Web development firms serving the precarious dot-com sector might be in a state of panic, but you won’t see Jim Ashby and fellow co-founders of Santa Ana-based Epic Partners Inc. fretting about any technology slowdowns.
His 2-year-old company is staking out a growing niche in old-line segments such as healthcare and banking,steadfast industries still eager to catch up with their online counterparts, Wall Street corrections aside. So far, so good: Epic is on track to triple its revenue to $6 million this year, and Ashby is betting heavily on further growth with a new 10,000-square-foot Aliso Viejo headquarters and plans to double his workforce to 80 this year.
“The correction leaves a lot of nice, rational businesses that haven’t leveraged the Internet,” he says, estimating that as many as one-third of traditional businesses have yet to exploit fully the available technology.
That, he contends, gives Epic plenty of room to grow as businesses study the successes and failures of the dot-com sector and develop their own Web strategies. Epic has offices in San Francisco and St. Louis, Mo., with plans to expand into other second-tier cities such as Nashville, Tenn., Charlotte, N.C., Cleveland and Des Moines, Iowa, next year. Ashby is targeting smaller areas to avoid excessive competition in highly saturated areas such as Los Angeles and New York.
Though the company offers Web site design, its real specialty lies in the behind-the-scenes software that runs those sites and integrates them into customers’ existing technology, everything from database management software to setting up the hardware that runs it.
Businesses will spend about $20 billion this year on outside help to devise and set in motion an e-commerce strategy, according to Cambridge, Mass.-based Forrester Research, with growth rates as high as 50% per year for the next few years. Indeed, most analysts predict the biggest winners in the Internet gold rush will be companies that make the tools and services businesses need to get online.
Despite a dot-com downturn some worry will dampen growth in Internet-oriented businesses, most industries will continue to embrace the Internet and find ways to modernize the way they operate, Ashby says. That leaves plenty of room for growth in serving traditional businesses, even as so-called new economy outfits flounder.
So far, Epic has been self-funded, and Ashby has no immediate plans to seek outside investors. He’s not ruling it out, however, and may need it if the right acquisition targets come along. Then again, with bigger Internet services firms quickly absorbing smaller players, Epic could easily be swallowed up itself.
None of the company’s founders has an extensive tech background, a history they say actually gives them an edge when competing with big-name consulting firms and the multitudes of smaller Web-design startups.
“It’s not about the technology,” Ashby says. What his business is about, he argues, is delivering on promises and enhancing business performance.
Ashby earned his undergraduate degree in biology and an MBA in finance. He went on to manage or head several businesses and co-founded South Coast Rehabilitation Services, which grew to about 2,000 people and generated $100 million in annual sales when he sold it to Regency Health Services Inc. of Tustin. During his time with South Coast, he organized a software division to handle the company’s information management needs.
There it quickly dawned on him that data, and the technology that helps manage it, would become a big business. Using about $1 million of the money from the South Coast sale, he and his co-founders hired programmers and consultants and began knocking on the doors of the businesses they knew best, healthcare providers and financial institutions.
But the firm has plenty of new economy customers too, including San Mateo-based Internet search technology maker Inktomi, St. Louis, Mo.-based college Web site Campusdog.com and Newport Beach-based online human resource service Strategic HR.
Ashby and his fellow executives still play up their non-Internet backgrounds when pitching their services, emphasizing the business sense of designing and installing a system rather than its technological expediency. It’s a pitch that plays especially well to executives at traditional businesses, who demand bottom-line results, says Dan Larson, Epic’s chief development officer.
“If you get me in a room with a CEO, I can sell this,” he says. “I’ve been there, and I know what they need.” n
