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Fixer
By Janet Leiser
Senior Editor
In 1971, Ray Weadock, a student at the University of Arkansas, predicted an America dependent on computers and technology in the year 2000.
Today, Weadock expects his newest startup, Tampa-based Persystent Technology Inc., to transform the computer world in much the same way the telephone switch automated phone systems in the early 1950s.
If Persystent succeeds, it won't be Weadock's first successful foray into technology. But it might be his biggest.
"I've been fortunate enough to build three multibillion-dollar companies," Weadock says. "This is much bigger than anything I've ever done in the past."
Weadock helped build VisiCorp, Quantum Corp. and Conner Peripherals. When he was vice president and general manager of Digital Equipment's PC business unit in the 1990s, annual sales jumped from $100 million to more than $5 billion.
Weadock, 53, holds up a 3.5-inch disk drive that he says is the first one ever made. An identical "hard card" is in the Smithsonian Institution, he says. Both were made in 1983 by Plus Development - a Silicon Valley company he helped start.
Persystent, started by Weadock about four years ago, has developed software that automatically repairs a computer each time it's turned on. That means no down time, no special visit by a technician to fix an ailing PC. The company has applied for a patent for its software.
"Nobody does what we do proactively, the way we do it," he says. "It's a very complex technology to implement. It's very simple in theory but complex to implement."
Companies spend an average of $2,500 annually to maintain a PC that cost about $700 to $800 to buy, Weadock says. Overall, business spends an estimated $600 billion to repair its PCs.
Imagine the time and money that can be saved if a software program kept the computers running without help from techies?
"PCs break so often today that the largest employment hole in the world is system support," Weadock says from his corner office at a small commercial center in Tampa. "Technology can't move forward again real fast until we solve this because it's now the bottleneck."
Down time
In 2000, Weadock was CEO of Tampa's Fortress Technologies Inc., an enterprise security company for wireless networks. He quit to spend more time with his family. His oldest son was a senior in high school.
At about the same time, Compaq asked Weadock to help the company write its long-term wireless niche computing strategy. "I figured I could do that between 8 and 3," he says.
Weadock's team identified two problems. "There is no management platform to manage both wired and non-wired devices seamlessly," he says. "And the cost of support was escalating out of sight. ... Today it's a $600 billion people problem."
The former Silicon Valley entrepreneur says software is designed to react to a computer problem after it occurs. "Fundamentally that's an architectural flaw," he says. "Your computer doesn't just quit or break. It degrades in performance over time. Once it gets sick, it just keeps getting sicker."
Weadock discovered an Orlando company, Smart Desk, which was working on technology to solve that problem, he says. In the interim, HP bought Compaq and shut down the company's external projects. He says he negotiated a deal to keep what he had learned.
Weadock acquired the key players and assets of Smart Desk. "Having done this a number of times, you don't know what you don't know about a small company," he says. "So we started a new one with a clean balance sheet."
For the first two years, Weadock capitalized the company. After Persystent had a product to sell and a dozen customers, Weadock sought venture capital.
Inflexion Partners, a local venture firm, along with Tall Oaks Capital of Charlottesville, Va., and Village Ventures of Massachusetts gave Persystent its first $3 million in two tranches about two years ago.
The firm initially sold its products directly to customers, but it plans to primarily use resellers. "At VisiCorp, I set up the very first channels around the world and built the model this industry has operated under all these years," Weadock says. "We recruit the channels that have the customers, and they resell the product."
The company now has about 75 customers, including Seminole Community College, Yahoo and the federal government. It has about a dozen resellers and is recruiting more.
Within the past year, Weadock raised another $7 million, with the same backers but a different lead firm, Valhalla Capital Partners of Reston, Va. Weadock, Hooks Johnston, general partner at Valhalla, and A. Reenst Lesemann III of Tall Oaks Capital sit on Persystent's three-member board.
"We're building a sales organization," Weadock says. "We're building a marketing organization. We've hired 12 people in the past two months."
The company now has 28 employees and is more than tripling its office space to 15,000 square feet.
He wouldn't discuss revenue except to say Persystent generated more sales in the third quarter of 2005 than all of 2004.
"The process is you hire a group of people, build revenue up, hire another group of people, build revenue up and hire another group of people and build revenue up," he says.
"We're investing in the future. We go from profitability to unprofitability to profitability and then invest more so it's a pretty tight organization, pretty tight ship."
Challenges
Despite the two infusions of capital, Weadock says venture capital is still tough to find for a startup tech company, particularly one located in Florida. Part of the problem, says Weadock, who moved Fortress to the Tampa Bay area about nine years ago, are the memories of the 2000 dot-com bust. Still, "it's getting better," he says.
It's also difficult to find star software engineers in the Sunshine State, he says. He recruited Persystent's vice president of engineering, Vehbi Tasar, from the Silicon Valley.
Another problem he faces at Persystent is building his organization's core culture. "We want a culture of dedicated, high ethics, high moral employees," Weadock says.
The company employs engineers from all over the world, including Morocco, India and Russia, he says.
Persystent would probably be two years ahead of where it is today if Weadock had built it in the Silicon Valley, he says, adding: "The capital is there. The engineers are there. The support system is built, and it functions well.
"But we are going to build this up," he adds. "It has an opportunity to be a very big company. I'm not going to make any predictions about an IPO or being acquired. But this company has a broad market for the technology - everything from a desktop computer to a server to a consumer product to the repairing of your car."
WEADOCK'S
PREVIOUS STARTUPS
Visicorp - Visicorp was a pioneering software company of the IBM PC era. Its most famous products: VisiCalc, the first spreadsheet program for personal computers.
Conner Peripherals - Founded in 1986, it was a designer and manufacturer of disk drives, tape drives, storage management software, among other products. It merged in 1996 with Florida-based Seagate Sofware, a maker of hard disk drives.
Quantum - A global leader in storage, backup, recovery and archive solutions and support, the company provides service in the Americas, Europe, Middle East and Asia.
A SERIAL ENTREPRENEUR'S FORMULA
• "If you have a dream, you have to stick to it," says Ray Weadock, who calls himself a serial entrepreneur. "Never give up and never give in. Remember it's always the darkest before the dawn."
• Plan your work and work your plan. "Think through what the end items are," he says, "and then work back to create a plan to achieve them. The key is not just to find out what problem the customer is trying to solve but what their definition of success is. ... Focus on the end result customer experience, not just the package of how you deliver it."
• Delight customers. "The difference is that happy customers are satisfied with what they purchased," he says. "Delighted customers brag about it to others."
• Hire good people. "Hire to your weakness," he says. For instance, Weadock says he's too nice as a boss sometimes. "I have high expectations for people, and I always look for the good in people," he adds. "Every now and then you have to have that operations person who looks for the holes."
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