95. Weatherhead 100
Foundation Software Inc.
Year founded: 1985
Sales growth: 29.14%
Chairman and CEO: Fred Ode
Foundation Software is the developer of Foundation for Windows construction accounting, project management and scheduling software.
Since Fred Ode first struck out on his own as a programmer in the early 1980s, he has made several decisions in business that have proved successful for Foundation Software Inc., the developer of Foundation for Windows construction accounting, project management and scheduling software.
In 1985, Ode, who serves as chairman and CEO of Foundation Software, spent two years writing the company’s original software application for the construction industry. It took about a year before he sold it in 1988. From there he converted the program to Microsoft DOS in 1990 to run under that environment and then introduced a Windows application in March 2000. The company has been in business for 27 years.
“Our main product is offering software and services to the business sides of commercial, industrial and government contractors — heavy highway, bridge builders, roofers, electrical and mechanical contractors,” Ode says.
One of the biggest turning points for the company was Ode’s decision to upgrade its software application from Microsoft DOS to Windows.
“In 1996, we decided instead of taking our DOS application and doing what’s called an overlay to make it look like it’s a Windows application, we decided to start from scratch and write a whole new application, and that took four years,” Ode says. “That decision is paying off huge now.”
Many of Foundation Software’s competitors took the easy road reworking their existing applications instead of taking advantage of new technology and new ways to design software.
Another crucial point in the company’s past was in 2008 when the recession hit. The market and the company’s competitors were suffering. While the competition was pulling back on advertising, trade shows and cutting staff, Ode stuck to his guns.
“Part of my philosophy has always been to conserve cash,” he says. “I’ve always accumulated cash, and we had a lot of cash in the company. So we didn’t change anything.”
Everything stayed the same with one exception –— Ode decided to increase research and development efforts.
“We kept our marketing and staffing equal and we increased our development, because the idea was when the recession starts to settle down and business starts coming back, we’ll be several steps ahead of our competitors both from a branding and marketing perspective but also in product development,” he says.
At this same time, Foundation Software decided to add a side company called payroll4construction.com, a symbiotic relationship where one feeds off the other.
“We get payroll service companies that want our software, and we get software companies that want our payroll service,” Ode says. “In 2008, the idea was to put our foot on the gas pedal as opposed to hitting the brake. It has paid off huge.”
In the first half of 2011 alone, Foundation Software saw sales revenue increase by 60 percent, and the company added 25 new employees. That success, however, didn’t come without challenges.
“The part that was hurting was our client services,” Ode says. “We have a great reputation in this industry for responding quickly, giving quality answers and for our training, but we fell a little behind.”
It took three to four months to get people up to speed in client services. Customers were used to getting their responses in 30 minutes and it dropped to 90-120 minutes.
“That was a barrier we had to overcome, but we are back down to 30 minutes and we’ve been that way ever since,” he says.
Currently, Ode and Foundation Software are in a great position to continue and improve upon the growth the company has seen.
“Positive cash flow is happiness and we maintain a lot of cash in the business,” he says. “Right now our assumption is we are going to continue growing.”
While being smart with cash has put Ode and the company in a strong position, he says he wants to make sure he keeps his focus on where the business is heading.
“The challenge is not getting too caught up in this current stage of accelerated growth and to be thinking five to 10 years from now,” Ode says. “The idea is to keep adding product that’s specific to the construction industry that has to do with the business side.”
How to reach: Foundation Software Inc., (330) 220-8383 or www.foundationsoft.com