Competing with Giants: Colin Earl, CEO of Agiloft (Part 2)

Sramana Mitra: You had IBM paying the bills and you were basically hatching a company on the side. You had the time and runway to do that.

Colin Earl: As anyone working 40 hours a week.

Sramana Mitra: Tell me about what you were doing on the side.

Colin Earl: I was working on an optimization technology – a blackbox optimizer. It would plug in to existing systems and allow the optimization of solid models to minimize stress while maximizing strength, minimize weight while also minimizing the maximum stress of the object. The reason that cars and other mechanical designs these days are light, fast, and stable while being resilient to crashes is because of an enormous level of design optimization that has gone into them.

Sramana Mitra: Were you doing this with a client or were you doing it based on your own idea? What was the mode in which you were doing this?

Colin Earl: I was doing this based on my own ideas and my understanding of the business, and from working for such firms myself.

Sramana Mitra: It was a mechanical design area that you knew and you had ideas in. You thought you had something that your clients would want.

Colin Earl: Exactly.

Sramana Mitra: How long did you perform this kind of side product development activity before you got engaged with the clients?

Colin Earl: Four years.

Sramana Mitra: You built something for four years and then approached a client.

Colin Earl: Yes.

Sramana Mitra: What year was this?

Colin Earl: This was from 1991 to 1995.

Sramana Mitra: How did you get your first customer for this product?

Colin Earl: We developed integration with Computer Vision and sold it through their sales force.

Sramana Mitra: It was like an OEM partnership?

Colin Earl: Exactly.

Sramana Mitra: You maintained your IBM relationship?

Colin Earl: I worked for IBM for two years. By IBM’s internal rules, that’s the maximum that you could work for them as a contractor.

Sramana Mitra: After that, you were on your own and you went and did this deal with Computer Vision and in four years, they started selling your product.

Colin Earl: Yes.

Sramana Mitra: How much did you sell in the first year?

Colin Earl: It was absolutely heartbreaking. We sold something like $50,000 worth in the first month. The following month, it was announced that Computer Vision had been purchased by another company. That company had its own optimizer.

Sramana Mitra: Your four years of work basically ran down the drain.

Colin Earl: Exactly.

Sramana Mitra: What did you do?

Colin Earl: I stepped back. After IBM, I’ve done CIO work. I was a contractor for another company, Highland Digital. That company also went under. I was there for a little over two years as a CIO. They went under primarily because of a lawsuit brought against them by former employees. I’d been managing the development team, which was based in Russia.

When the organization failed, the developers were writing to me saying, “Colin, what are we going to do? We’re not being paid. We’re not being told what’s happening with the company.” I had to write back and say, “Guys, the company folded two weeks ago. Let me try to find work for you.” These were really great developers. I began looking for contracting work and found it. I then built an organization doing sub-contracting for the likes of Cisco and other Fortune 500 companies. We built a company initially as contractors.

I have to say if you don’t take venture capital money or you’re not able to get venture capital money, then starting providing consulting services is a much easier and much efficient way to go than by starting to build the product. If you build a product, it’s really an all or nothing proposition. If your product is 5% better than the competition, you win the sale. You win every sale. If it’s 5% worse, you get nothing. You might have put thousands of man hours into the development of that. At the end of the day, you get nothing.

In consulting, it’s not the case. You get paid for your time. If you’re competent, you can always find work. You work 40 hours, you get paid 40 hours. You work 70 hours, you get paid for 70. As long as you’re out there doing a good job and maintaining a reputation, you will succeed. You will grow organically month by month.

This segment is part 2 in the series : Competing with Giants: Colin Earl, CEO of Agiloft
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