-wm.org). Schaap said there is a lot of “overlap” of events in West Michigan involving web technology people and entrepreneurial organizations. CONGA attempts to organize these groups so that events don’t end up competing against each other for the same time. Startup West Michigan supports entrepreneurial events and organizations.

Schaap said much of the money his various companies make is invested back into creating new companies.

Anymore, Schaap said, he only finds time to skate once or twice a year.

“I work all the time, and when I’m not working, I’m hanging out with my two kids,” he said. He and Jodi have a daughter, Jessica, who is 6, and a 2-year-old son named Oliver.

But Schaap said he does have a hobby.

“My hobby right now is setting up new events or starting up side companies or things like that,” he said. “I love empowering other people, and I love creating things that bring people together.”

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