Bootstrapping to Inflection: Dan Stewart, CEO of Happy Grasshopper (Part 2)

Sramana Mitra: When you decided to shut that down, what was the next move?

Dan Stewart: I went to work for one of my yellow pages clients. I became a construction manager of all things. That was a great experience because I got to sell millions of dollars worth of projects. In the process, I learned to manage those projects and become a better business owner. That led to starting my geotechnical contracting company which kept me busy for a long time. That’s where we won all the Inc magazine awards.

Sramana Mitra: What year was that?

Dan Stewart: We incorporated in 2000.

Sramana Mitra: You incorporated the second company while you were working as a construction manager for the other company?

Dan Stewart: When I went to work for the company, I went to work with the understanding that I wanted to be self-employed. We compromised essentially. He said, “I’ll compensate you as if you’re self-employed. You’ll sell and manage your own projects and then you’ll get a share of the profits from the projects.” After we did that for a while, I identified a niche that we wanted to expand into.

We incorporated this other company together. Unfortunately, our partnership failed. That ended at the end of 2004. Then in January 2005, we incorporated Geological, which scaled nicely and got us up to almost $10 million in revenue and about 100 employees. It was a nice cash cow business for a little over 10 years.

Sramana Mitra: What was the business?

Dan Stewart: It was geotechnical contracting, which involves deep foundations, soil improvements, and sinkhole remediation.

Sramana Mitra: What was the niche that you had identified and tried to do in the previous run with your former partner?

Dan Stewart: I’m going to circle back a little bit. The original niche that I identified was concrete restoration. I think it was our third or fourth job. There was a floor collapse on the ground floor. The project engineer said, “You need to hire a company that knows how to fix sinkholes.” That’s when I discovered a niche that I wanted to move into even more aggressively than concrete restoration. As a construction manager, there were no quality companies that I could refer to my clients. The good ones were booked out for over six months. The others were like two guys and a shovel.

Sramana Mitra: Why did that partnership fail?

Dan Stewart: We had differing interests. We were at different life stages. I wanted to reinvest all of my profits and growth. My desires were not shared by my partners. We parted ways. There was no non-compete agreement in place. I resigned in December 2004. Then in January 2005, I incorporated the new company.

Sramana Mitra: This went on for about 10 years?

Dan Stewart: The first company went on for about four years. Then Geological was incorporated in 2005. It was dissolved in 2015. We had a nice 10-year run. There was a legislative change in Florida. Sinkhole remediation was once covered by our homeowner’s insurance policies. It no longer is. The funds to complete the work dried up. You might remember the story that we had achieved the cash cow status.

We needed software to run our business. We hired a developer to build it. That became our initial software company. The core code that we built to run our geotechnical business became the CRM company that I exited in 2010. It was a year after that that we got to know each other.

Sramana Mitra: Right. How many people did you have in the construction company by the time you got this CRM software company going?

Dan Stewart: I think we probably had 30 to 40 people.

Sramana Mitra: You had personal bandwidth to be able to tinker with something else.

Dan Stewart: Yes, I did.

This segment is part 2 in the series : Bootstrapping to Inflection: Dan Stewart, CEO of Happy Grasshopper
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