Three tales of growth in a recession
Their message was tantalizingly exciting at a time when the cable news channels, talk radio, blogs and newspapers are filled with news of economic woe. Afterall, there is a recession all around us -- haven't you heard?
Yet these executives from TCS, Sourcefire, and Salar -- three totally different companies -- were telling a crowd of about 100 people how they're bringing in more dollars. (That's the attentive crowd to the left.)
The venue was a hotel conference room at the Sheraton in Towson, Md. The moderator: Art Jacoby, an experienced business advisor who's well-traveled in Baltimore biz circles.
The executives were Tim Lorello, global commercial sales senior V.P. and chief marketing officer, Telecommunication Systems Inc. (aka, TCS, a service provider to wireless cos.), of Annapolis; Michele Perry, chief marketing officer, Sourcefire (computer network intrusion prevention), of Columbia; and Todd Johnson, president of Salar Inc. (clinical software for hospitals), of Baltimore.
Here's a quick-and-dirty rundown of what each talked about at the meeting, organized by the Greater Baltimore Technology Council:
(from left to right: Art Jacoby, Tim Lorello, Michele Perry and Todd Johnson)
Lorello of TCS talked about how they deploy systems for the military, with their products now in Iraq and Afghanistan. That's their government contract biz; on their commercial side, they sell technology that enables wireless providers to manage their text-messaging loads. And text-messaging is growing at a huge rate -- double or triple digit growth, according to Lorello. (Here's a snapshot of their finances.)
"If your kids text message, it's partly our fault," Lorello said, joking. "Twenty-five percent of text-messaging technology in the U.S. is provided by TCS."
The company has about $220 million in annual revenue, he said. Lorello said TCS has a lot of "interesting opportunities" as more different kinds of companies start to move into wireless networks, i.e. cable companies. Overseas opportunities beckon, he said, specifically in China and India -- both huge markets with lots of cellphone/wireless users.
His advice to the crowd: "You have to find the place you can focus on, the weak link (that no other company is focused on) and capitalize on it."
Michele Perry of Sourcefire said the small company has a "warchest" of about $105 million, which, I gather, means they've got a fair amount of investor backing. The company grew 35% in revenue last year, to $76 million, she said. The company could also get a boost from President Obama's emphasis on cyber-security, she said. (Note: The company has struggled for profitability ever since going public in 2007, losing $1.1 million in 1Q 2009 -- but that's a big improvement over the $3.3 million loss in the 1st quarter in '08.)
Perry said the company has a "maniacal focus" on profitability, with every expense under scrutiny. The company has had its share of hurdles to overcome.
Several years ago, the Gartner Group said there wasn't much future in Sourcefire's line of work: computer network intrusion detection, Perry told the crowd. (Correction: I initially wrote "intrusion protection," which is what Sourcefire now does, along with network protection. My bad.) The company tried to sell itself to an Israeli buyer, but that deal was blocked in 2006 by the federal government because of all the work it did for U.S. agencies.
Michele's advice: "Everybody has to be on the same page in your company. You can't afford in this economy to make mistakes. You have to be tenacious."
Lastly, Todd Johnson, who started up Salar Inc. in an apartment above a bar in upstate New York five years ago. First, the company started as a consultancy, then moved into making custom products for managing electronic medical records, particularly for doctors and hospitals involved in acute care. But, he estimated that only about 1.7 percent of hospitals have acute care electronic documentation for physicians -- the rest is still paper, he said. That means that 98 percent of the market is still untapped, he believes.
Competition is stiff, with heavyweights such as GE selling their systems to hospitals, he noted.
"We need to differentiate ourselves in terms of being smarter, faster, better," Johnson said. His company saw about a 17 percent growth in 2008, and is on track for 25 percent growth in 2009, he said.
His advice: Have a laser-like focus on the customer. "Do everything you can to build a product or service for them that's outstanding."
So, there you have it: wireless technology, cybersecurity, and health care information technology. All seem to be pretty active areas right now, according to Lorello, Perry and Johnson.
Any other growth stories out there in Maryland? Drop a note in the comments below. What's hot right now?
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