Fast-growing Web development company nudging $10 million in annual sales. Industry kudos. Lots of chatter about expansion and potential acquisitions.
Kevin Hourigan has been down this road before. Sort of.
But a few things are noticeably different between Hourigan's old company — Hydrogen Media, which imploded after the dot-com bubble burst a decade ago — and his current company, Bayshore Solutions.
Gone are the blue neon lights, disco ball and staff concierge who arranged to wash cars and make dinner reservations for workers. More important, a new fiscal reality has replaced the carefree accounting days that marked the dot-com boom and bust.
"I had one of my board members tell me (that) there's no MBA that could have ever given me the education that we went through," Hourigan said. "As a result of that, there was an agreement … that we'd never grow this company with any debt. We have reserves. … When we need something, we pay for it."
Hydrogen peaked in 2000 at $15 million in sales and 225 employees. Post-bubble, Hourigan and some other Hydrogen executives started over with a new name (Bayshore Solutions), a handful of their old clients and employees and about $1 million in sales.
They've been profitable every year since, maintaining double-digit sales growth through the recession.
Bayshore, which operates out of newly renovated quarters in Tampa's West Shore district, was recently singled out by the U.S. Chamber of Commerce as one of two Florida companies vying for small business of the year. Hourigan, 44, talked with the St. Petersburg Times about lessons learned in building what he calls his company's 2.0 version.
I thought we were past the booming dot-com era. Yet sales are surging?
We had a record year last year and that was breaking a record year in 2009. Demand for Internet services has almost never been as strong. Certainly in the dot-com era it was stronger. The difference is demand today is from companies using their own capital with strategic direction and expected results. … In the dot-com era, it was someone with — quote — a great idea, someone else's capital, and ''hopium" that they might be on the front page of the Wall Street Journal.
Of course, when the dot-com bubble burst … I got left with a bunch of projects halfway created, a quarter of the way funded.
How many people are you hiring this year?
We're about 45 people (currently). … We have trigger points at revenue streams where we would add staff. … Organically, our target (revenue growth) is 20 percent. … That's probably about 10 candidates.
Are you focused on certain industries?
No … and I think that's what has helped us grow in tough times. Eight years ago we almost chose (to focus on) financial services and real estate. We probably would have looked like rock stars for a short period of time. Probably would have had triple-digit growth if not quadruple-digit growth, but obviously we would have struggled in the last couple of years.
We see a lot of industries picking up now. We're bringing on new real estate customers. We see a heavy influx of marine customers. Large yacht manufacturers. We see a large recovery of the luxury lifestyle brands.
Who are your biggest clients?
Top five, year over year, Carnival Cruise Lines is one. Elizabeth Arden is one. Windstar Cruises. Another one is Colliers, the commercial real estate company. Another is Reeves Automotive.
How else is the industry evolving?
What's changing now are the devices from which we access a website. It's expected in the next nine months that 20 percent of Web visits will be by a mobile device. The way we see a website on a mobile device is different than the way we see a website on a computer.
In the last five years, there's been a huge adoption rate of Firefox as a Web browser. Google came out with Chrome. Safari from a Macintosh perspective barely had a heartbeat. Now it's at a 10 percent market share. Internet Explorer used to have 90-plus percent market share, and now it's 60 percent.
A website in Internet Explorer doesn't look the same as it does in Chrome or Firefox or Safari.
So how do you help customers adapt?
We determine what device is accessing the website and make sure we're going to provide a result that's going to meet that device's expectation. Our customer's websites have to be constantly kept abreast of how their customers' Web surfing patterns are changing.
Did you major in a computer field at USF?
Actually, I went to school to become a dentist.
Given Bayshore's growth, is this similar to the dot-com heyday at all?
Back then the valuation of Hydrogen Media wasn't based on our revenues or our earnings. Our valuation was based on the number of billable employees we had. Of course, that valuation quickly disappeared when the market wasn't going to let another dot-com go public.
So you nearly went public?
In March of 2000, when the first big (stock market) drop hit, we had Deutsche Bank engaged. We were on a road show. We were on their jet every week telling our story in Atlanta and Boston.
The first time Nasdaq slipped, the guys from Deutsche said the markets are just doing a little correction. We'll postpone our road show for a week. Just a little market correction. These things always happen. A week turned into two weeks. Two weeks turned into four weeks. About four months into it we realized this correction wasn't coming back any time soon. We were a company losing money and expected an IPO would right-size some of this. We followed the "going public" business plan to a T. Unfortunately, we were too late.
Does the industry feel more real this time around?
Oh, 100 percent. Our customers are investing their own capital. These are very elaborate marketing strategies. No one is using ''hopium" as a decisionmaker.
The environment appears different as well. You don't have the disco ball like the old Hydrogen Media?
There's a lighter instance of shenanigans here but we do have a GameCube. And there's a couple of Nerf balls in here. … But that's all part of having a creative work force. We didn't do it just to make it look cool. We did it because it's who we are.
(At Hydrogen Media) we had a full-time concierge. Did employees ask for it? Never. We did it because other companies were doing it. … We're not a fad follower any more. We're a serious business helping our customers with serious expectations.