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September 27, 1999

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Small Business Strategies

A tale of Tigers

Founded by Louisiana State graduates, InCircuit grabs its share of software market

Mary Alice Piasecki   Special To The Austin Business Journal

The Louisiana State University mascot is the tiger. That's a fitting image for a trio of LSU graduates who founded Austin-based InCircuit Development Corp.

The eagerness, energy and Southern charm of the company's top Tigers have played a key role in development of the software firm. Clients describe the company's co-founders -- Alan Colby, Darrin Daigle and Kerry Brandon, all alums of Louisiana State -- as a group of "real good guys."

But one thing outshines the threesome's smoothness: their savvy approach to technology and business.

InCircuit started as a side job in 1994 for Colby, president and CEO, and Daigle, chief technology officer. The only funding came in the form of what Colby terms "sweat equity" -- their own capital and hard work.

With that, they developed Atrack for Windows, a PC-based bar code system that automates inventory functions. The side job became steady after six months, as the product generated significant demand in Louisiana. Then the company was awarded an exclusive contract with the state of Mississippi.

"After we developed demand ... our users started requesting we modify our product for more specific purposes," Colby says. "Rather than just quickly modifying, we took a lot of time looking at the market."

Colby says this process led InCircuit toward development of Protégé, an umbrella software package. Protégé provides a modular solution that stands on its own or complements an existing system. The product eases a wide variety of business activities such as sales and purchase orders, inventory, fixed assets, equipment maintenance and more.

InCircuit also developed devices with lasers attached to the ends to read bar codes and automatically transmit the information. Protégé can automate data collection through batch, wireless networking and Internet media.

"The work we're doing is all on the Internet side. We manage the Internet server," Daigle says. "It's good to finally see the Internet being used as a practical business tool."

Instead of selling Protégé products directly, InCircuit designed a reseller program. Colby describes the philosophy as the opposite of Dell Computer Corp., which sells directly to customers. Through InCircuit, people gain either basic or advanced certification as independent contractors to promote the products.

This reseller program has helped InCircuit rely on a relatively small full-time workforce: The company now has nine employees. It plans to add three to five technical employees in the near future.

Colby and Daigle are majority shareholders of InCircuit, which moved to Austin from Santa Barbara, Calif., in 1997 -- three years after it was founded in Louisiana. Brandon is a minority shareholder.

Daigle and Brandon have known each other since attending elementary school in Gonzales, La. Daigle and Colby met in graduate school at LSU. Colby and Hebert became acquainted just after graduation through a shared hobby -- offshore fishing.

Clearly, a company founded by a group of friends doesn't mind mixing personal relationships with business. One of InCircuit's projects illustrates that.

Brandon happened to live next door to a golf course superintendent. The neighbors began talking about Protégé's capabilities, and the superintendent said no software vendor had created a product specifically for golf courses.

Soon after, InCircuit gave birth to GCS (Ground Care Systems) for Windows -- the first Windows operation of its kind. The product integrates several management functions, including chemical/fertilizer, weather/irrigation, personnel, financial and grounds layout.

"Our software was developed to make all of their logging easier and faster," Colby says. "It logs equipment costs, compares budgeted to actual expenses and keeps tract of chemicals used on grass fields."

InCircuit debuted the product in 1995 at the Golf Course Superintendents Association of America show in San Francisco. Within four months, the Toro Co. decided to bundle the software with its outdoor maintenance and beautification products.

"In a relatively short period of time, we went from zero to over 500 users," Colby says.

Now, GCS for Windows has more than 1,100 users internationally. The product sells for about $2,500.

Protégé has a wide price range, anywhere from just under $3,300 up to $300,000. Protégé's median price is $20,000.

InCircuit's gross revenue has grown at least 100 percent a year since 1995. In 1996, its growth rate was more than 200 percent. That was the year InCircuit teamed with Toro. InCircuit officials declined to reveal total revenue.

"We're structuring our business to become a dominant player in warehouse automation and other inventory control-related vertical markets," Colby says. "I expect to grow at a higher percent in the next two to three years."

Dean Hebert, vice president of marketing and sales and another graduate of Louisiana State, says InCircuit's products have mass appeal.

"We've started to become very successful in segueing from smaller to extremely large companies," Hebert says. "Everyone from mom-and-pop to major corporations will be considered targets."

Among InCircuit's national clients are Computer Sciences Corp., Sandia National Laboratories and Lockheed Martin Corp.

Local clients include the City of Austin's six municipal golf courses, Onion Creek Country Club, Barton Creek Country Club, Lago Vista Golf Course, Great Hills Country Club, the Texas Education Agency, the Texas Department of Economic Development, the Texas Workforce Commission and the Texas Department of Criminal Justice.

The Department of Criminal Justice decided it wanted to track 74,000 pieces of inventory using a bar code method. These pieces are spread among 420 locations and add up to $3.5 billion worth of assets.

After one software company failed to deliver an appropriate solution, the organization turned to InCircuit.

"We had a specific objective; they [InCircuit] altered it to fit our request," the Criminal Justice Department's Buddy Moore says. "These people made it do what we wanted it to do."

Moore says he was impressed with how InCircuit representatives were able to mold Protégé into a program to meet the organization's needs.

"I feel like it offers us better control and better accountability over all of our assets," Moore says. "If we can use this software system with the volume we have, it is an indication this software is well put together."

The superintendent of Great Hills Country Club expresses similar sentiments about InCircuit's GCS for Windows product.

"It does everything, in my opinion," says Ray Marshall, the superintendent. "It's a tool that is irreplaceable as far as I'm concerned."

Marshall says he likes the way the company instantly can modify the software over the Internet.

"I think the Internet is the way to go," Marshall says, "and I think they are right on top of it."

MARY ALICE PIASECKI is an Austin-based freelance writer.




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