DTC original recounts 40-year journey.
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Taylor, Mike |
Source: JACK FLOBECK HASN'T ALWAYS TRIUMPHED, BUT HE HASN'T MISSED MUCH action in 40 years' involvement with startups ranging from software companies to real estate firms to a magazine.
His advice to budding entrepreneurs: Forget focus.
"I'd like to strangle the person who came up with the saying, 'focus, focus, focus,'" the ebullient Flobeck says. "That is exactly what you don't want to do. When you focus--that's how we used to kill the ants on the sidewalk, with a magnifying glass. You'd catch up with them and ... zzzzzttt! You want to open your eyes. Keep your eyes open. That's what you want to do."
Most of Flobeck's insights are delivered in the form of stories. In the mid-1960s, a few years removed from Yale where he earned a degree in industrial engineering, he became director of new-product development for a fledgling company in the Denver Tech Center. Just the third tenant in the DTC, Information Handling Services grew from eight people working in an office above a radiator shop, to its current 2,000 employees.
The Englewood firm is now the world's largest supplier of technical, regulatory and engineering information.
Flobeck helped IHS in its infancy, but he wasn't around for all the growth. In 1978, he joined a startup computer software company called Dakin 5. As the firm's general manager, he would talk regularly to a young man out in Seattle with red hair and glasses who was building his own software company.
"He used to call me a couple of times a week," Flobeck says of Bill Gates.
Flobeck says Dakin 5 designed the first-ever accounting software for small computers, and that almost overnight the company's revenues soared from zero to more than $14 million. The only problem was that 90 percent of its sales were to one company--Apple.
Flobeck tried to warn the company's board of the danger it was courting.
"Listen!" he remembers telling the board. "Some day Apple is going to hire a brand-new, bushy-tailed Harvard Business School guy, and he's going to say, 'What's this? We're spending $12 million on software? Why can't we do it ourselves?'"
Flobeck's prophecy came true. Apple evetually canceled its contract with Dakin 5, slowing the Denver company's revenues to a trickle. Seeking to rebound, the Dakin 5 board of directors made Flobeck chairman and CEO.
Soon after, Flobeck met with a venture capital firm in New York. He wanted the VC to invest in a new operating software called "Window Shades."
"I figured I needed about $25 million," Flobeck says. "I explained how this would just take over the software business. And they stood up and clapped when I was finished." Flobeck says he figured the deal was clinched. "I was on cloud nine," he says.
Not so fast.
A representative of the venture group broke the news. "We had that funny kid in from Seattle about a month ago," the man said. "And his concept is called 'Windows.' Yours is called 'Window Shades.' And they're identical. We dug out the business plans, and it would be terrible for us to give you $25 million, having given him $25 million."
Flobeck says the New York firm sent him to Menlo Park, Calif., to meet with Reid Anderson, the chairman of a company called Verbatim, a maker of disks and software.
"Reid fell in love with our plan," Flobeck says. "He said, 'I'll buy you. You'll become a wholly owned subsidiary.'"
The deal was made. "We had a marvelous year and a half," Flobeck says. But a corporate reorganization followed, and Flobeck chose to leave.
These days Flobeck lives in Colorado Springs. He won't disclose his age except to say he graduated from Yale in 1956. He runs Mentor Media Services, for which he writes newsletters for small businesses and mentors young business leaders, and he is chairman of Integrity Airlines, a startup that charters limousines and airplanes for business-people. He says Colorado Springs-based Integrity has become profitable in its first 15 months.
In late March, Flobeck was asked to speak at a monthly gathering of entrepreneurs called "Startup Junkie Underground" in the basement of Wynkoop Brewery in Lower Downtown Denver. His topic: "How to dig your way out of financial craters."
Flobeck doesn't dispense a lot of advice, but what he gives is original, like his disregard for the importance of focusing. His startup experiences have included an unsuccessful magazine and a real estate company he launched in 1972 and then sold five years later. Given his varied career, his view on the overrated nature of focusing is not that surprising. His eyes remain unfocused but wide open.