Bootstrapping Using Services: George Anderson, CEO of Ninth Wave (Part 2)

Sramana Mitra: Enterprise Engineering was an enterprise technology consulting firm?

George Anderson: It was and still is. 

Sramana Mitra: That is the company that we are talking about today?

George Anderson: The company that we are talking about today is a software business within Enterprise Engineering. I spun out that software business two years ago. That company is called Ninth Wave. 

Sramana Mitra: That is interesting because this is the methodology that we use in 1Mby1M. We have a track that we have formalized for a long time now. We have case studies and methodology of that track which we call Bootstrapping Using Services.

This is exactly what you have done. You built a services business and then bootstrapped a product company out of the service business. 

George Anderson: I am a huge believer in that model. I’ll tell you something that I ran into along the way. I did bootstrap the company that way. I worked around the clock. I would go out and consult with my clients and would do billing while I was building the company. Every billing dollar that I was able to generate went into payroll to grow the business. I started with very little capital. I grew from $0 to $16 million in 18 months. 

Sramana Mitra: How did you do that? Can you double-click down into that? 

George Anderson: I had done some really good work for Wall Street firms. I had built a really good reputation as being a problem solver. I wouldn’t want to say that I’m a visionary because they are smarter than I am, but I had an ability to say, “Here’s where you are, and here is where you need to go. Let’s roadmap that and make it happen.“

I was good at that. A lot of people trusted me. When there were problems in building a new system for the business, they knew that I would get it done for them. They gave us a lot of opportunities.

There were a couple of times where I remember having to run to the bank because I had to borrow some money. I had to get to the bank before noon to make payroll. It was a fast-growth track. 

Sramana Mitra: How many people were you doing $16 million with?

George Anderson: About 60. 

Sramana Mitra: You hired 60 people in 18 months and delivered $16 million worth of work. That’s impressive. 

George Anderson: Thank you. It was fun. It was probably about 24 months but within 18 months, we were at about that run rate. It probably took us 2 years to deliver. I’ll never forget this moment. This was a fun moment. You have these moments that recharge you and make you realize that it’s worth it.

One of those moments was in the year 2000 where we won the Deloitte Fast 50 and also the Fast 500 award. We were the fastest-growing firm in the tri-state area. We were fifth overall and all the companies ahead of us were public companies. They no longer exist. 

Sramana Mitra: This is 1995 to 1997?

George Anderson: Yes. 

Sramana Mitra: What happens next?

George Anderson: In line with your bootstrapping with services, I didn’t set out to build the services company. What I had set out to build was something that would provide value to all participants – to my customers as well as my people.

To establish something that is durable and has value over time, I started that as a complementary. I built a learning center in lower Manhattan. I had four classrooms that I had filled out. I also had a certification testing center. I taught high-end non commodity based education. I didn’t teach you Microsoft Office and things like that.

I taught data architecture, data replication, or data strategy. I taught a lot of things that are hard to do. We did well with that business. It was a profitable business and a very satisfying business.

It did a couple of things for me. One was people who wanted to work for the company knew that if they came in, they would have that education and capability. They could come in and learn leading-edge technologies and learn how to apply them. It was a good attractor. It allowed me to sell to big companies like Goldman Sachs, Morgan Stanley, and Bear Stearns. It’s hard to get in there.

Sometimes, I would have somebody that wanted to buy my services. I would go and meet with the purchasing people. These people sometimes were pretty arrogant and they would say, “You are just a body shop – a consultancy. I can get this anywhere.”

I think I had good patience with that. I would say, “Wait a minute. Let me introduce myself and my company again.” I would tell them about the learning center and I would tell them about what made us different. That enabled me to get on the vendor’s list.

I can get through procurement. I could be on the vendor’s list at Merrill Lynch and Bank of America. I built that business up. Life wasn’t complicated enough. In line with your bootstrapping mantra, I saw an opportunity to build a software offering. 

This segment is part 2 in the series : Bootstrapping Using Services: George Anderson, CEO of Ninth Wave
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