The next wave: a genius at delivering the goods

By ADAM GIFFORD

Genie Systems' new offices in a medium-rise building are filled to overflowing. Sales and administration staff push their desks closer to make room for new arrivals.

Developers squeeze themselves into one large, odd-shaped room and get on with building the next version of the company's OrderWare online procurement software.

There's no room for large desks and executive offices in a company which has gone from seven staff at the beginning of the year to 53.

Not all are in Auckland. Eight are in Australia and six in the United States, including chief executive Mike Hendry, who has based himself in San Francisco and airport lounges between there and Auckland as the company tries to break into the North American market.

Software developers from around the world are lining up to work on an electronic commerce product which is delivering what other vendors are still promising.

The new North American sales team, in Auckland last week for induction, show the calibre of people Genie is attracting, even though it has, as yet, only one US customer, the Babies'R'Us division of retailer Toys'R'Us.

All three are industry veterans. Bill Gustaveson has just come from the leading customer relationship management software company Siebel Systems.

Bob Sullivan and Alan Belcourt come from systems integrators, and have been in the business of convincing companies to buy custom solutions offering the sort of functionality Genie delivers in a package.

"Coming from Fortune 100 companies, I've seen a lot of B2B [business to business] and B2C [business to consumer] solutions provided to the big boys in the past 10 years which mid-market companies - anything with less than $1 billion in revenue a year - can't afford or manage," Mr Gustaveson says.

"What I saw at Genie was the ability to supply an end-to-end collaborative solution for any size business, big or small, which is affordable and allows them to truly manage their business with a global view of their business and their customers.

"Genie is probably ahead of most companies I have seen in the US. I saw an opportunity to get in with a company I am absolutely sure is going to be one of the leaders in this space."

The Americans are also impressed with the Mt Wellington company's culture and its willingness to listen to ideas.

"For the past five to eight years what I've seen in most American companies is that the drive for market share is so strong they become turn-and-burn organisations - let's get the contract signed and get on to the next sale.

"They forget the most important thing is that you take care of customers and everything else will fall in place," Mr Gustaveson says.

Despite being a young company - the original software was written in 1996 and the company was formed in 1998 - Genie Systems has assembled an experienced management team.

It's the second software company chief technical officer Peter Garden has started.

In 1984, while living in England, he created Cashlink, an accounting software package for small businesses, which he sold in 1992.

After returning to New Zealand and working in corporate IT, he and fellow Cashlink veteran Darren Riley, now Genie's chief software architect, started work on a new product.

"We saw an opportunity in the problems mid-sized businesses had trying to handle issues like taking orders from reps on the road, remote branches or direct order entry by customers," Mr Garden says.

"These things were extremely expensive to achieve in the old days because you needed leased lines and PDAs [personal digital assistants] or their precursors.

"If you were a company with $10 million turnover you couldn't afford to do it.

"So there was a huge gap in the middle market, and the internet offered a way to provide those three particular types of function which previously only the biggest companies could afford."

After selling a couple of copies of the original OrderWare package, in 1998, the pair pulled in former IBM executive Mike Hendry and formed the company.

"We realised we were not marketing sales people," Mr Garden says.

Genie Systems has always focused on business-to-business solutions, and it has known its future was in exporting, so its products must be globally applicable.

It has had a salesperson in Australia for more than a year, targeting systems integrators as much as customers.

It is important that the company builds good relationships with systems integrators and ASPs (application service providers), who can serve as a channel for selling and implementing the software.

It already has customers through Unisys ASP Services.

"We're trying not to build up huge project implementation capability internally. We want to manage it through partners and systems integrators, but we don't want to be doing direct selling and implementation for the rest of our life because we will never grow," Mr Garden says.

Those channels are also more suited to the mid-market customers OrderWare is targeted at. While the software can scale up to huge sites such as Toys'R'Us, Genie Systems wants to avoid going head to head with industry leaders such as Ariba and Commerce One.

Local sales have been helped by OrderWare's relatively inexpensive price - perhaps $150,000 to $300,000 for a sales or procurement system, compared with $1 million plus for top tier American packages like Ariba.

"Our sales are typically $100,000 to $1 million."

Mr Garden says the company is concentrating on four development areas: procurement, catalogues, supply chain integration and data integration, allowing OrderWare to work with whatever back-end systems a company may have.

"One of our strengths in this market and in Australia is we cover the whole range of e-commerce," Mr Garden says.

Phil Norman from venture capitalist Strathmore Group, which has a 16 per cent stake in Genie, says his company is extremely happy with its investment, and is actively considering whether to invest more in the second round of capital raising now going on.

"With young companies, ability to execute on strategy is critical. In the Genie team there is a great deal of experience both at the technical and the marketplace level."