When Karen Murphy O’Brien and Brett O’Brien started a public relations firm inside their Culver City apartment, it didn’t take long for the entrepreneurs to question whether their business would survive. They had one hotel client and were having trouble getting a second. That was 25 years ago.

Now, West L.A.’s Murphy O’Brien is a powerhouse in the travel, lifestyle and real estate world of PR and has more than 70 clients. The firm is ranked No. 4 on the Business Journal’s list of public relations firms.

And now it’s planning to launch a digital division called MO Digital PR, as some other prominent L.A. firms have done.

Brett O’Brien is something of a tech expert: In 2010, he co-founded Viddy Inc., a video-sharing social network company in Venice now called Supernova.

The Murphy O’Brien firm already handles social media such as Twitter and Facebook for its clients.

But having a dedicated team for digital gives the firm added opportunities to get its clients’ names in the media, Karen Murphy O’Brien said. So, for example, if the agency can’t convince a magazine to write an article for its print publication, maybe it can get the magazine to publish an article online.

“You can get very creative instantaneously now,” she said.

The firm takes a monthly retainer from its clients, but, she added, the separate division will give existing and new clients an opportunity to contract only for digital services. For example, a client might only want the firm’s digital services, and could pay different rates.

As such, Brett O’Brien said technology is helping the company grow.

“There’s nothing wrong with being a boutique agency,” he said. “But we can provide so much more.”

Modest beginnings

He looks back fondly as he recalls the learning curve.

“Starting out, almost every day was a challenge, truthfully,” he said. “You get beaten up as an entrepreneur. There’s a lot of rejection. There are tough days and there’s unexpected losses. But we’d wake up the next morning all fired up like something good is going to happen.”

In the last 10 years, the firm’s staff size has more than doubled to 52. The company said revenues are at an estimated 9 million and it recently moved into a larger office in the Olympic Boulevard high-rise headquarters of Stewart and Linda Resnick’s Roll Global.

Clients include the Hong Kong-headquartered Peninsula Hotels chain; the Waldorf-Astoria hotel in Park City, Utah; Calabasas-based restaurant chain Cheesecake Factory; and Palmetto Bluff, a resort community in Bluffton, S.C.

The firm specializes in luxury hotels and resorts but diversified its business to include restaurant and real estate groups as they helped provide an additional safety net.

Brett O’Brien, the firm’s managing director, said they started with travel- and tourism-related clients but world events hit their

business. For example, clients with hotels in China were negatively impacted by the severe acute respiratory syndrome outbreak due to fewer travelers and that also affected the

company, said Karen Murphy O’Brien, chief executive. Karen Murphy and Brett O’Brien were neighbors in their early 20s and dating when they started the firm in 1989.

He had recently graduated from the University of Pennsylvania’s Wharton School in Philadelphia; she was serving as senior vice president of former L.A. entertainment public relations firm Mahoney/ Wasserman.

She said she never considered starting her own firm until he talked to her about it.

“If I hadn’t met him, I don’t know,” she said. “Dealing with 401(k)s and all of the operations – I always said I don’t really like to balance my checkbook. I don’t think one person is good at everything and I know what my expertise is and I know what it’s not.”

They went through several hurdles, particularly in meetings with potential clients who would immediately ask about their client list when they only had one.

They expanded services from hotels and restaurants to real estate in 2003 after noticing hotels dabbling in the real estate market by selling fractional ownerships or villas. But their business suffered in 2008 when Lehman Bros. Holdings Inc. “just disappeared in the middle of the night” said Karen Murphy O’Brien. Lehman had owned the Ritz-Carlton Rancho Mirage, one of its clients. She said they started focusing on their other specialty industries, travel and lifestyle.

“They dovetail nicely,” she said. “They may not all be hit at the same time. With the recession, it hit the real estate market.”

Diversification is a good concept, said Mark Paolucci, president of real estate marketing firm Paolucci Communication Arts in Palos Verdes Estates, who also had to diversify his business. But the challenge is in the execution.

“There’s different disciplines and different approaches that you need to take,” Paolucci said. “How you approach real estate and hotel and resort is a different discipline and certainly digital is a whole other animal.”