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A conversation with Greg Frankenfield.
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This month we're pleased to present a conversation with Greg Frankenfield, President and CEO of Magenic in Minneapolis. Founded in 1995, Magenic is a technical consulting firm focused exclusively on Microsoft technologies.
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How did you get started?
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After getting an undergraduate degree in chemical engineering from the University of Minnesota, I enrolled in the university's business school, getting an MBA in information systems. From there I held classic IT jobs at Proctor & Gamble and then management positions at General Mills, including R&D IT manager and the technical project manager for the installation of SAP. After a brief interlude at a small sales force automation company, where I met my partner Paul Fredman, the two of us chipped in $20,000 each and started Magenic in the basement of my house. Garage startups are a West Coast thing. In the Midwest, it's the basement where entrepreneurs get started. From the beginning we set out to focus exclusively on Microsoft development and to make our company a great pace for people to work. Now, 13 years later, with 275 employees and revenues in the neighborhood of $43MM, we remain true to these principles.
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Why have you done so well?
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The things that I attribute to our longevity are:
First, you've got to be able to sell. You can't depend on contacts, networks; you've got to be thinking about how well you sell your product or service. The number one thing technical people fail at is thinking the world will beat a path to their doorstep because they have a good idea. It just doesn't work that way.
Second, you've got to find your niche. Whatever it is, whatever product or service you choose, you've got to focus on doing it well. Too many people want to taste every opportunity that comes in the door. The nice thing about sales is that it brings in opportunities. The negative part is that it drags in anything.
Third, never, never, never try to win on price. It's a sucker's game. Create value or get out of the business.
Fourth, overriding all this is to treat people with respect and expect them to be adults. I don't like bureaucracy so I try to hire people that actually want to be responsible for their lives and their careers.
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What's your outlook for 2008?
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The overall outlook for 2008 is interesting. Intellectually I believe it is going to be an average year. If I was to budget from a zero-based budget I would say a business my size could probably expect to comfortably grow 15%-20% year over year, which in the IT industry is about average because we're a smaller firm. For us, I think we'll beat that rate as we're budgeting for a 25%-26% growth rate. We're more bullish because we play exclusively within the Microsoft space and specifically within development and services. And Microsoft has been on a tear with new technologies and products that look to really bolster our position."
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What are the blips on the horizon?
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For the industry, I see four growth inhibitors. First, we're resource constrained. We've been told for the last five years that everything is going offshore and guess what? It's not. We can't find enough people domestically to work and this is driving up demand prices as well as recruiting costs. Second, we're skills constrained. There's an avalanche of new technologies that just keep coming, and keeping our skill set current is absolutely critical. Third, is showing the value of differentiation. As an IT services firm, I'm concerned about we differentiate Magenic and how we continue to show value in the marketplace. Fourth, is delivery. Quite frankly, customers have a low expectation of quality because we meet customer after customer that's already been burned twice before we get there.
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What's got you intrigued?
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There's an interesting trend that I'm following. In the 60's, 70's and 80's and early 90's innovation in the IT space came out of data centers. Businesses would order something up, refine it and when it got good enough, it made its way to consumers. Over the last 3 to 5 years innovation has shifted out of the data center and into consumer spaces first. And businesses are trying to figure out how to apply it. I use examples like Facebook and My Space. These are interesting collaborations in human social networking tools that have no analogy in business, yet businesses have many of the same problems. One of the challenges is looking at the consumer marketplace for IT and seeing what you can apply to your business.
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You may email Greg or visit Magenic at www.magenic.com
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"The number one thing technical people fail at is thinking the world will beat a path to their doorstep because they have a good idea. It just doesn't work that way." |
| —Greg Frankenfield |
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