Small Business Runner-up
By now, Kim Winslow is used to The Question: What’s a software company doing in Edenton? “In Boston, we were a small fish in a very big pond,” the president of Broad Street Software Group Inc. says. “In Edenton, we’re a medium-sized fish in a much smaller pond. There are opportunities that have come to us.” Capitalizing on them has helped the company become profitable, increasing revenue from $2.2 million in 2004 to an expected $2.5 million this year.
There is another reason it’s there. Founder Tully Ryan, now executive vice president, grew up in Edenton but left for East Carolina University in 1987. “The culture here says you have to go to Raleigh, you have to go to Charlotte, Atlanta.”
They met in 1995 when Winslow became a customer of Environmental Network International, a company Ryan started in Raleigh that year after earning his bachelor’s in geology in 1991. It matched engineering firms that had won federal contracts to clean hazardous-waste sites with subcontractors, one of which was Fort Lauderale, Fla.-based U.S. Environmental Group. Winslow, who earned a bachelor’s in geology from the University of Florida in 1978, was its CEO.
In 1997, Winslow asked Ryan what he thought about turning Environmental Network into a software company. Winslow bought a 30% stake. They gave a 30% stake to Edward Fredkin, a professor at the Massachusetts Institute of Technology who specializes in artificial intelligence and was distantly related to Ryan by marriage.
Winslow and Ryan went to work raising money and compiling a database while Fredkin and others developed an artificial-intelligence technology called W5, the basis for the company’s software. By the end of 1999, ENI had raised more than $3.2 million, but investors wanted it to move to Boston. It was a move that almost destroyed the company. Sales of its first software package, ENI-Net, which matches local governments with vendors, were low. Expenses were not. Rent, for example, was $10,000 a month. “We were trying to be somebody up there,” Winslow says. “We knew if we didn’t relocate, we’d be out of business.”
Investors had installed Jay Fredkin, Ed Fredkin’s nephew, as president. He didn’t want to leave Boston, so the board picked Winslow to take over in February 2002. The company was $600,000 in debt and had downsized from 35 employees to five. “The Edenton-Chowan Development Corp. courted us.” ENI got free rent for a year and $50,000 in seed money when it moved the next month. It also got a name change, which it took from its new hometown’s main street.
Winslow soon became friends with a local banker who wondered if W5 could be adapted for banks. That led to Finistar, which helps banks manage deposits of counties and municipalities. Other software manages tire-store inventory. Broad Street became profitable in late 2003. The only downside to Edenton, Winslow says, is the shortage of venture capital. “That has slowed our growth because we’ve had to do it from cash flow. But we’d have never had the opportunities that we continue to have if we weren’t here.”
The Question doesn’t bother him now. “When we moved here, I was a renter. I bought a place last year.”