From Start-up to $420 Million Giant: Lessons in Growing Big
Anytime you see a satellite image it probably was produced by Longmont, Colorado-based DigitalGlobe, a 1,300-person company that last year netted $421.1 million in revenue. Founder and CTO Walter Scott says Google, Apple, and Bing all use its imagery as does do NASA and even the Russian government.
But the company didn't start out as a behemoth, obviously. In 1992 Scott left the Lawrence Livermore National Laboratory where he had been working on the Strategic Defense Initiative, a.k.a. the "Star Wars" program. After founding what was then called WorldView Imaging Corporation and getting funding from Silicon Valley investors as well as corporate backing, 17 years later DigitalGlobe went public.
Here are three things Scott says a start-up needs to stay alive long enough to get big.
All start-ups deal with setbacks of some sort, but when you're dealing with satellites that cost hundreds of millions of dollars it's beyond devastating when they blow up. Both the first and second ones the company tried to launch shared this fate.
"So that sucked, but each time we were able to take a step back and say 'Do we have the ability to continue? Yes. What's it going to take? And is it worth continuing?' Scott says. "And each time we picked ourselves up and continued on forward. Stick with it long enough and either you've won or you haven't won yet."
A Ruthlessly Honest Business Plan
Don't think of your business plan as something you'll use to sell to investors. Instead, it's an instrument for testing whether or not your idea truly makes sense.
"View your business plan as a tool for determining whether or not you're wasting your own time. And be absolutely ruthless. Try to anticipate every possible objection and figure out does it really make sense or not because at the end of the day you're not doing yourself a favor if you drink your own Kool-Aid not realizing that the Kool-Aid is actually not really nutritious," Scott says.
Lots of Funding
When DigitalGlobe was still a start-up it had the opportunity to take money from one source that wanted equity and another that would put the company in debt. While DigitalGlobe only really needed funding from one of the two it took it from both as a measure of protection against risk.
"We repaid the debt completely and we didn't need it but we didn't know that at the time and it was a good thing that we had it because stuff happens," Scott says. "Generally having money is better than not having it and it gives you options. You can choose not to spend it but if you don't have it that choice is gone."
He says two things kill companies, the management team self-destructs or they run out of money.
"So how do you protect against a management team self-destructing? Make sure that you get along with the people who you're in it with. How do you prevent against running out of money? Don't spend it and make sure that you have it," Scott says.
What's Next for DigitalGlobe
DigitalGlobe currently has five satellites in space with another called WorldView-3 expected to launch next year. WorldView-3 will be the first to offer multiple shortwave infrared bands that allow for accurate imaging through haze, fog, dust, smoke, and other air-born particulates. Scott told me it can detect colors people can't see and can identify minerals on the ground from space.
"So there are things that we can do with the new satellite that open up applications that have never before been possible from space," Scott says.