Jack Dangermond, co-founder of mapping software maker Esri, talks about how his company maintains steady, stellar growth.
This is the story of Entrepreneur Jack Dangermond, as told to Inc. executive editor Christine Lagorio.
My parents were immigrants who started a nursery as a way to get us kids through school. I learned around the dinner table about customer service and cash flow and paying bills. There's no substitute for growing up around people who actually like doing business.
I went on to Harvard and got very interested in computers and studying the earth's landscape. After school, my wife and I moved back home to Redlands, California, and started working in our own very modest way. Redlands is not a high-tech capital like Silicon Valley. But it allowed us to live cheaply in a $400-a-month apartment. We had $1,100 total when we incorporated Esri.
Today, about 350,000 organizations use our tools. We have 9,000 employees worldwide and $912 million in revenue. In our 43 years, we have never missed a quarter. We've never had any layoffs; we've never had any downsizing. It's just been very conservative, systematic growth.
One thing that has made us so successful is that we've never taken outside investment. That means we can concentrate on what our customers want--not what the stockholders or the VCs want. That's a strategic advantage. Customers notice that we are actually here to support them. And their needs help us innovate. We spend about a quarter of our annual revenue on innovation--about twice what a normal public company spends.
I don't understand why young entrepreneurs feel this pressure to take venture capital or go public. Don't get me wrong: Public companies are A-OK with me. I just think there is another way. Staying private is a lot more sane.
Sure, I have the demands of my customers. But I don't have that investment world breathing down my back constantly. In Redlands, we're out of the Silicon Valley fray, where you can get a better job if you move across the street and venture capitalists are always searching you out.
Being in this so-called backwater, we are not well known, so we don't have investors wanting to get rich out of the good work we are doing. By not, as they say, "monetizing" the company, we can concentrate on the work that needs to get done.