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From $100 to $280M

Drumwright: “We have an insane amount of talented people”

Irvine-based technology consultant Trace3 started with a Benjamin.

It was founder and Chief Executive Hayes Drumwright’s last bit of money after the failure of a business that got steamrolled in the dot-com bust of 2000.

“I lost all of our money,” Drumwright said. “I lost everything. We were wiped out.”

With Trace3 set to pull in nearly $300 million in sales this year, Drumwright has gotten his hundred bucks back and then some.

Drumwright was one of six entrepreneurs honored at the Business Journal’s annual Excellence in Entrepreneurship award luncheon held March 17 at the Hyatt Regency Irvine.

He’ll have to make room on his mantle. Drumwright’s also won another entrepreneur award from Ernst & Young.

And Trace3 has been recognized as a best place to work by three different local publications, including by the Business Journal last year.

Trace3 is what’s known in the information technology industry as a value-added reseller. It resells storage, networking and telecommunications gear from big companies and helps install, monitor and troubleshoot gear for companies.

The company does consulting work to help its customers with data storage networking, security, archiving data and other tasks.

Customers include Mercury Insurance, part of Mercury General Corp., MGM Resorts International’s MGM Grand Hotel, Honeywell International Inc., Qualcomm Inc., Fox Broadcasting Co. and Sony Corp., among others.

Sales Growth

From 2006 to 2008, Trace3’s sales grew nearly fivefold to $100 million, according to Drumwright. It managed to eke out a 10% sales gain during the downturn in 2009 to reach $110 million in yearly revenue.

Last year it reported sales of $186 million.

This year, Trace3 is on track to see 50% growth to about $280 million in sales. Drumwright said he’s eyeing $500 million in sales by 2014.

The company more than doubled its space last year in a move to a new headquarters, where it has 160 workers.

Before Trace 3, Drumwright, 38, started and grew Irvine reseller TechFuel Inc. to about $25 million in yearly sales.

Then he and his partners raised some $7 million in venture funding to pursue developing social networking software. That didn’t pan out.

TechFuel shut down and filed for bankruptcy in 2001.

It was a low point for Drumwright, who said he “laid off my best friends, my brother and employees of six years.”

He also wiped out his personal finances paying creditors and suffered a bout with testicular cancer.

Those lessons helped shape Trace3, which Drumwright started with cofounders Dave Linder and Bret MacInnes in 2002.

Linder is an engineering manager at Trace3. MacInnes is a practice manager.

The company was able to get off the ground with the help of Chief Financial Officer Nate Julson, who had a lot of contacts in the industry, according to Drumwright.

“A Players”

Drumwright attributes the company’s growth to his policy of only hiring what he called “A players.”

He attracts and keeps them by paying what Drumwright says is the upper end of salaries.

He plucks high-performing salespeople from big storage gear makers, such as EMC Corp.

Drumwright does the same for Trace3’s engineers, who do the “in the trenches” work.

Identifying talented workers with potential to move up is a skill Drumwright said he’s honed through the years.

“It’s not a personality type I’m looking for—it’s a way of thinking,” he said. “We have an insane amount of talented people. We stretch them as much as possible when we see potential.”

In his spare time, Drumwright spends time with his three young sons and is involved in charitable work.

He started a small wine company, Memento Mori Winery, with a couple of friends last year that’s set to begin bottling its own cabernet by 2013.

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