07 Mar Connecture's Maynard finds IT business opportunity in adversity
Waukesha, Wis. – As the web-centric business sector continued its crash in 2001, the directors of an East Coast company were contemplating the shutdown of their Wisconsin-based business unit. Their decision was only delayed when the events of Sept. 11 forced postponement of the board meeting in New York scheduled for that tragic day.
When the fateful meeting finally took place a month later, Dan Maynard pleaded with board members to keep the division going, but lost out. The operation, still in its early growth stage but with its 40 people in Waukesha and another 10 around the country, was to be shuttered.
The sudden turn of events was anything but the end of the line for Maynard. It would be a new beginning, prompted by a phone call from a customer who lost service via the shutdown. “I thought to myself, ‘I’m starting a business,'” he said. And he did so, forming a company within 24 hours to serve the client who had been left in the lurch.
The new company was quickly named Riverwood Solutions, with the “Riverwood” being borrowed from the Waukesha, Wis. office park that housed his office. “The Riverwood name and picture of the office building would portray stature and stability,” Maynard recalled in a recent interview.
Next he and his two partners, Robert Barry and Rick Gallagher, acquired the assets and intellectual property of the shuttered operation from the parent company, Workscape, a business with a primary focus on human resource self-service software.
Maynard had a client, an office, a company and a business name. All he needed to do was secure more clients – and inform the staff of the terminated division of all that had transpired. He did so, keeping all of the non-executive employees with his new company.
Competition was heating up
The risk paid off as the new company made a profit in its first quarter, continuing its focus on providing web-based sales, service, and processing for large health plans. As Maynard and his business partners were building their company, competitors were doing the same, and in some cases, doing it with more resources.
“The market was turning up, but we could not effectively compete without more capital,” he said.
By 2003, Maynard said the options were to sell Riverwood, infuse it with capital, or merge with another company. A broker was engaged and found a potential buyer for the profitable, $4.5 million operation. Simultaneously, Maynard led a search for capital, resulting in a financing proposal from a Wisconsin-based venture fund.
“I didn’t have a lot of faith in the buyout; we were still young and small,” he said, noting the company was just over a year old. Amid discussions with his business partners, Maynard proposed approaching a major and bigger competitor, Atlanta-based Connecture, which had just recently raised $6 million in investment capital.
His vision would combine Riverwood’s strong emphasis on product development and Connecture’s market stature. Merger talks began, with Maynard encountering a different approach to business at the prospective partner.
“Riverwood was product-focused; Connecture wasn’t,” he said, noting Connecture’s consultative business model. “We were two successful companies doing the same thing in very different ways. Clients who came to the Riverwood office loved to see that we were software engineers focused on technology R&D,” he added, “while the Connecture team’s clients benefited from their implementation methodology and tailored solutions.”
But the deal went through in early summer, 2004, with Maynard being named president and CEO of the combined operation in October of that year. His first order of business was to cut out the duplicity and start leveraging the combination’s strengths.
Soon, the benefits of the merger did create a stronger company, with revenue growing 55 percent in 2005. Connecture is tracking to do $30 million in business this year, with about 180 on staff in Waukesha, Atlanta, and India.
The company serves 10 of the nation’s biggest health plans and recently expanded its product line-up to serve smaller plans as well. Connecture has somewhat quietly become one of Wisconsin’s largest software companies.
The education of Dan Maynard
Connecture did not reach that stature by chance. Although Maynard’s formal education is in management information systems, much of his success can be attributed to his business skills learned throughout his career. He acquired those skills through his willingness to listen and learn from mentors and advisors and a drive to succeed. Those, combined with his comfort with risk and serving in different leadership roles, are all traits honed since his early days in the working world.
Those early years gave him exposure to a variety of entrepreneurs in the Milwaukee area – a video store owner, a furniture store owner, and the founder of a medical records copying business. Each of those people had traits and approaches to business that Maynard found appealing and selectively adopted – from the fun-loving freedom of the video store owner to the disciplined, strategic, exit-oriented plan of the medical records company founder.
They weren’t just jobs to him; they were learning opportunities that fed his natural curiosity. The medical records job would prove particularly valuable, teaching Maynard medical terminology that would serve his future software technology ventures.
The jobs had another impression on him, as well: “I found out one thing for sure, and that was I wasn’t going to work by the hour.”
Opportunity knocked early
His first programming job was with an eight-person medical software company – a job that was short-lived as the company went out of business eight months after he started. But the loss of that job was opportunity. Maynard took a position as a programmer with a health insurance company in Brookfield, Wis., eventually rising to the position of director of information systems.
While the work was expanding his industry knowledge and giving him job security, it also was testing his entrepreneurial nature. “My aggressive approach to business didn’t fit in that corporate structure,” he recalled. The predicament would resolve itself when a large third-party claims administrator based in Tampa, Fla., bought the company in 1996.
With little warning, the third-party claims administrator eliminated the Brookfield IT positions. Jobs in the area were plentiful, but Maynard and a core group hung around to wind down local operations. The company wanted to retain his services under an extended employment agreement, but he was uncomfortable with the loose commitment. At the same time, he saw opportunity.
In a bold move, he declined the employment offer and negotiated a business contract with the very company that terminated his operation. He was on his own, jump-starting Computing Concepts, Inc. (also known as CCISoft) that day in 1997. With a pregnant wife, two children, a mortgage to pay and no savings in the bank, the timing might not have been perfect, but Maynard trusted that his industry knowledge would help him not only make a living, but build a company with value.
He tapped into credit cards and home equity to keep the business going and pay his employees – some who followed him from his previous job. The business grew over the next two-and-a-half years, acquiring 12 clients and creating the value he hoped it would. That value eventually attracted the eyes of Workscape, which was in an acquisition-fueled growth mode, taking CCISoft into its fold in April of 1999 until the turn of events that would lead to Riverwood and Connecture.
While Maynard has been comfortable in the more structured roles the larger Connecture has required, the company did hire an experienced chief operating officer last year. “Typically, the entrepreneur rides it only so far,” he said. “For my COO, I wanted a professional manager.”
Maynard’s heart remains with growing, entrepreneurial ventures that can be made into what Connecture has become. There’s plenty of room for growth at Connecture, however, as its new expanded market target shows.
Maynard will continue to make things happen. He loves what he does, noting that passion for your work is one of the key ingredients for entrepreneurial success. His curiosity and comfort level with differing styles of leadership and entrepreneurship have prepared him to capitalize on situations that would have brought down the weak of heart.
Previous articles by Geoff Bastow
• Geoff Bastow: Web-centric entrepreneurs find models that attract investment
• Geoff Bastow: New Silicon Pastures director envisions more home cooking for Wisconsin angels
• Leadership insights from co-founder of Yesmail
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