The core of the 25 people that make up MethodFactory, a software design and development firm, aren't the standard issue button-down government types.
There's the jeans and sneakers attire favored by some of the staff. There are the relaxed conversations about the company held while sitting on and around funky furniture. There's the basketball hoop hanging from the center of the building's main stairway. And then there's the company's building itself, a converted warehouse that once stored pumps and lines for Sarasota's water system.
Yet thinking like a government bureaucrat is carrying Sarasota-based MethodFactory through the recession. To wit: the company landed one of its biggest government contracts to date in late November, when it was hired by the state of Florida to provide technology consulting services for all state departments and more than 1,000 state-affiliated agencies.
It's a three-year contract that includes providing software assistance and implementing Microsoft programs for everyone from probation officers in the Panhandle to motor vehicle department employees in Key West. “We expect this will enable us to aggressively grow our local government market,” says Steve Walter, a partner with the firm.
The Sunshine State deal also represents nearly 20% of the company's annual revenues. James Williamson, a MethodFactory co-founder and partner, declines to release specific annual revenues or how much the Florida contract is worth. Williamson, however, did say the company is hovering around $4 million in annual revenues, and, like most firms that rely on government and small-to-medium sized businesses for work, MethodFactory's sales growth in 2009 has been flat.
Beyond revenues, the Florida deal is a big step in the company's long-range plan to become a player in government work. The company already has a roster of more than 20 government clients, including Sarasota County; Charlotte; Indianapolis; Jacksonville; Wayne County, Mich.; and Montgomery County, Ala.
Moreover, the Florida contract is especially sweet for MethodFactory because both Walter and Williamson admit the firm fumbled away its shot at the deal in 2006, the last time the contract was up for bid. That's when the company missed a key deadline to submit paperwork.
“We missed the opportunity before because we didn't get our stuff together,” Williamson says. “It was bad planning on our part.”
It was also uncharacteristic, as MethodFactory has fine-tuned its system for obtaining government work. Still, even today, getting government work doesn't always come easy to the firm.
“Normally, it's a painful and convoluted process to work with state and local governments,” says Walter. “It can take months to become a government vendor.”
Adds Williamson: “There's so much red tape and paperwork involved that it could kill a deal.”
Method Factory, though, has persevered through many of those challenges. And by doing so it has created a road map of how to win work from a government entity.
Still, as much as Williamson values government work, he's loathe to let the company rely too much on government jobs. He has seen such a lack of diversity burn other companies, ones in and out of technology.
Indeed, when Williamson and three other technology entrepreneurs founded the company in 2000, one top priority was to maintain a diversified client base. Williamson especially saw the value in that strategy, as he spent the decade prior to MethodFactory in his native California, where he ran a technology business incubator. He helped launch more than 15 companies there, working in conjunction with the University of California-Davis.
By the summer of 2001 Williamson had relocated to Sarasota and MethodFactory was on the verge of landing its first big government contract, with the city of Charlotte. In fact, the company's top salesmen were driving from Sarasota to North Carolina on Sept. 11, 2001.
MethodFactory made its pitch a week later and it got the job — beating out several bigger firms, including one that was the Microsoft partner of the year in 2000.
The company has steadfastly tried to keep an even balance of government and private industry entities as clients. Plus, through 2008, the company added no more than 10 clients a year, Williamson says, as it took the approach that a low-volume, high-attention strategy would be better for retaining clients.
But this year the company tweaked its strategy by going for more market share over lower volume. It worked, as the company picked up 18 clients in 2009, a mix of government and private industry entities.
Williamson hopes for more of the same in 2010, going as far as almost setting up two MethodFactories. One, led mostly by Walter, will handle government jobs — seeking new work and maintaining customer service on the current projects.
The second version of the company will focus on attracting more private business clients. In that regard, the company has historically gone after medium-sized businesses that are small enough to need some outside technology and software help, but not yet big enough where a company such as MethodFactory will get lost.
In the past, that has meant that most of MethodFactory's clients have been in the $20 million and up annual revenue range. That is sure to change in the future, as MethodFactory executives predict the potential recovery from the recession, whenever that may be, will redefine the markets and companies they target.
“A lot of people are still keeping their powder dry,” Williamson says. “People don't know if this downturn is going to last another six months, 12 months or 18 months.”
As it stands now, the company plans to seek clients in 2010 in as many as 10 metro areas that are either a day's drive or a two-hour flight from Sarasota. That list includes Atlanta, Nashville and Charlotte. The company plans to hire as many as six people next year as well, to work both the sales and customer service side of the strategy.
A share point
One key to the company's strategy of two business campaigns in 2010 is Microsoft SharePoint, which is used by private and government clients. The product is essentially a collection of software tools that allow organizations to share everything from Web access to Word documents.
MethodFactory has several employees that have become SharePoint gurus over the past few years, which has led to the firm picking up several new jobs off referrals.
“SharePoint can do almost anything,” says Williamson. “But you have to plan it right.”
One SharePoint job, for instance, involved setting up an Intranet system for the Hillsborough Area Rapid Transit Authority (HART) in Tampa. MethodFactory has since worked on similar projects for Intertape Polymer Group, a Canadian and Bradenton-based plastics and paper products company; the city of Indianapolis; and the California Chamber of Commerce.
Williamson says another boost for MethodFactory in connection to SharePoint is that Microsoft recently released a 2010 beta version of the product. It is scheduled to be officially ready by the summer.
The new edition has some helpful changes, says Williamson, including a business component that uses more graphics and Internet features. Says Williamson: “It's a nice solution that many times will sell itself.”
Mark Gordon covers the Sarasota-Manatee region. He can be reached at [email protected], or 941-362-4848.