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STRATEGY

Snapshots: Locations
 

These Inc. 500 companies relocated for various reasons -- from access to skilled labor to the CEO's love of the outdoors.
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Big-Sky Country

Business: Maker of computer-based camera systems
Location: Bozeman, Mont.
Site rationale: CEO's love of the outdoors

Less than a year after founding Vision 1 (#153), which provides systems that act as electronic eyes for automated machines or robots, Brian Smithgall relocated the company, and his family, from Atlanta to Bozeman, Mont. He says he made the move because he likes camping, skiing, and hiking in Montana's wilderness.

The CEO certainly didn't relocate to be closer to his customers. Only four of them are in the state (out of more than 1,000 nationwide), and only one is in Bozeman. His customers -- most of whom are in high-tech centers in California, Massachusetts, and Texas -- use the systems he designs and manufactures for industrial automation or research, and there's not a whole lot of either in Bozeman.

Because of its remote location, Vision 1 doesn't provide on-site servicing of its products. That policy "forces customers to take responsibility and learn the system," says Smithgall, who does provide Internet and phone support for his products. Most of his 20 employees either grew up in Montana or moved there because of the outdoor recreational opportunities. "A lot of people make time to do things during lunch, like mountain biking or fishing," says Smithgall.


Ultimate Home Office

Business: Technical staffing service
Location: Lake Forest, Calif.
Site rationale: Staying at home

Ron Stein and his wife, June, still live in the Lake Forest, Calif., house where they raised two sons years ago. In 1995, when the couple launched Principal Technical Services Inc. (#143), a staffing service for engineering and design workers, they cleared out the old playroom where a model train set used to be and converted that space into the company's headquarters. Then, a few years ago, their older son, Russell, now 31, moved back into his old bedroom -- but only during business hours.

When he joined his parents' company as vice-president of finance and operations, Russell set up his office in the room that had once been decorated with NFL pennants and model airplanes. Now it contains two desks and two computers, since Russell shares the office with his mother, who is the company's president.

The business has three other permanent employees, who work out of their homes. When the staffers all need to get together, they meet at the Steins' kitchen table.


Following the Talent

Business: Maker of retirement-plan-processing software
Locations: Birmingham, Ala.; Chicago; and Boston
Site rationale: Pursuit of talent

When Dharmesh Shah cofounded Pyramid Digital Solutions Inc. (#121), in 1994, he had every intention of building his company entirely in Birmingham, Ala., where he had worked for U.S. Steel Group and SunGard Employee Benefit Systems. The third employee he hired, a highly prized programmer, happened to live in Chicago. The programmer commuted between the cities for a while but started to dread the weekly trip when he was about to become a father. To keep him, Shah opened an office in Chicago.

The new office also had the advantage of widening the market for talent. "There's not a lot of technology talent in Birmingham," Shah concedes. In 1998 he further expanded Pyramid, which builds software that allows customers to access their retirement plans and update or retrieve information. He acquired a 12-person retirement-consulting firm in Boston and decided to let the company remain there. Last year Shah moved to Boston himself. "I had an affinity for the Boston area," he says.

Now he employs 21 people in Birmingham, 27 in Boston, and 9 in Chicago, and he's opening a satellite office in New York City, with 2 employees. Shah says he remains committed to the follow-the-talent policy that has worked well for him so far. "Since we've already made the logistical leap to four places," he says, "we'll probably expand more."

A downside to the policy, Shaw admits, is the lack of "a small-company atmosphere." Employees don't really know their colleagues in different locations. On the upside, Shaw says, is the possibility for each office to maintain its own identity. Most of the programmers, for example, are based in Birmingham, where employees keep odd hours and sometimes wear slippers to work. The Boston office is mostly the province of consultants, who typically wear suits -- and shoes.


Transcriber Finds Staff in India, across U.S.

Business: Medical transcription service
Locations: Sterling, Va.; Bangalore, India; and homes across the United States
Site rationale: Access to labor

The founders of HealthScribe Inc. (#20) set up their company in Sterling, Va., a suburb just outside Washington, D.C., seven years ago because they wanted a short commute. But they knew that the chance of finding enough qualified medical transcriptionists -- individuals capable of transcribing medical findings, consultations, diagnoses, and reports -- in a single city was slim. So the company recruited employees from across the United States and allowed them to work at home over the Internet. Then HealthScribe hired additional workers in Bangalore, a city of 6 million people that is considered the Silicon Valley of India.

HealthScribe pays its Indian workers less than it does its American employees, says CEO Michael King. However, the company must provide its Bangalore staff with offices because they typically need Internet access, which is not widely available in India. In the United States, where online connections are much more commonplace, the company doesn't have to invest as much in office space. HealthScribe employs fewer than 100 people in its Virginia office, and those workers handle accounting, technical support, and strategic planning. The rest of the workforce, totaling roughly 900 people, is about evenly divided between those who live in Bangalore and those in the United States who work at home, in places as far-flung as Boynton Beach, Fla., and Wahiawa, Hawaii. "Any work can be done anywhere," says King.

Since the company straddles both sides of the globe, it is able to serve its customers 24 hours a day, seven days a week. There are, of course, differences between the business cultures of the two countries. King says, for example, that he sees "the domestic life of U.S. households reflected in the work flow," where production is low in the early morning, peaks in the middle of the day, and tapers off again in late afternoon, as kids get home from school. Then there's the daunting challenge of managing the Bangalore operation from afar. To relieve that burden, King recently enlisted a local joint-venture partner, the Max Group, based in New Delhi.


Please e-mail your comments to editors@inc.com.

To learn more about the Inc. 500, visit the Inc. 500 area.

Last updated: Oct 15, 2000




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