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Engineering success - Houston Business Journal

Engineering success
In the midst of a slow-down in the creation of start-ups, ESX Engineering has crafted a strategy for growth
Allison Wollam Houston Business Journal

Steven Spar didn't want his management team to break up after his first company went public and sold off its products, so he kept the six-member team together and formed ESX Engineering Inc. "It would have been a terrible shame for those people to get jobs somewhere else, and the fact that we were able to start with a group of people and keep them together after 15 years is extremely satisfying," he says.

Houston-based ESX Engineering provides e-business solutions and custom software application development. The company's technical team has worked together for more than a decade and a half, and many members of the management team have advanced degrees in biomedical engineering. Spar says the company's core competency is its ability to deliver quality solutions through a rapid, effective development process that's been honed over the years. Its solutions range from custom Web-based workflows for traditional businesses to complete infrastructure for start-up companies.The company's expertise and experience helped ESX bring in $600,000 in 1998, compared to a little more than $3.1 million last year. The company has grown from the six original founders to about 40 employees today.

OPTEXING OUT

Spar founded his first company, Optex Biomedical Inc., in 1985. After the Houston company went public in 1994, the key technology people wanted to keep the team together. So they formed ESX Engineering, determined to keep a strong technology focus. During his first entrepreneurial stint, Spar fine-tuned his operations techniques. It was at Optex that he taught himself how to master the art of recognizing win-win deals, how to balance cash flows and how to hire the right people.

He started ESX using personal funding, and says it initially took on bootstrap projects and grew with each project. "By avoiding borrowing in the beginning, we are nimble enough to expand now without being in debt," he says. ESX also is unique because many members of its technical staff have skills in the electrical engineering side of software, with a focus on health care. So many of them have mastered specialized tasks such as interfacing with medical devices and network systems. Most everyone on ESX's management team has some type of medical background, some of them having served in such roles as a medical technician and a physician's assistant. "Houston is a great town for medical technology, and there is a lot of demand in that industry for our knowledge," Spar says.

Still, getting the name of the company out into the industry and matching it to the needs and services of potential clients has proven to be Spar's greatest challenge in running the business. To combat those challenges, ESX has participated in aggressive marketing plans and networking events and regularly contacts customers in an effort to get more exposure and to build up its client base. Spar says the company makes it a point to stay in contact with clients through newsletters and phone calls intended to keep them abreast of what the company is doing and to remind them of the range of services ESX offers.

A good chunk of the company's business comes from preventive work done for companies that don't have the luxury of an on-site technology expert. That's where ESX steps in, checking networks and correcting any problems before they get too serious. "That has helped us gain a lot of clients because they see the work we can do and then they come back anytime they need something else," Spar says. "They also refer us to other companies who need the same kind of services."

Spar says ESX has built up an extensive technology base in an effort to help companies that aren't in a position to keep up with the constant expense of changing technology. "We work with our clients in a very consultative way. We ask them to explain what they need us to do because sometimes what they think is simple could be very, very complicated," he says. "So we take a lot of time up front to take the people through a road map of how it needs to be done."

TALENT TREE
Another challenge of managing a small, growing business, Spar says, is identifying and finding the right talent for the company. If a talented candidate comes through the door that Spar believes could be beneficial to the company in the future, he'll find a place for them at ESX. And once Spar hires people that he thinks fit the company's philosophy, he works hard to create a team environment and provide high-quality benefits. "It's important that the employees have a team environment where they can really get involved with the project because this isn't a day-to-day-type job," he says.

Although ESX is small, the company prides itself on offering employees the same benefits that its larger counterparts might offer. Spar provides employees with insurance benefits and professional development opportunities and also encourages employees to work remotely from their homes. "They can go home and have dinner with their family and do work from home through the Internet instead of staying in the office," he says.

Spar says the key to the company's growth has been strong client relationships and a reputation for following through on ideas. He says this attitude has brought the company a lot of referrals.ESX also has built up an extensive technology base that its employees are able to apply to new projects, meaning the projects eventually take less time and customers are therefore billed for less hours than they might be at another company. Spar says clients are also impressed that the employees' knowledge allows the company to be a one-stop shop for end-to-end projects. "We'll take a project and use all of our resources to complete the entire project so clients won't have to go elsewhere to get a part of the project completed," he says.

Chris DuPont, project manager at Cyberonics Inc., says ESX was the only company in the Houston area that was able to fill its technology needs. "They have a tremendous amount of experience and really have a niche expertise for the biomedical industry," he says. "We chose to work with them because they are extremely responsive, have a lot of medical experience and are the right size company for us to deal with."

NOTHING BUT `NET

Spar says last year was a strategic growth period for ESX because of the high demand for Internet space among many different types of companies. Spar noticed a demand from companies that wanted not only efficient Web sites, but also Web sites that looked good. So he hired three graphic designers to help design client sites. With the recent technology slowdown, Spar has noticed a decrease in the number of new dot-com businesses. But at the same time, he has seen more brick-and-mortar businesses using technology to become more cost-effective and efficient. "Instead of setting up new Web sites, we are helping more companies improve communications and helping them serve customers in different ways," he says. Spar says the company plans to concentrate on continuing to offer clients the high-quality service they expect while staying ahead on the technology track and identifying new niches. "We're very, very market and customer driven, and we grow when an existing client needs to grow," he says.

awollam@bizjournals.com 713-960-5936

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