Dwight Stewart Talks of People and Products at the June BIZ Luncheon

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“I’ve been doing technology for as long as I can remember, my dad gave me a programing book and I’ve been at it ever since,” recounted Dwight Stewart, serial entrepreneur, Founder of Igor and the June interviewee at the Business Innovation Zone’s (BIZ) monthly luncheon and networking session.

Working towards a Computer Science degree at Iowa State, already with literally thousands of hours of programming to his credit, Stewart would launch the first of his many technical endeavors in the form of CollegeRoute.com, a social networking site similar to another then upstart network called Chegg. Choosing to incubate his product while keeping college his primary focus, Stewart fell behind the rapidly evolving Chegg and struggled for some time after his launch to catch the rising star which has since gone on to great success.

“The experience taught me you have to have the right support system. At that time mine was telling me to stay in school and get a degree so I could get a job working for someone else,” he told Mike Colwell, Executive Director of the BIZ and Stewart’s questioner for the first half of the program.  The lesson of support systems, networks and relationships would weave like an Ethernet cable throughout Stewart’s message to those gathered hoping to learn from his experience.

While CollegeRoute.com was a less than stellar performer, it would be the exception to the rule and Stewart’s next endeavors would earn him serious credentials in entrepreneurship, technology and sustainability.  Quality Attributes Software(QAS), which he co-founded, would achieve international brand recognition as a software as a service product that monitored and managed the green and sustainable  aspects of buildings, claiming such distinguished clientele as the U.S. Government  in Washington D.C. where every building except the White House was managed by QAS.  After leading the company to the multi-million dollar level, Stewart and his partner exited and Stewart looked for the next enterprise, which would come in the form of Igor, a revolutionary plug and play lighting system that combines control and power over internet. Continuing Stewart’s commitment to sustainability the product can cut energy usage and costs as much as 60 to 70 percent in commercial lighting applications.

With Igor rolling out and Stewart soon off to the CleanTech Open, known as the American Idol for clean technology entrepreneurs, he sat down with Colwell and shared during an informal hour-long conversation.  Among the themes:

People, People, People.

Throughout his comments networking, relationships and connectivity were cited as critical components to business success.  “In real estate its location, location, location, but with business, it is people, people, people. It is the people that form your team, your support system and your customers,” imparted Stewart. Partners and investors are extraordinarily important, he would share, noting that if you are going to release total control of your company, you want to truly understand and be compatible with those to whom you relinquish that control. “Having the right people, with whom you are compatible and conversant is so important,” he would reiterate in driving home the importance of a support system.  “Whenever you are panicked, that is when you want to have someone to talk to first before you take action,” he said suggesting one should never act on emotion.

Building a team is no less critical. “I think about aptitude, attitude and character,” he explained, observing that the necessary knowledge is a moving target in the technology industry, but those three traits form the foundation of a team that will find or make the path to success.

Imitate Nature

Arguably green since before green was fashionable, Stewart looks to nature as a metaphor for business development.  “Things that are allowed to happen organically are probably following the easiest path,” he explains. Offering the example of a sapling that evolves into a tall tree he argues that, particularly with a product that has a physical component, rushing to market and growing tall before the roots go deep can have negative effects which will in turn impact unfavorably a company’s brand equity, which once damaged is very difficult to repair.

Working among the Giants

QAS worked with such large companies as Johnson Controls, Cisco and Siemens. “When you are a small mouse dancing with a not so gentle giant, you have to stay a step ahead so that you don’t get stepped on,” Stewart offered. He also suggested that the small company, once through the door, should remain benign and non-threatening while offering a value-add ancillary to the large company’s space. Finding a sweet spot that does not threaten or appeal as a potential absorption but that does add to the giant’s margin is the key to survival and success in those relationships.

B2B or B2C

Igor partners with established lighting companies to serve as sales, distribution and implementation agents for the software. While this means relinquishing a significant percentage of the final markup, Stewart cautions against failing to see the upside of these arrangements. The need to hire and manage a sales force, while waiting for it to develop the relationships and networks that are needed in the appropriate vertical markets can cost far more than the percentage yielded. In addition Stewart points out that as you add partners and their individual sales curves grow, yours begins to grow logarithmically.

Des Moines

Although not a native Iowan, Stewart hails from the Midwest and speaks well of the region and his adopted Des Moines as a place to incubate a business.  Both Stewart and Colwell argued that Des Moines was replete with individuals that could well play that support role that Stewart so highly valued, and do so with a genuine friendliness that might be absent on the coasts. Beyond the abundance of talented people to build a team and a support system, there is an appealing culture. “If you want to build a company on a Midwest culture, then you come here. If you are looking for a fast paced cut throat culture, there are places for that too.”

Washut Speaks of Roles, Values, Partners and Pivots at the BIZ Luncheon

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“Kate is focused on balancing the needs and demands of five partners, passionate about the entrepreneurial community in which she is heavily involved, and given that she spent nine years in the corporate world before going her own way, I would classify her as a reluctant CEO,” said Mike Colwell by way of introduction for his guest for the May BIZ Startup Stories event, Kate Washut, CEO of Far Reach.

Washut and her four partners, all refugees from a corporate environment that had turned cold and uninviting, formed Far Reach in 2007. Originally envisioned as a product development firm drawing upon the broad software development credentials of its principals and initially focused upon creating a better mousetrap in the form of an advanced student information system that could be sold to educational institutions, Far Reach would soon be introduced to the concept of the pivot. As Colwell, Executive Director of Entrepreneurial Initiatives for the Greater Des Moines Partnership, characterized it in his introduction, “You left the corporate world to build a product, pivoted to doing services, then came back to products and then added marketing to the business.”

In her hour long interview, fielding questions from Colwell and an engaged audience, Washut shared her thoughts on multiple lessons learned including the importance of the pivot, intelligent growth, the evolution of roles, housing services and product development under one roof, and the importance of core values.

The Pivot

Fully focused on the student information system but generating cash flow on the side with consultation and website development, the partners discovered through market research that the product they were building was unlikely to be a success in a market sector reluctant to embrace change. They suddenly found themselves adrift in the entrepreneurial waters without a destination. “The consulting and website jobs were going okay and we were making a little money, so we decided we would do that until we figured out what would come next,” explains Washut of their first pivot. Growing the business as consultants yet never fully ignoring the lure of product development has seen them join in three equity partnership endeavors where they have developed products in conjunction with others who held expertise in the market sector, but not in product development. Finally they would add a marketing component to the business making them a unique integration of end-to-end services for product development, branding and launch.

Careful Growth

The company that originally consisted of just the five partners has now carefully grown to a staff of 16, bringing in-house some of the services that they’d originally hired from outside. Key to that expansion has been the addition of a Project Manager position. “It was kind of a selfish decision,” remembers Washut noting that things were becoming chaotic and that the new position could focus on the project as a whole and provide a consistent point of contact for the clients allowing the team members to focus on their component and avoid the need to fully understand and communicate all aspects of all projects.

The Evolution of Roles

Along similar lines Washut spoke to the evolution from five partners involved in every aspect of the business to some division of labor and definition of roles. “Everybody discussing everything,” she and Colwell would note is an enormous demand on time and an inhibitor to work getting done. “Initially we all just pitched in and did what needed to be done, but over the years we just gradually fell into our roles,” she explained, and while she is not always altogether enamored or prepared for the role of CEO, it has embraced her and she it. She is quick to point out the importance in her role of knowing your strengths and weaknesses and determining when to educate yourself through your weaknesses and when to outsource/delegate that aspect of the role.

Services and Products

Integrating services and products under one roof with one team has both its challenges and rewards observed Washut of their fairly unique model.  “The priorities are very different,” she offered. “Product development is very long term whereas services are very now. With services, if you want to get paid for an hour, you have to work an hour.” The big challenge, which she admits they still struggle with, is allocating limited resources between the two business models.  The upside for Far Reach has been that the immediacy of the service component has allowed them to bootstrap the business, not needing investment capital to carry them through a long product development phase.

Core Values

“My biggest passion when we started this company was to create a place where people wanted to work,” she offered by way of expressing the importance she and all the partners placed upon core values from the day they started the business. While that was always a focus, it was difficult to formally define and would on occasion get briefly lost in the inevitable truth that a business must make money. “Core values are very important, but so is cash flow,” she quipped.  In 2010, inspired by a presentation of Tony Shay, Founder of Zappos, Washut and the partners undertook an initiative to define their core values. “We took some time to articulate what we stood for and what we believed in,” she said of their response to that moment. “It’s a journey for us, it didn’t happen overnight and it is still really hard for us, but I feel very strongly if you focus on those things, your people and your clients will be happier and the cash will flow.”

In ‘07 Far Reach began from a conversation among friends about what was really important, and seven years later, it finds its way to continued success through the extension and expansion of that conversation.

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