PROBLEMS — Eclectic Crew Starts a Web Site for Folks With Troubles

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Seated on a couch in his Sherman Oaks office on a recent morning, Henry Dahut talked about the genesis of his Internet startup GotTrouble.com as his three-man documentary crew recorded the event for prosperity’s sake.

The Web site will revolutionize the way people tackle personal problems, he said, allowing them to get just the right help for a particular problem be it in the areas of law, love or health without the usual search-engine clutter.

“We’re providing a calm environment for people in trouble,” explained Dahut, as the soundman lofted a boom over his head and the cameraman moved in for a close-up.

Dahut hired the documentary crew to witness the birth of what he sees as an eventual Internet powerhouse. And like any proud parent, he wants his company’s early years captured on videotape.

GotTrouble.com, like all Internet startups, faces significant hurdles as it tries to build a national brand while competing to some extent with Internet search engines as well as with the yellow pages.

One Internet analyst went so far as to say the company’s business model is doomed to failure, but Dahut believes it will succeed. The attorney is so convinced, he sold his Mercedes and mortgaged his house to plow $850,000 of his own money into the startup. The company has yet to attract a nickel from outside investors, but Dahut expresses confidence that venture capital funding is right around the corner, and an initial public stock offering is only a year away.

“You know something, I’ve never slept better at night,” he said. “When you’re truly committed, there is no room for failure.”

Unlike a typical search engine, GotTrouble.com is an “event engine,” said Dahut. Users simply choose the particular problem, or event, they face from a drop-down menu, and they receive a list of providers of goods and services who might help. The company derives its revenue by charging sponsors insurance companies, law firms, family counselors, bail bondsmen, money lenders, employment agencies and others a monthly fee to make the referral list.

Serious doubts

Lisa Allen, an analyst with Forrester Research in Cambridge, Mass., said Dahut’s confidence may be misplaced.

While she had never heard of GotTrouble.com and had never seen the site, she doesn’t give the company much chance of success.

“This is another dot-com idea doomed to failure for a couple of reasons,” she said.

Internet companies must cater to a very specific niche to succeed, and Allen doesn’t see having a problem as a narrow enough interest to draw consumers to the site. Additionally, the business is built around an advertising model, which hasn’t proven effective over the Internet. “And trying to build this out nationally across a variety of services in all municipalities is a terrifically big task,” she concluded.

If the business model doesn’t work, Dahut counters, why is his company closing in on profitability? He argues that the site does indeed serve a well-defined niche by targeting people facing specific problems.

“No one has ever used an event as a definable market,” he said. “That’s never been done before. That really is revolutionary.”

While conceding that building a national base is a big job, Dahut said the task is do-able if the company targets the 3,000-odd counties in the United States rather than attempting to go after each city.

As president of GotTrouble.com, Dahut runs herd over an eclectic group of employees, 15 souls who run the gamut in appearance from the straight-laced to the tattooed and pierced.

He encourages his workers to make collages that express their personal goals. The results are on display under glass on top of the conference table.

Meanwhile, the documentary crew, which moves around capturing the joys and tribulations of the employees, gives the Riverside Drive startup the feel of a reality-based TV show.

A career change

Dahut practiced criminal and civil law for 13 years, but realized he had lost his passion for the game. He took three years off to find himself, a journey that took him initially to film school in New York and later back to L.A. eight months ago to start a Web-based referral service for attorneys called DefensePros.com.

He realized people in trouble are starved for information, and predisposed to make a buying decision. However, most people simply aren’t sure where to turn. “The light bulb went on for me,” he said.

Dahut came up with the idea for GotTrouble.com and decided to meld DefensePros into the new site. That gave him the legal component for GotTrouble.com, and now he’s working on adding services for people who have health and love problems.

For example, someone facing marital problems could click on “family” for a list of counselors to shore-up a shaky marriage, or find an attorney to help dissolve a marriage that’s over. Those facing a divorce also might need a moving company, a storage locker, an apartment guide or maybe even a short-term loan.

Similarly, someone facing drunken driving charges might need a bail bondsman, a new insurance provider or perhaps drug and alcohol treatment.

“It looks at the event and anticipates the goods and services that are needed,” said Dahut.

A typical search engine, on the other hand, is so broad that it leaves users with an overwhelming list of thousands of Web sites to sort through.

Founder’s numbers

GotTrouble.com formally launched July 5, but thanks to the foundation provided by DefensePros, the company is already generating revenues of $186,000 a month, Dahut claims, adding that GotTrouble.com is on target to start generating positive cash flow in September.

The company has 286 advertisers in 500 U.S. cities paying between $250 and $300 a month to be included on the site, Dahut says. GotTrouble.com also helps some companies build their Web sites and then maintains each site for $99 a month.

Dahut concedes that GotTrouble.com is a work in progress. A visit to www.gottrouble.com confirms that many pages are incomplete, with banners declaring “Your Name Here” where ads are slated to go. But the company recently began adding links to each page so users will find the resources they need as the company builds its advertising base.

The company plans to launch a $250,000 branding campaign within the next two months in Los Angeles as a precursor to a national campaign. The effort will consist primarily of radio spots, but there will also be some print ads and late-night cable TV spots.

Dahut concedes it will take more capital than he can muster to kick off a national ad campaign, but the company is in talks with venture capitalists for an assist. He declined to identify any of those potential backers.

As part of his marketing effort, Dahut has already spent $250,000 of his own money to buy advertising space from the major search engines such as Yahoo and Excite@Home. When someone types in words such as DUI, divorce or bail bonds, banner ads for GotTrouble.com appear.

Daniel Jaffe, an attorney in Bellevue Wash., said that’s how he found out about Dahut’s service. He was looking for a way to promote his own Web site and started typing in key words that people in trouble might use.

“They (GotTrouble) would pop up a lot more than other lawyers’ banner ads,” he said.

As soon as his ad went in, Jaffe said he saw a noticeable increase in business. And unlike his yellow pages ad, people who came to him over the Internet seemed more prepared to hire him.

“I think the Internet is going to be sink or swim for most attorneys,” said Jaffe, who has been practicing for just two years. “It’s already a great equalizer. It has allowed me to build my practice at a rate I didn’t think was possible.”

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