Doug Mellinger, founder of PRT Group, is hailed as an entrepreneurial antihero. Read how he created a wildly successful software design company that isn't centered around his vision or persona.
Cover Story
People already compare him to entrepreneurial heroes Gates, McNealy, and Jobs. But that's off the mark. Meet Doug Mellinger, the CEO as boy next door
When the Lehman guy wouldn't go to India, "that's when I snapped," Doug Mellinger is saying.
He's telling this to his father, in his father's backyard--the backyard of Mellinger's green-lawned suburban boyhood. It's early summer 1994, and the 29-year-old founder of PRT Group Inc. is in full rant.
Lehman Brothers, the New York City-based investment-banking firm, is a customer. Mellinger's custom-software-engineering company was doing a project for Lehman in India, where PRT had at long last, and only by surmounting epidemic red tape, set up a subsidiary. ("Took us two damn years just to get incorporated," Mellinger says.) And just when the project hit one of those critical stages when the client and programming team have to collaborate face-to-face, "the client wouldn't go." Too long a trip, Mellinger explains. Or too many cows in the hotel lobby. Or maybe it was just the damn shots.
Mellinger senior nods; he knows. He's been to India. He's had the shots.
Now the future of everything young Doug had worked for was hanging in the balance, and there in the yard it was painful for the father to watch--it was hard not to see his son, whom he so admired, as the kid he still was. Still doughy-framed and freckled. Still unformed. The way anyone would have seen Mellinger then. Not as a Bill Gates or anything close. Just another founder who starts a business and makes it go, really go, through sheer force of will--only to hit a wall he hadn't foreseen. The wall in this case being that he can sell the work, all right--he just can't get it done.
Walk it through, the father says. Ask the questions.
Father and son had been here before--had wrestled in this very place with industry conditions gone haywire: U.S. demand for software engineers that catastrophically outstripped supply; skyrocketing salaries being commanded by whatever engineers you could find; unmanageable transience among the engineers you most wanted to keep. How can you hope to complete a client's development project when every half year your top programmers leave for a better offer or an unscheduled mountain-biking sabbatical in the Cascades?
Walk it through. Ask the questions.
The thing is, Mellinger thought he had asked the questions and answered them. The kid who'd started a Manhattan "body shop" in 1989--who rented COBOL programmers to anyone who asked, though he couldn't write a line of professional code himself--had already worked his way toward real relationships with clients. Big clients: Merrill Lynch. Chase Manhattan Bank. J.P. Morgan. PRT had grown to $8 million in sales as it helped companies figure out tech solutions to their business problems and then applied programmers to the tasks--programmers whom, even in 1991, Mellinger had begun going as far as India to get, outsourcing the work abroad. By 1993 he was trying to establish an Indian development center, something even multibillion-dollar competitors such as EDS and Andersen Consulting hadn't done, but now, only a year later, the experiment had run aground. Sure, the engineers in India were good; in fact, they were more skilled at the work PRT needed done than anyone the company could hire in the States. But now it didn't matter, because PRT's customers wouldn't go to India. Mellinger needed brainpower like India's, but he needed it to be in a better place. So he looked. Ireland, China, Kuala Lumpur. God knows, he looked.
And now here he is again in Chappaqua, N.Y., in the backyard of his youth, pacing in the garden, treading stones he'd probably kick if he didn't know so well what it took to lay them, because he'd laid so many of them himself. His labor-deprived company can't bring talent to the United States because of immigration restrictions and cost, and it can't tap talent overseas because every country presents an obstacle that prevents it. Dad, we've gotta get programmers. Here he is, against a wall he can't climb.
Years later Mellinger would think how fitting it was that he would find himself there in Chappaqua on that afternoon. "As kids we lived in that backyard," he recalls. "The whole neighborhood did." The yard is on a cul-de-sac, and it's bigger than most--more than an acre. There's a swimming pool and a hot tub just outside the house's back door, and beyond that a basketball court, with a hoop adjusted low enough for even middle-class white boys to dunk on. Off to the side is the small Japanese garden. Doug and his two younger brothers had worked in that yard whenever they weren't playing in it. It was where their adolescent lives unfolded. Where the parties were, where Doug flirted with his future wife, where later on his father helped him practice public speaking. It was the yard everyone came to. The yard where things happened.
What happened in the yard on this particular day was that Mellinger's rant about programmers led to a question, which led to an idea, which led to the decision that will forever define Mellinger and his company. What he needed, he remembers saying to his father, was a better country than he could find. And that's when he decided that since the country he needed didn't exist, what he would do is invent it.
He would invent a place programmers would want to come to, a place they'd want to stay. Build it, he thought, and the links would be forged. The customers would come because the place had what they needed, was where they wanted to work, and was home to the people they wanted to work with. It could be done, Mellinger thought. It was possible.
