Fat contracts, seven chickens and a cat

Proactive Software reaches international markets from rural Christchurch and Auckland

Visit ProActive Software's website and it looks like you are dealing with a successful mid-sized US company. You would hardly suspect that this is a Kiwi operation involving four people, headquartered in the rural outskirts of Christchurch in a small residence with seven chickens, a turkey, two horses a dog and a cat. Yet the company is successfully taking their ProWorkflow product to the international market, and getting major wins both locally and internationally.

"It's a number-eight wire solution," says director Julian Stone. "The key to looking large is to focus on the top 20 competitors and ignore the rest. We then advertise where they advertise — but only where it reaches major customers." This saves a lot of money, as well as ensuring that ProWorkflow is always mentioned in the same context as the major players.

But ProActive has more than one string to its bow. It also uses a highly professional, interactive website that is hosted in California. With California's massive bandwidth availability, this helps the site to operate efficiently at all times as well as providing a US presence.

ProWorkflow is a workflow management tool being provided on an ASP basis — another reason for using the high-bandwidth California-based solution. The product is designed to operate as a lower-end project management solution for companies requiring a simple, intuitive method of tracking, managing and invoicing time spent on project tasks. It has some serious competition in the market, but has held its own among the top 20 players through pricing and attention to customer service.

The company consists of Stone, who handles business issues, and technical director Alan Barlow, based in Auckland, who looks after the Cold Fusion code. Stone's wife Sarah handles customer relations, and business mentor John Walley of the Canterbury Manufacturers Association helps to ensure the business keeps running straight.

ProActive is a virtual company, operating without expensive offices, extra employees or business services. “Alan and I haven’t seen each other face-to-face more than five times in the past three years, “ says Stone. “The whole business is virtual, based on the latest mobile communications and Internet tools.”

ProActive focuses upon efficiency as a critical business issue. Its highly automated website provides extensive information on customers, including tracking who downloads software and how many days are left in free evaluations. "The website is rigged to notify us by sending an SMS cellphone alert when an order is placed or when consultation is required," says Stone. "Because a lot of our customers are overseas, this often means getting up at 3am to provide an immediate response."

The ProWorkflow product now has thousands of users in 15 countries, across a wide variety of industries including creative studios, development house, education, architects, military, financial markets and cleaners. Payment is on a per-user subscription basis, so it is suitable to any size company or department, and ProActive is also providing customised, self-hosted versions for clients needing special features.

"A big recent win was UDC Finance," says Stone. "They wanted something tailored to a finance operation. In the next phase of development, we will be releasing a number of special versions aimed at vertical markets."

The current client list features well known names both locally and abroad; the likes of HairyLemon, UDC and Innovative Media here, and AT&T, the US Coast Guard, Arizona Health Board, Dell, Pitney-Bowes and many others overseas.

"One part of our development philosophy that has proven highly successful is focusing upon solving the business problem first, then working out the technology," says Stone. "A lot of development companies only talk to the managers; we try to talk to the actual users."

Stone comes from a design background, with his other company, GoFX, still running. He wrote the initial application on a Palm Pilot, then called in Alan Barlow to develop the product. The company has little overhead; it achieved a six-figure income last year. With a simple subscription model, revenues are continuing to rise. It is continuing to refine its business model.

“When we started, we offered code download as the main sales avenue, but we are now moving entirely to an ASP/subscription model,” says Stone. “Providing code did, however, get us into a lot of development organisations, and many of them have become customers as well as occasional collaborators.”

Developing a successful company to compete in international markets is not easy, and Stone and his partners have taken advantage of outside help wherever it could be found.

"The most important thing that we discovered is that good advice is much more important than money," says Stone. "You could add $100,000 to the business, and it would be wasted if you didn't have the right business model."

The greatest boost came from enlisting the mentoring help of seasoned entrepreneur John Walley of the CMA. Stone also advocates taking advantage of all the free and low cost business training offered by the likes of the Canterbury Development Corporation (CDC). He has stayed well away from grants, however.

"We investigated grants from various sources," he says. "The major problem is that the providers wanted too much control, often taking as much as 51%. We didn't think that we could get the business off the ground unless we had full control.

"Another thing that we looked into was the incubator idea, but these opportunities also sought more control than we wanted to give away, and also required work in a fixed premises. We are a virtual company, with people here in Rolleston and in Auckland, and occasional developers all around the world. Sometimes, we need to respond to clients in the middle of the night so the fixed premises model wasn't for us."

As a result, the company was started with nothing but sweat equity, and its only "permanent" site is the server in California. Communications are kept alive with cellphones and through the web, and business continues to grow.

Stone's advice to would-be entrepreneurs? "Focus on creating good business processes. Systematise everything. If you do that, the product itself becomes almost irrelevant."

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