Inc 500 Profile
David B. Becker leans forward in his chair in the first-floor conference room of re:Member Data Services Inc. and slips a new $20 Cross pen between his fingers. The pen is squat and rounded, and when Becker writes, it moves deliberately across the page, leaving a loopy, girlish cursive in its wake. During the entire 90-minute meeting -- a gathering of sales, marketing, and IT honchos discussing a new software interface -- the CEO writes just 10 lines and says almost nothing. If you were searching for the quintessence of entrepreneurial dynamism, you wouldn't give Becker a second look.
And you would be wrong.
Becker is an entrepreneurial powerhouse. He is the CEO of four fast-growing companies: $9-million Virtual Financial Services Inc., or VIFI (#100 on this year's list); $13-million re:Member Data Services(#223 on the 1986 Inc 500 list); $3.9-million First Internet Bank of Indiana Inc.; and $750,000 Inception LLC. "The companies are kind of an extension of the family -- they're my children," says Becker, explaining why he is a simultaneous -- rather than a serial -- entrepreneur. "As they grow up and mature, you don't disassociate with them. You hang on to them." (All four of Becker's "kids" are in Indianapolis, which keeps his life borderline manageable. Still, until July, when two of the companies moved in together, the CEO's navy Mercedes convertible was logging some 500 miles a week along the flat, hazy asphalt of Interstate 465.)
What makes Becker so impressive, though, are the mental peregrinations he goes through to keep four distinct and sizable entrepreneurial balls in the air. His mini-empire is built on a stable foundation of business and management strategies that -- like Russian nesting dolls -- allow him to get bigger and bigger. Meanwhile, Becker's personal-productivity tactics make it possible for him to spend at least some time with his real kids -- five of them, ages 3 months to 18 years, from his four marriages. Running companies has "cost me a lot of marriages," Becker admits. "I kept trying to convince the spouses that having a company as a mistress is better than having a real mistress, but nobody quite appreciated that."
NOW YOU SEE HIM, NOW YOU DON'T: Before two of David Becker's four companies moved in together, the CEO logged some 500 miles a week driving from site to site.
Becker may still be working on the formula for an idyllic family life, but he has perfected his business-building rules: apply existing resources to nascent ideas, deploy key staff members to new ventures, and rely on an arsenal of time-management tricks to stay on top of what he needs to know -- and only what he needs to know. A day spent tracking this CEO around Indianapolis demonstrated how Becker seizes ever larger handfuls of life without losing his grip.
When it comes to starting companies, Becker practices a kind of diagonal integration. His new businesses have some relationship with his old ones, but those relationships don't tend to be strictly vertical or horizontal. Re:Member Data -- which Becker founded in 1981 with a $5,000 loan from his father, credit-card debt, and a client-financed $370,000 mainframe -- is the oldest of his holdings, the seed from which the others sprang. The company provides data-processing services, such as loan calculations and check processing, to 108 credit unions across the county.
In 1995, Becker began incubating VIFI on re:Member Data's turf. VIFI, which Becker financed with $25,000 of his own money and a $100,000 line of credit, provides Web-development and -hosting services to banks and credit unions. It plays the front end to re:Member's back end, enabling a credit union's customers to bank, pay bills, and even trade stocks online. Becker has kept the two companies separate so new customers won't perceive the installation of one service as the entrée for the other, though in fact it is. In July the companies' distinctness became even more theoretical when VIFI and re:Member Data were reunited -- this time in VIFI's 60,000-square-foot concrete-and-glass headquarters on Innovation Boulevard, in the far northwest corner of the city.
Becker's third company is across town from his first two, and even further removed in terms of workplace atmosphere. First Internet Bank, an online-only bank with 20 full-time employees, occupies bland gray office space that's not even 5,000 square feet. It has a reception area with a telephone but no receptionist, and a 2.5-foot-high Liberty Safes vault that sits empty in a locked closet. (A vault is a requirement for FDIC insurance.) A massive speakerphone dominates the conference table that nearly fills the boardroom. With its vacant halls and hushed atmosphere, First IB is the definitive virtual company.
Becker launched First IB in 1999 with $1.2 million of his own money and a $14-million capital base raised from investors. (It's the only company he doesn't own 100% of; regulatory requirements cap his stake at just over 5%.) Essentially, First IB is a merging of the products developed at re:Member Data and VIFI. The re:Member Data software constitutes First IB's number-crunching back end, and the VIFI software makes up its graphically spectacular front end.
First IB outsources its technology requirements to its progenitors, paying them through intercompany billing. If the bank wants to develop a new concept -- say, accounts that can be set up instantaneously -- it gets priority over other customers because Becker controls its software vendors, too. The benefits swing both ways. "The bank is almost a working laboratory for the other two companies," he says.
The outsourcing possibilities inherent in multiple ownership have served Becker well. Each time the CEO starts a new company, he farms out nearly everything to his established companies. For example, until receiving its charter, in 1997, First IB was run out of a single office at VIFI headquarters and used the human-resources, payroll, and accounting resources at re:Member Data, paying that company what it would have paid nonrelated providers. Likewise, Inception, a four-man operation that Becker founded this year to provide mentoring and up to $1 million in financing to new Indiana-based businesses, inhabits a single room at VIFI and draws on re:Member Data for human-resources, payroll, and accounting services. "Re:Member Data has been the backbone that provides the infrastructure to start up the new companies," says Becker. "It allows us to get services without having to hire and train new people. And then, as we start adding people to the new companies, we separate the re:Member Data people back out."
"My management style is to swing a lot of rope. People will either hang or swing on the other side."
Economies of scale extend to the inanimate realm. Now that re:Member, VIFI, and Inception all live in the same building, Becker can purchase a single enterprise license for his Microsoft operating system, which not only saves money but also provides more-robust versions of tools like word-processing and E-mail. The telephones run on one huge switching system. The three companies also share dental- and health-insurance plans, 401(k) products, and long- and short-term disability and life-insurance programs, which means more-comprehensive benefits at a lower cost to employees. And then there are the entertainment perks that Becker raffles off: box tickets to concerts and a $150,000 suite at Conseco Fieldhouse for events such as the Pacers games. "When you can spread benefits over three or four entities," he says, "you can do better and larger things for your employees."
Becker is just as smart about arranging his people as he is about arranging his companies. In fact, success with the former makes success possible with the latter. Top employees follow Becker from one venture to the next. For example, Greg Feigh, a telecommunications specialist once at re:Member Data, now fills that role at VIFI. And Becker plucked marketing director Nicole Sunkel from VIFI to get First IB off the ground, charging her with developing an institution with $100 million in assets within two years (a goal she met in nine months). "I take a couple of core people with me to seed the new employee base and to carry my philosophies forward," says Becker. "My philosophy, which I've drilled into everybody's head, is, Always hire the person who can replace you."
Although Becker's top employees are transferable among companies, the CEO recognizes that his own management style is not. The businesses differ not only in maturity but also in culture. "At VIFI the focus is very visual," says Becker. "It's the MTV world put to business application. There are new browsers, new tools, new services every day, whereas we'll do releases in the re:Member world maybe twice a year. The companies require two very different thought processes."
The bank, too, has a distinct personality. People, not technology, are its primary focus, and it markets directly to consumers, not businesses. "First IB is very one-dimensional," says Becker. "We focus purely on the delivery of the product and the service side." Inception has the mien of a tiny VC firm: it analyzes products and services rather than creates them.
Consequently, Becker the boss at one company behaves differently from Becker the boss at another. At re:Member Data, for example, the CEO is relatively hands-off. Programmers are given ideas and allowed to run with them, with Becker checking in on projects only occasionally. At VIFI, on the other hand, Becker functions almost as a project leader, meeting with developers every couple of weeks. "For most of the people at VIFI, this is their first job," says Becker. "They have the technical ability, but they don't have the experience and the direction yet." His behavior at the bank, with its multitude of regulations, is even more hands-off. "I'm the outside person for the bank, the persona," says Becker. "I raise the funds, do the public relations."
But it's not just Becker's ability to adapt to his companies' distinct managerial requirements that keeps his four businesses growing at such a rapid clip. (VIFI alone expanded by 2,353% over the past five years.) He also gives his staff, particularly the four handpicked point people who are his direct lines of contact, tremendous autonomy. "I instigate the issues, and then my management style is to swing a lot of rope," says Becker. "People will either hang or swing on the other side."
Two of Becker's anointed four are Jim Hutchins and Dan Sanders, the IT wizards at re:Member Data and VIFI, respectively. The CEO talks with them at least three times a week, either inquiring about the projects each is overseeing at his company or seeking the opinion of one about a project of the other. The remaining two are Sunkel, whom he consults about the marketing plans for all four companies, and Phillip V. Kryder, the longtime chief financial officer at re:Member Data, who scrutinizes the businesses' financial data. Becker talks to Sunkel and Kryder several times a day, usually by cell phone.
The quartet functions as a sounding board and a system of checks and balances to Becker's executive role. "It goes back to long-term relationships," he says. "Nicole has been in all the organizations. Phil played a kind of interim CFO for VIFI and the bank. They're people I can trust."
Becker's schedule is carefully orchestrated, which is critical because he encounters a dizzying amount of information every day. At Inception alone he's like Alice being barraged by a deck of cards -- business cards from start-ups eager for help, that is. To organize the particulars, he relies on electronic devices: E-mail, to track progress at his companies through memos cc'd to him; an Outlook calendar that is updated throughout the day; a Palm Vx to keep the calendar current and to read E-mail and capture voice messages when he's on the road; and a cell phone that is on 24-7 and in use almost constantly in the car. But he also uses surprisingly archaic tools -- principal among them a white lined five-by-six-inch pad on which he scrawls random thoughts and a to-do list he composes before leaving work each night. "Being a visual person, I write down a couple of key words," he says. "I have phenomenal recall. I can almost replay meetings [from a few words]."
Becker also organizes his days to leave the most possible time for big-picture issues. Monday through Friday he gets up at 5 a.m. and by 6:15 is perusing his E-mail from home. (Each company has its own E-mail system, but messages for Becker from all four dump into a centralized mailbox.) He's in the office by 7 and uses the next hour as "quiet time," a chance to review a business plan for Inception, say, or some new software for re:Member and to coordinate his day. Then the real work begins. "I don't get into the micromanagement," says Becker. "I bounce around, look for hot spots. If something blows up, [the people in charge] call on me."
EAST MEETS WEST: Re:Member Data's 120 baby-boomer stalwarts joined VIFI's 120 Net Gen employees recently at the latter's headquarters.
Every week, the three larger companies each hold a vice-presidents' meeting; Becker is the only person that attends all three. Once a month, the vice-presidents pull out a strategic plan drawn up earlier in the year to see how the companies measure up. They also provide Becker with monthly graphic reports that compare current activity in key areas -- sales, product delivery, research and development, customer service -- with activity during each of the preceding 12 months. "If a key indicator starts to take a dive, then we have discussions over the next 30 days, before the next report comes out," Becker says.
Becker's workday winds down at about 7 p.m. -- or at least it's supposed to. One night after re:Member Data's move into the VIFI building in July, he was still at the office at 7:30, unpacking among cables that spilled out of cartons like spaghetti at a high boil. The CEO called his wife, Christy, to tell her his predicament. The response? "We're eating dinner and you're not." "So, a little bit chilly," says Becker.
It wasn't the first time Becker's gotten the cold shoulder. At this point the entrepreneur has had as many wives as he has companies. The first marriage lasted for two years; the second for about six months. "I used to count anniversaries by months so I could get to double digits," he says. (Three of Becker's children live with his former spouses; the other two are from his current marriage, which he has been in for five years. "I'm locked in this time," he says.)
But if Becker has achieved stability in his personal life, his desire to launch businesses remains unchecked. Recently, Michael Levine, a pediatric neurologist and president of LSW Software LLC, met with Becker to discuss the possibility of Inception's providing him with financial and business help. LSW makes software that uses voice-recognition technology to fill out the reimbursement forms for health-claims processing. If Becker likes the product, he may suggest that Levine license it to him. That would make Levine's software the first product offering in company number five: a medical-services marketer and distributor.
"I'm not really driven by the money game. It's not 'Go build something, sell it, take the money, move on," Becker says. "The money's nice, and it's kind of a report card, but it's not the motivating factor. I enjoy building something, seeing it grow, seeing it mature."
Thea Singer is an associate editor at Inc.
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