Information Strategies Ready To Gamble for Growth
By Richard McCaffery
Two years after making a business gamble on the burgeoning Internet, James Townsend wants to take his database consulting company a step further.
"The company has always been
profitable. I've never borrowed any
money and never had any debt. ...
Now I'm at a point where I
need to take some chances to get
to the next level."
James Townsend, president of
Information Strategies Inc.
Townsend is looking for $500,000 to transform Information Strategies Inc., a Washington-based company with 20 employees, into a major player in the Web development field.
"The company has always been profitable. I've never borrowed any money and never had any debt. ... Now I'm at a point where I need to take some chances to get to the next level," Townsend said.
His goal is a company with 100 employees by mid-2000 that has the resources to chase bigger contracts.
Banks and private investors likely will supply the money needed to expand the business, said Townsend, who expects to complete most of the deals by year's end.
"Right now, the market we're in is really hot. If we don't grab market share now, it's going to change," said Townsend, who declined to disclose the privately held company's revenues.
The 38-year-old entrepreneur, who started the database consulting business out of his basement in 1987, estimates that 70 percent of his 200 clients are in the government. The company's average contract is worth around $200,000, Townsend said. Information Strategies now has its offices on Connecticut Avenue in Washington and is preparing for its fourth move.
In 1996, Townsend shifted his company's focus from building databases to Web development ? designing Web sites, integrating them with databases and setting up intranets using Microsoft tools.
That change came after Townsend heard a Microsoft executive tell a gathering to bet their businesses on the global network.
Information Strategies' ties to Microsoft Corp. date back to 1994, when the company became a partner of the software giant. For $1,500 and the required certification, Information Strategies got access to free software, technical assistance from the Redmond, Wash., company, and use of the powerful Microsoft logo. In return, Microsoft got another company pushing its software.
In July, Townsend booked over $1 million worth of new contracts, the most ever for his company in a one-month period. Approximately 75 percent of that work comes from the Department of Transportation, replacing databases that are not compliant for the year 2000.
In June, Information Strategies received $45,000 to build for the Department of Agriculture a database to track how much money the federal government is spending on programs in rural areas throughout the United States. Last summer, the company got nearly $60,000 to build a database for the House Reform Committee, which was investigating Democratic campaign contributions. The database was used to track payments.
"The federal government is one big customer," he said. On the commercial side, he's done work for PepsiCo., Purchase, N.Y.; Fiat S.p.A., Turin, Italy; and Comsat Corp., Bethesda, Md.
Information Strategies is still one of the smallest partner-level companies Microsoft has in the mid-Atlantic district, said Chris Guziak, account executive at Microsoft Federal Systems.
"They're a small firm, but their people are very capable Web and database developers," Guziak said. "They're absolutely helping us, influencing some of our most important accounts."
Learning on the run is one of Townsend's strengths. He has a master's degree in foreign service but learned how to use technology in the early 1980s by mastering office gadgets and computers at the Center for Strategic and International Studies, a think tank in Washington. At the center, his first job after graduate school, Townsend was a research analyst who focused on the Soviet Union.
Townsend considers it a historical accident he went to school before the computer revolution. "Back then computers dealt with numbers, not words," he said.
"It's like we're a start-up company," he said. "Right now, we're planning the organizational chart [for the new company.]"
His expansion plans include moving for the fourth time, jumping from an office with 2,200 square feet to one with 10,000 square feet. Townsend also is looking into hiring office support personnel; his wife and business partner Marcella, a consultant, handles much of the company's financial work.