I first met Saltmine co-founder and CEO Jay Jarmon in the summer of 1995, an eon ago in Web time. Meeting inside his then Seattle garden apartment, Jay was a blur, simultaneously showing me a website he’d created on a speedy 28.8 modem, attempting to locate his art director (and current COO) Ben Thompson on the phone, and getting ready to play a gig that night in Olympia with his rock-and-roll band. Meanwhile another band of Jay’s, this one a group of software programmers, was unpacking manuals in a new office Jay and Ben were opening called Saltmine Creative.
That summer Microsoft showcased a whole new operating system called Windows 95, and Saltmine was one of the few early-look companies on the “need to know” list. Jay had previously completed a tour of duty as a member of Microsoft’s International Products Group where he did everything from editing to production management and marketing work. Eager to get in on the ground floor of the Internet boom, Jay felt confident that Microsoft would come aboard his new firm as a ground floor tenant. In fact, until Saltmine Creative landed the BP Amoco account, Microsoft was both a tenant and a blast furnace, driving Saltmine Creative’s continued growth. Today Saltmine has offices in Seattle, Bellevue, Chicago and the United Kingdom.
Meridian Partners, formerly MPL2.COM, grew up serving our bustling high-tech region as a leading employment and project-management force before merging with Saltmine earlier this year to form Saltmine LLC. The union has created what is today the largest web-development firm in the region, 450-people-strong.
The beehive of activity at Saltmine’s downtown corporate headquarters fans out across the entire third floor (and part of the 4th) of what used to be the Nordstrom flagship store. It has since been freshly renovated and plumbed with high-bandwidth cable — Saltmine owns a jumbo T-3 connection.
We sat down with Jay and Creative Director, Davey Jolosky, over lunch at Adaggio, just across Westlake Center Plaza, for a hearty chat about Seattle’s numero uno web-development enterprise. –LS
Seattle24x7: Jay, tell us about your roots in the Puget Sound.
Jarmon: I’m originally from Tacoma (which is also where I commute to work from via the new Sounder light-rail train), and a graduate of the University of the Puget Sound in English. Got a graduate degree, also in English, from the University of Washington. After a term at FreeRange Media, I went to work at Microsoft as a production editor in the old International Products Group. I had a strong feeling about getting started on Internet work, so I left to start Saltmine in 1995 with Ben Thompson, who is our COO and Pete Gerrald, our CTO. Ben, Pete and I first met around our musical interests as performer, designer and studio engineer, respectively.
Seattle24x7: How did you first capitalize the company?
Jarmon: I was by no means a Microsoft millionaire when I left. In fact, Pete and Ben and I each put a $500 investment into the company and that was my last $500. This isn’t your traditional story of a company being rolled-up by a consolidator and a lot of VC money. We made money the old-fashioned way, on the margin, and then grew it. Not the fastest route, but a good way to grow organically. Looking back, you can see the body count of the roll-ups who went IPO too soon, who didn’t have the infrastructure or the background to do it.
Seattle24x7: As the head of the largest shop in Seattle, you must have been a prime acquisition target on the minds of many national firms.
Jarmon: During the pre-IPO heyday, we were a target for acquisition by all the major players: IXL, Luminant, Razorfish, and it always kept coming down to the same point for us – what sort of sustainability did these companies have? Are they in fact companies that you would see in four or five years, or are they just a kind of Ponzi game that is being put together to work for a few key investors. We had the naive notion that a company ought to make money. That was a notion that was joked at. The Wall Street bankers would tell us, ‘no, no, we should talk about the equities market.’ And I’d say, I understand where you’re going. Let’s talk about the markets for goods and services.
Seattle24x7: Any regrets about not taking the get-rich-quick exit?
Jarmon: For all the times you may think about kicking yourself, you have to keep it all in perspective. We’re a company that’s going to do $50 million this year in revenue, we’re profitable and we’re going forward, and that’s the company I’d personally prefer to be in.
Seattle24x7: Of course, we have to ask about the name…
Jarmon: The old name of the company was Saltmine Creative which evokes, for us, hard work and creative at the same time. There’s also an old term from the IBM days, a saltmine was a collection of developers who’d sit around a room writing code all night. Then there’s the fact that I’ve always wanted to tell my wife, “I’m off to the saltmines, honey.” The other inspiration was from a writer named Kevin Rexroat who worked for me at Microsoft. Kevin wrote a short story where the main character worked in a multimedia company called The Salt Mine. I’ve always liked the name. The same writer has been with us for five years.
Seattle24x7: Besides Microsoft, another cornerstone client was British Petroleum?
Jarmon: We built the first British Petroleum website in October 1995, and I was the original project manager on it. The eight-hour time difference was rather trying. We never got to see the faces of the people we worked with in London and built the entire thing remotely. By 1997, we began to see that BP needed a level of geographic proximity. I remember the meeting when they got me to say, “We’ll have an office in London going in 90 days.”
Talk about a learning curve. I immediately got very good at understanding permits and real estate in London. My god, I’m from Tacoma, Wash., and I’m looking at contracts about “Acts of God” that date back to these feudal, land-holding leases in London. They have conditions like tempests and plagues and the leases can last 125 years. Within 100 days, we had the operation running in London. We started in a service house in Trafalgar Square in January 1998, and this year we’ll produce $5-$6 million U.S. dollars there. It’s a growing operation for us; 35 people, three or four are American. Eric Johnson, who also worked at FreeRange Media as a business-development manager, is the managing director in London.
Seattle24x7: A lot of people think that Saltmine does mainly front-end work (website development, design). Is that right?
Jarmon: Actually, we’re more of a back-end shop [software development, programming, operations consulting, etc.] and increasingly, we’re placing a lot of emphasis on consulting, and particularly strategic and business consulting, like a McKinsey or a Bain. Our preferred approach is to meet with the CEOs and the decision-makers within a company and help layout how they do their business online, how they might model their online business. Then we execute that vision. Most often, it’s a question of converting an existing brick-and-mortar company into an online operation that works.
They’ll ask us to help them determine how to structure the online business. But you can’t really have an understanding of the properties you’re going to put online without understanding the implications that are further upstream. Increasingly, as we move forward, we can help set the expectations and the rationale for how a system ought to be developed.
A great example is the old Microsoft jobs site, where the interdependencies between the different people who needed to look at resume and HR materials were so involved that it really required a business analysis to evaluate what the needs really were. We said, ‘Let’s talk about the different projects – not just the single project that may come forth from this.’ Then we’ll go through the usual software-development process, defining and documenting everything, and building the system. It’s not just about being on the building end anymore; it’s being on the planning end.
Seattle24x7: So Saltmine will define the needs and the solutions of the digital business first and foremost?
Jarmon: There is a digital implication for every business. Of course, I realize that there’s a huge turnaround that has to happen in corporate America, to this day, to reoriented ourselves that way. Saltmine’s vision is to answer how do we help you as a company orient yourself, so that an online solution works for you? We can’t just craft an online solution. You really have to be there at an earlier phase to help define what that solution will be.
Seattle24x7: What are your favorite websites?
Jarmon: The first site that I really felt strongly about was the Fedex site, back in ’94/’95. That was one of the very first sites I remember being truly useful. It wasn’t just a question of, ‘Oh, here’s a pretty Website,’ but ‘Where’s my damn shipment!’ ‘Who’s the last person who touched it?’ For me, the sites that are useful and have information up are the two kinds of sites I love.
On a day to day basis, I’m always at MSNBC and Amazon.com and all the retailers on the Web. I’ve bought stuff on eBay, just like a lot of people have. All these things are interesting, exciting uses of the Internet.
But if you asked me what my favorite site is, I’d have to say, The Onion simply because it’s some of the best content on the Web. Content is king in the end. You have to have a reason to come back to a website. And for the Onion, which I always have loved, here’s something that has original content that is cycling at a particular rate. I can count on it for entertainment.
Seattle24x7: Content is king. But why have so few content sites been successful in creating new brands? The few exceptions being The Onion, The Motley Fool, The Street and a handful of others.
Jarmon: The problem is that to fund a business, the only model that’s been suggested is an advertising based model, which ultimately might be fine, but this is an industry in its infancy. The initial impulse is that this is a liberating medium for content. It is – there’s no question about it, but there’s some sobering business realities in a new industry which hit people.
Seattle24x7: It’s still too early then?
Jarmon: We’ll look back on this period like it’s the magic lantern show in a few years. My hope is that I can tell my son someday that your dad was involved in this part of the industry back when it was like the old black-and-white movies, silent movies and magic lantern shows.
Six years ago how many people were even thinking about how a network of computer systems would provide content or an economy. Now it’s like, well, it’s not quite big enough for our expectations, I mean that’s a huge change.
Larry Sivitz is managing editor at Seattle24x7.com.
Next: Jay raps about the Seattle music scene, the many Seattle musicians (past and present) who work at Saltmine, the fate of Napster, and the road ahead. Then Saltmine Chief Creative Officer, Davey Jolosky, fills us in on the creative and design philosophy that is guiding the company’s award-winning efforts.
413 Pine Street
Seattle, WA 98101
On-Site Technical Services
10900 NE 8th Street
Bellevue, WA 98004
Year founded: 1995
Number of employees: 450
Amount of VC funding: $5M+ to MPL2 in 1995
Major clients: BP Amoco, Microsoft, AT&T, Frank Russell Company, PGA Tour, Muzak, Nordstrom, Puget Sound Energy, Washington Mutual, Wizards of the Coast