Successful Pivot to $5M in Revenue from Chicago: Cohesive Networks CEO Patrick Kerpan (Part 1)

Patrick has built an interesting company from Chicago that had to go through a significant pivot.

Sramana Mitra: Let’s start at the very beginning of your story. Where are you from? Where were you born, raised, and in what kind of circumstances?

Patrick Kerpan: I was born in Tulsa, Oklahoma. My father was a policeman. My mother raised us. He was a Chicago area farm boy. His family was Croatian immigrants. My mom was a Brooklyn girl. He met her during the war. I was born and bred Oklahoman. I get caught on words like defense and cement, but other than that, I sound more Midwestern.

I studied at Northwestern University in the Chicago area. I worked mostly full-time through university in order to be able to pay for it. I was working as a janitor at the Northwestern Student Center. I once missed a mandatory janitorial staff meeting. Apparently, it was very important because I was fired for missing that meeting.

My girlfriend at that time was taking a computer course. I was at the computer center picking her up. I’d been without a job for a few days. Back in those days, there was a corkboard with white index cards on it. One of the white index cards said, “Wanted: Night Computer Operator” I thought, “I need to be awake at night because that’s when I have to work. I know what computers are. I’m staring at them.” I interviewed for that position and ended up being hired as a night operator while I was getting my Journalism degree in the day time.

It turned out that that became the foundation of one of the biggest high-tech derivatives firms in the world. I taught myself to code at night because programs always break at night. They didn’t like waking people up to fix their programs. Six or seven years later, I was head of all financial applications. That’s how I got started in software.

Sramana Mitra: Can you put that in context of a timeline? What year are we talking?

Patrick Kerpan: That’s 1981. I finished university at 1983. I worked in global capital market industry until 1997. Then, it was time to start a software company because that’s what everyone was doing.

Sramana Mitra: Where were you based at this point?

Patrick Kerpan: Chicago and then New York.

Sramana Mitra: In 1997 when you were starting the software firm, you were based in Manhattan?

Patrick Kerpan: I came back here to start it and also to start a family. We moved back to the Midwest. I had always been enamored by the idea of working very closely with one of Steve Jobs’ only customers at Next.

Sramana Mitra: Do you know Dominique Trempont?

Patrick Kerpan: No.

Sramana Mitra: You’re talking Swiss Bank, right?

Patrick Kerpan: Yes.

Sramana Mitra: At that time when NeXT was selling to Swiss bank, my husband Dominique Trempont, who was running NeXT at that time, did that deal. I remember that Swiss bank was a very important customer of Next at that time. Going back to your story, you moved back to Chicago in 1997?

Patrick Kerpan: Right.

Sramana Mitra: What kind of company were you about to start in 1997?

Patrick Kerpan: In 1997, we started a company called Bedouin. I thought it was a great name because if you look at what was happening in the Internet, we just had this completely unmapped territory. It was constantly shifting. It was all so new. I had always been so amazed by the story of the Bedouin tribesmen and the territory they controlled and how they lived in the desert.

This is one of the important lessons I learned. Don’t listen to what people tell you. At that time, there was a meme that nobody buys infrastructure. People didn’t want infrastructure. They wanted applications. We built a fairly fascinating runtime on top of Java, which allowed you to move computer objects in the world of object-oriented programming. We built a set of tools that are very similar to what people in enterprise IT are calling application portfolio management – how you manage the business of IT by having a product approach and not a purely project management approach.

Another things we’ve learned is that timing is everything. That was online. It was hosted. By the time we deployed it, we were using VMWare and we had a free edition. The premise was that it was supported by advertising. It was just incredibly un-fundable.

Back then, ASPs were going under left and right because multi-tenancy hadn’t existed yet. We had virtualization, multi-tenancy, advertising. It was not a concept that we could push funding on. So we transformed that into a set of capabilities more focused on the developer. Things like version control, change management, and bug tracking over the Internet. It’s similar in a lot of way to some of the things we see today. In the year 2000, Borland Software bought that and became the foundation of them moving into the application lifecycle business.

This segment is part 1 in the series : Successful Pivot to $5M in Revenue from Chicago: Cohesive Networks CEO Patrick Kerpan
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