Deal Radar 2009: Kalypso

Founded in 2004, Kalypso is a management consulting firm that specializes in product innovation. Founders Bill Poston and George Young came together at Deliotte Consulting, where they were partners. The idea for Kalypso was born in a St. Regis hotel room in Houston when Poston and Young were attending the retirement party of a close friend and mentor. His retirement was the catalyst that led them to form Kalypso, which they left Deliotte to start in the wake of the consulting industry turmoil of 2003 on a core principle — to serve clients the way they wanted to be served. The two wanted to build a firm that was unlike traditional consulting firms.

When Poston and Young started, they found that the market had niche competitors that focused on narrow aspects of innovation, strategy, and operations. They also found that although large technology competitors were implementing product lifecycle management (PLM) systems, nobody could combine management consulting with PLM technology implementation expertise. This, Kalypso feels, is its advantage: the firm is a unique combination of services and blend of skills. They feel that there are three elements that allow them to make something innovative happen: first, a mix of services and comprehensive capability; second, their blend of people, as Kalypso is made up of MBAs, engineers, industry practitioners, and consultants with backgrounds from different industries and different walks of life; and third, a strong set of core values and a cultural affinity for hard work on cutting-edge concepts.

The company estimates that total global revenues for management consulting are in excess of $300 billion. Kalypso’s business model is a traditional, privately-held management consulting partnership with a focus on medical devices, consumer packaged goods (CPG), food and beverage, and high tech — especially the semiconductor and communications sectors. The issues that the company solves range from helping companies decide which R&D projects to pursue, to food safety through better traceability, government compliance, and knowing which under-performing products or services to cut.

The company works with Sopheon, PTC, Planisware, and CA Clarity, among others, and and its top 10 accounts are all multi-billion dollar organizations known for innovation. Kalypso did not give out their names but mentioned that its top 10 accounts include a $3 billion consumer products company, a $6 billion semiconductor company, a $14 billion chemicals company, a $43 billion food and beverage company, a $100 billion health care and medical device company.

The founders wanted to maintain ownership of the company and its culture rather than diluting it with VC investors. Its growth has been entirely organic and funded internally through invested partner capital and retained earnings. In 2008, Kalypso’s revenues were more than $5 million, and its revenues had grown 40% over 2007. The company remains profitable, and its revenues have continued to grow in 2009. Kalypso has no intention of expanding the scope of its services but does plan to continue expanding its industry footprint.

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This segment is a part in the series : Deal Radar 2009