Dynamic duo hit IT jackpot

By Yoke Har Lee

Three years ago Craig Soper and Andrew Cardno started a software consultancy using Mr Soper's PC and Mr Cardno's living room.

Now their Wellington-based Compudigm has taken off in such a big way that it is a multimillion-dollar company.

It is being streamlined into two main business units - one under Mr Cardno for retailing and gaming solutions and the other a new product development division headed by Mr Soper.

In December, the new product division launched the Postcode Allocator and will soon introduce OceanTrek for navigation and data capturing.

The company is looking to increase its staff from 25 to 100 across three countries by the end of next year, mainly to accommodate expansion in the gaming solutions division.

The two founders, working 80 hours a week for the first 18 months on very low salaries, quickly realised that, to see the kind of growth they wanted, they would have to move into specialist areas and develop products rather than one-off consultancy solutions.

In the past three years the Compudigm group has concentrated on developing software in the areas of casino management and retailing.

"Overnight, we have developed an international reputation in the gaming industry," Mr Cardno said.

In December, Compudigm launched the Postcode Allocator, software which helps companies with a large mailing database to apply postcodes and addresses.

Said Mr Soper: "The differentiating factor about the system is that it uses artificial intelligence to attach the postcodes to the letters and actually validates the addresses for the clients.

"So that's the co-functionality which lets us get 95 per cent accuracy."

A test with an Australian geographical information systems company using a conventional coding tool had a 53 per cent accuracy reading.

Mr Soper said the system would help companies to save between 5c and 28c on each bulk-mailed envelope.

And companies, he reckoned, would have recouped their investment with the first use.

What an Australian client found attractive about this product was the demographics profile that can be built into the software as it sorts the mailing database.

"We can tag the client's database with a demographic information. This can be used for analysis. One of our clients in Australia has a database of 700,000.

"Since we have tagged the location of its customers, we know where they live.

"We would now be able to take that census information, create a profile of profitable customers for the client and then look for areas in Australia where the profile might be the same and target those customers."

There was no similar system around, Mr Soper said.

Conventional geographic coding software runs basic coordinates which tell the program to map locations. Compudigm's programs incorporate fuzzy logic and search functions. This helps to check, for instance, spelling errors in the database, which conventional geocoders cannot do.

The development to commercialisation took 10 months and finished in December.

The New Zealand Fire Service will also use the geocoding feature for 400,000 records to help analyse fires and callouts by location.

Next, Compudigm aims to set up the Postcode Allocator product on the internet.

"We have a test site up and running, and within a month we are going to have it as a service on the internet," Mr Soper said, adding that customers would have the option of directing data to the company via the net.

Mr Soper recalls the tough days he and Mr Cardno went through developing the company.

"We did what we did on no money. We were both broke and we did 80 hours a week for a year and a half to two years ... It was all blood and sweat."

Previously, Mr Soper was geographic information systems developer for the Te Puni Kokiri (the Ministry of Maori Development) and built the Maori land information database.

Mr Cardno had worked in Critchlow Associates, a commercial software engineering house.

Their first breaks came from the Ministry of Fisheries and from the Tainui Trust, which commissioned Compudigm to build its geographic information systems.

"We started in January 1997 and were just doing basic consulting work," said Mr Soper. "Then I got us a few contracts to start with.

"It soon became apparent that to reach the high-value chain that we are after, we had to be specialised.

"We were looking for repeat business. And you don't get multiples out of consulting; you get that out of doing what you have done again.

"From there we made a conscious decision to say we want to get multiples on what we do."

Honesty, integrity and having good business acumen were important for those wanting success, Mr Soper added.

"You also need to be good at what you do, have a reasonably good reputation in the market and be focused on what you want to do."

Day-to-day, there were lots of business issues to deal with, he said.

One was cashflow. "It is great to have a healthy sales figure in your books, but you will realise people pay you 40 days after you have invoiced them."

Mr Cardno - whose business career started when he was 8 selling pinecones for $2 a bag door-to-door - said his growth as an entrepreneur could be attributed to two factors - the ability to lead and the ability to learn.

"I had to grow from geek to an entrepreneur.

"It was an enormous amount of learning."

Mr Soper said Compudigm's strength was in its research and development team.

Some 15 of the 25 people at Compudigm are dedicated to research, and many have doctorates in mathematics and physics, among other disciplines.

Only two have computer science degrees.

And since the company started, there has been no staff turnover. Mr Soper attributes that to the exciting development going on within Compudigm.

Because of its innovative streak, Compudigm has attracted investors.

"We've had people, some high-powered businessmen, come along and say, 'Wow, this is a pretty exciting idea and we would like to be a part of this company'," said Mr Soper.

Compudigm's chairman, Don Bourke, is one.

He spent eight years as Australian Consolidated Press financial director, saw Compudigm's work in the Australian retail scene and came on board.