Howard Stern to Santa
New Rose From Lima
1997, Chris Faulkner lived on a small bed in the corner of his
Denton apartment; the rest of the place was covered in phone
lines, computers, office equipment and mail. Lots of mail. After
all, the 21-year-old was running his own web-hosting business
out of his apartment.
He began the company — housing and maintaining files for web
sites — while he was at UNT studying information science.
Today, CI Host is the fifth-largest web-hosting company in the world,
with 203,000 customers that include McDonald's, GTE and the
U.S. Department of Commerce. It's averaging 40,000 new customers
each month, and its 2003 revenues were more than $45 million.
It all started with Faulkner going from store to store in his Sunday
best making deals with local storeowners.
"At the beginning, I was a one-man show," says Faulkner, now
a millionaire at age 27. "Later on, as business grew, my aunt
would come up after her day job and help with billing — thousands
of invoices and billing statements.
"My landlord really hated all of that mail."
Business was so good and landlord complaints so loud that Faulkner
had to move out of his apartment and into office space in Bedford.
Today, he also has offices in Dallas, Chicago, New York and Los Angeles.
on a whole new level
success is impressive on its own, but in context it's frightening.
While most teen-agers were trying to master their spending money,
Faulkner founded his first major business at age 15.
With a little seed money from his mom, he turned baseball card
collecting into a money-making venture. He'd open up his
1,800-square-foot Colleyville shop in the mornings before school,
leave it in the care of his grandmother, and then return to work
in the evenings and close up.
"It was great. I'd buy cards in bulk at $500 or $600 and sell
them for $1,000 — it was not uncommon to have profit margins
of 300 or 400 percent," he says. "I'd kill for
that kind of markup today."
After a year and a half of good business, he sold the shop to another
entrepreneur for $105,000. Using that money, he created another
company, called Central Amusement, at age 17.
In the early 1990s, before video game platforms like Sony Playstation
and Nintendo Gamecube were popular, Faulkner used his baseball
card money to buy himself arcade games.
"After I'd finish them they'd just sit in my garage
collecting dust," he says. "That's when I got
the idea that other kids would pay to play — I mean, these
machines still took quarters."
Faulkner went from convenience store to convenience store offering
to leave his video games and split the profit from the games 50-50
with the storeowners.
"At first people were a little skeptical — until they started
seeing the money roll in," he adds. "All the store
owners had to do was give up a little space and electricity."
Before long Faulkner's video game machines were all over Waco,
Dallas and Fort Worth and he'd expanded to include vending
machines. Every day after school, he and his grandfather would
climb into an old service van and drive a 300-mile radius, servicing
video games and collecting money.
"That usually took until 9 p.m. and then I'd get home in time
to do my homework — it was pretty intense," Faulkner
says. "But for me, making businesses work has always been the best fun I could have — overcoming
This business lasted until Faulkner went off to college. He sold
Central Amusement for more than $400,000. By this time, it had
become the third-largest vending company in North Texas with
more than 2,400 arcade games and vending machines.
spenders, little steps
With business sense coming to Faulkner so naturally, CI Host's success
today may seem inevitable.
But Faulkner says it wasn't so easy.
During the dot-com boom, there were lots of companies doing what CI Host did.
And those company CEOs were driving nicer, newer cars than Faulkner.
"At the time, my starting salary was $35,000 a year and that was even after the
company earned its first million," he says.
"In '99, I was more than a little jealous of some of the Mercedes our competitors
But CI Host outlasted its competitors. At six years, it's considered a
grandpa among Internet companies, Faulkner says.
"It was like a marathon where so many of our competitors came out guns blazing," he
says. "We proved that slow and steady works."
Most are a little surprised about this kind of philosophy from someone Faulkner's
age. Faulkner, although he is the boss, is one of the youngest employees of CI
Host — only
the interns are younger.
"Fortunately, one of the good things to come from the dot-com boom is that it
made anything possible," he adds. "So I think people are willing
to accept that I might know what I'm doing."
Most of his employees say that after talking with Faulkner for five minutes,
you realize his business acumen is well beyond his years. Job turnover at CI
Host is low — there has been no downsizing or layoffs.
Faulkner says his slow-and-steady attitude comes from seeing that his company
is so much more than his first few businesses with only his grandparents as employees.
180 people work at CI Host.
"In some ways, getting real employees has been the worst change in that there
is such a great responsibility with all those mouths to feed," Faulkner
says. "It's completely different when it's just your grandpa."
But that responsibility doesn't zap all the fun out of business, he says.
a kid at heart
effort to market CI Host, Faulkner hired a human billboard — and
we're not talking about a guy between two sandwich boards.
He hired 22-year-old Jim Nelson to tattoo the company name and
logo on the back of his head for display for a year. Nelson,
who arranged this by putting his head up for auction on e-Bay,
used the money to start his own company.
"I learned early on that getting media coverage and marketing
aren't the same," Faulkner says. "And what
many don't understand is that for less than we'd
spend advertising, we could get free press coverage."
CI Host received coverage of its human billboard stunt in more
than 180 newspapers worldwide and more than 60 radio and 40 TV
stations. For about $7,000 the company got millions in free press.
Along the same lines, Faulkner bought a nice piece of space on
Evander Holyfield's backside — this time it was just
the boxing trunks — during his 1999 championship fight
with Lennox Lewis.
"Most people coming into my company think, 'What the hell
am I getting into?'" Faulkner says. "But after
awhile they realize I'm not your average 27-year-old and
I actually know what I'm doing."