If a downturn seems like a bad time to start a business, talk to Farhan Muhammad and Luna Ahmed. They've made a habit of it, and a successful one at that, launching their second recession-born venture, Edina-based interactive development company Fusion Room, this past January.

Fusion Room specializes in "enterprise interactive" development for creative agencies and clients. It builds on the expertise Muhammad and Ahmed have gained in running ILM, a custom, high-end business application development company that they founded in 2002, in the teeth of "the biggest [information technology] recession that we have ever seen," as Muhammad described it.

If anything, this launch seems easier, with more capital, more experience and a mature company backing the start-up, Muhammad said. Fusion Room, which has 14 employees, will finish the year with projected revenue of $1 million, close to double the company's expectations for 2010.

Conservative estimates put Fusion Room's 2011 revenue at $2.5 million to $3 million, Muhammad said. ILM, which has 38 employees, expects to reach $4.3 million in revenue this year.

On both occasions, launching their companies in a bad economy was no accident.

'Getting rooted'

"It's always risky, obviously," Muhammad said. "Successful people are successful because they take risks. We feel that recessions, not in the middle of the recession but as you start to come out, is a good time for a major business initiative for a lot of really good reasons."

For one, he said, the venture can "get rooted," develop discipline, processes and organization before it gets swamped with work. Hiring good talent, another of those reasons, is easier in such times.

Muhammad and Ahmed left large-scale corporate IT to pursue entrepreneurial goals in launching ILM. Ahmed, who heads operations as managing partner, holds a master's degree in technology from the University of Minnesota's Carlson School of Management. Muhammad, president and CEO, is the chief technologist and leads the development team.

Joining them last year to launch Fusion Room was Carrie Nelson, vice president of strategic alliances, who brings experience from her 21 years at creative agencies in the Twin Cities, including Little & Co. and Space150. Looking beyond the Twin Cities, Nelson is trying to expand Fusion Room's sales to other cities, including Seattle and New York, in addition to seeking work with new and existing ILM clients.

Fusion Room works with agencies and clients to execute the technology behind campaigns but does not do creative or brand strategy work itself. The company name appears to describe its mission, which Nelson referred to as "drawing the link between marketing and IT."

'Serious interactive projects'

Like the timing of its launch, Fusion Room's focus on interactive development was a deliberate choice. Demand for digital development -- for social media, e-commerce and elsewhere on the Web, for smart phone platforms and the mobile Web -- only appears likely to grow.

Fusion Room specializes in what Muhammad called "serious interactive projects," bigger jobs that are critical to business or marketing and branding initiatives and that require strong security, reliability and software engineering discipline. In this way, Fusion Room is an extension of ILM's experience in building large-scale, enterprise-level custom applications for Fortune 500 and larger midsized companies.

Competitors, Muhammad said, tend to lack the maturity and sophistication that Fusion Room brings as a division of ILM, which has been a Microsoft Gold Certified Partner for six consecutive years. Fusion Room is proficient in executing both front- and back-end development and in working in .NET, PHP, mobile, social media and content management applications.

To build name recognition, Fusion Room and ILM in September hosted the Minnesota Developers conference, billed as the largest such gathering in the Midwest with 450 developers attending. This year the conference, which ILM first presented in 2006, expanded to include tracks for interactive applications in addition to its usual focus on Microsoft's .NET development framework.

Jamie Thingelstad -- COO of Minneapolis social commerce developer Alvenda, which creates e-commerce channels on Facebook and other websites -- said he trusted ILM and Fusion Room to provide well-qualified developers.

"There's a big need to source people in the Web layer, the interactive layer, and I've found it harder to find firms that provide that expertise," Thingelstad said. "They [developers] have real world experience, they've developed real apps, they've deployed real things on the Web, and that experience is absolutely critical.''

The expert says

Dileep Rao, the Twin Cities-based author of "Bootstrap to Billions" and a national speaker on building big companies with little capital, said he liked that Muhammad and Ahmed had jumped onto a great trend and that they know it.

"With new technologies and social sites being launched every second, this seems to be a time when someone who can make sense of all of these opportunities and help marketers take advantage should do very well," Rao said. "And they seem to have cut their teeth during tough times, which can only help when they grow.''

Todd Nelson is a freelance writer in Woodbury. His e-mail address is todd_nelson@mac.com.