Tell us a bit about your background.
I have spent the past 23 years in the technology sector. Prior to forming Hosted Solutions, I built regional Internet Service Provider MPInet (Orlando, FL) that I was fortunate enough to sell in an all cash transaction in 1999 (when tech companies were flying high). After selling MPInet to DURO Communications I joined DURO and helped them complete over 40 acquisitions in 18 months. Left DURO in early 2001 and hired an Investment Bank to scour the country for Data Centers that had fallen on hard times, which brought me to Raleigh, NC. In June of 2001 I acquired Data Center operator Utenzi out of bankruptcy for $375,000. Immediately changed the name and spent the next 10 years growing Hosted Solutions until ultimate sale to Windstream, an S&P 500 company, in December 2010 for all cash transaction for $310 million.
What do you spend your time on these days?
Recently retired, but just completed investment for home and 55 acre development in North Raleigh and plan to start selling home sites soon. Plan on taking time off for a year or so before looking at any other opportunities. Truly believe that now is an incredible time to acquire select real estate assets. Prices are seriously dislocated from true intrinsic value. Remember, there is always a bubble somewhere, whether today in Real Estate or 2001 in Technology meltdown. Buy when there is blood in the streets!
What connections do you have to Duke?
My daughter is a Freshman at Duke.
What do you think have been some of the keys to your own career success?
Building technology companies from scratch that focus on brick and mortar fundamentals, ie cashflow, customers, sales, service, and operating metrics, while mixing in a strong Entrepreneurial spirit that empowered employees to flourish and grow.
What types of businesses are you attracted to? Are there key industries, markets, or characteristics you look for?
Great question, and easy answer. Technology companies that focus on recurring revenue, preferably with long term contracts, high barriers to entry, and low customer churn. Telecom, Data Center, Wireless, and Software as a Service companies will all continue to flourish. All these companies experience significant flow thru cash flow as they scale their business, and banks LOVE to finance companies with stable customers and recurring cashflow. These types of companies will always have attractive exits if they build their business correctly.
Many students wonder if they can get started as an entrepreneur while they are still in school. What advice would you have for them?
10 years ago I would have said to stay in school. The barriers to building a business back then were significant. Today, you can outsource all parts of your business and bootstrap a company for pennies compared to years ago. Cloud computing, CRM, financials, etc. now can be bought on a per use, monthly basis. It is a great time to build a company that can be bootstrapped yet still have enterprise level computing, software, voice services, etc.
If you had one piece of advice for students that are pitching to you in the Duke Start-Up Challenge, what would it be?
Take a finance/accounting course, and truly understand the start up costs and operating expenses of the business. Also have a strong sense of how you are going to acquire customers and what channels you plan to use to acquire them.
Anything else you'd like to say to the Duke students out there?
There has never been a better time to build a business. Now go do it!
Rich will be one of our Finals Judges on March 31, 2011. Learn more