Outsourcing: Josh Lieberman, Co-Founder of KMS Technology, Atlanta and Ho Chi Minh City (Part 1)

Founded in 2009, KMS Technology partners with clients that range from startups to Fortune 500 companies to provide software development services such as research and development, product innovation and management, application management, testing, support, professional services, and staff augmentation.

Sramana Mitra: Hi, Josh. Let’s start with some background about you and KMS Technology.

Josh Lieberman: I’ll start with the company that we had prior KMS because I think a lot of our history leads into how we formed KMS to be what it is today. Trade relations with Vietnam opened up in 2005. My partner, Vu Lam, is in Vietnam as we speak. He and I are partners in KMS. Vu started a company with a couple of friends called Paragon Solutions. Their mission with Paragon Solutions was to develop the outsourcing model in Vietnam, not just India. So, Vu moved to Vietnam, started an offshore development center in conjunction with the university over there. He and his friends bootstrapped Paragon Solutions.

A few years after that, they brought on some capital funding. In 1999, as the dot-com bubble was still expanding, a new management team was brought on by the VCs, and I was one of those people brought in to upgrade the business. The bubble burst. We fought through the years, and Vu and I were part of the management team and worked together on that. We turned that company around, made it cash flow positive, sold it to First Consulting Group, which was a health care consulting firm. And then FCG sold to CSC.

With all of the funding from those companies, we built Paragon Solutions to be about a $30 million business. We have 600 people in Bangalore, India, and 600 people in Ho Chi Minh City, Vietnam, and about 50 people here in the United States. Vu and I didn’t want to be part of a big company, so in 2009, he called me and said, “Hey, do you want to make another run at this ourselves?” We bootstrapped KMS at the beginning of 2009. He began in January. I joined him in October.

When we started KMS, our plan was to build a successful outsourcing business. We also wanted to leverage the engine that we’d built in Vietnam to spin-off  product software companies as well. From 2009 through 2012, we’re up to more than 300 people in Ho Chi Minh City. We’ll do over $10 million this year in revenue. We were rated the fourth fastest growing company in Atlanta in 2011.

SM: So, you have headquarters in Atlanta, and Ho Chi Minh City is the outsourcing team?

JL: Yes. We also have an office in Dublin, California, in the Bay Area. That’s where Vu lives.

SM: Talk to me about the business. $10 million worth of what?

JL: We have a very specialized focus, and it’s working with software product companies, technology companies. We don’t go out and try to sell to the big brick-and-mortar companies and the airline or retail. Our specialization in our prior company and in KMS as well is to go in and partner with an ISV or a startup or software product company and take over and/or supplement a lot of that company’s software development, maintenance, QA, or support functions. It’s traditional IT consulting, like an Infosys started out with or Wipro. It’s just being done out of Vietnam, and it’s being done for small, midsize and some large software product companies.

SM: That category is called outsourced product development. We’ve done huge stories about Persistent, Symphony, Globant, Global Logic, all of these companies that are larger competitors in your category.

JL: Correct. I’ve competed with those companies over the years. I haven’t competed with them since we started KMS, but I am familiar with Symphony and Persistent and the rest of them.

This segment is part 1 in the series : Outsourcing: Josh Lieberman, Co-Founder of KMS Technology, Atlanta and Ho Chi Minh City
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