How InStep Software grew from a startup to a global provider

John Kalanik, Jim Chappell and Tony Maurer brought a lot of engineering experience to the table when they launched InStep Software in the mid-1990s. In those early days, the company’s co-founders focused on solving engineering problems with software solutions.

“The Internet was really starting to take off,” says Kalanik, the company’s president. “We knew there was an underserved market for the development of engineering software. Initially, we focused on consulting projects for companies in the telecommunications, power and utility industries; many of these projects resulted in the development of a specific commercial software application.

“This provided us with the experience and background to develop our own engineering product offerings, rather than continuing to be the sole developer for software that the customer would own.”

Launching a new product or service can be both exciting and overwhelming as entrepreneurs often spend months or even years perfecting an idea that may never come to fruition. Those who don’t have the patience often give up before their idea can take hold. Others wait too long hoping that the idea will catch fire. It’s a tricky proposition with no guarantees.

In the case of Kalanik and his team, it was years of industry experience and a committed staff that allowed InStep to develop, market, upgrade and expand its suite of software products and transform the 70-employee company into a global engineering solutions provider. 

 

Blazing their own path

Rather than look to outside investors, the partners used consulting revenue to fund the development of new software technologies. The self-funding approach improved the startup’s risk profile and created greater flexibility to expand.

The first product was a Web-based data consolidation system that went to market in 1996. It didn’t take long for Kalanik, Chappell (executive vice president of operations) and Maurer (executive vice president of technology) to identify another need, this time for a big data solution for process companies. That led to the 1998 launch of eDNA, an enterprise data historian product.

The company continued to gain ground with this product and grow itself, adding 30 new employees. But the competition was intense and the pressure to keep evolving rarely eased. While eDNA offered many superior features, it was competing with a well-known legacy product that had a large market share.

The InStep team decided to focus on growing the company’s value proposition in an effort to reach more customers.

In the early 2000s, another step forward was taken when the team identified huge demand for a predictive asset analytics solution. It was an opportunity to serve industrial enterprises and get a jump on the competition that had been slow to adapt to this need.

“There were only a few companies that provided limited predictive analytics solutions for a specific brand of equipment or type of asset,” Kalanik says. “But there was not a solution that served as a holistic enterprise system capable of monitoring an entire fleet of assets.

“That’s where our predictive asset analytics software technology, PRiSM, came in. It was the next logical step in the progression of our software and could be used with our data historian or other data management applications.”

 

Go the extra mile

One of the biggest challenges Kalanik’s team faced was figuring out how to make potential prospects aware of InStep and the solutions the company offered. It was still a fairly new idea, so they reached out to existing customers to help spread the word.

“When we launched PRiSM, the interest in big data and predictive analytics had not reached the level it is today,” Kalanik says. “But we knew there were engineers and plant managers in our current customer base that would find significant value and benefits in a product designed to improve equipment reliability by predicting potential equipment malfunctions before they occur.” 

Effective leaders are able to tap their existing channels and find ways to get the word out when their product or service gets good reviews. When a large nuclear power generation customer was nationally recognized for using one of InStep’s products, the positive assessment resulted in a substantial number of additional clients.

When you show your passion for helping clients, you make it a lot easier to grow your business.

“We always go the extra mile,” Kalanik says. “We provide engineering advice that goes well beyond support, and we are very focused in making sure our technology integrates with each customer’s needs.”

Kalanik, Chappell and Maurer center their long-term strategy on continually adding capabilities to their software technology. The goal is to continue to meet changing regulations in vertical markets and to keep up with the rapidly growing amount of data.

“Rather than trying to reinvent the wheel, our business strategy has always focused on satisfying industry needs by building on the proven technology we already have and continually advancing its capabilities,” Kalanik says.

“One way we have been able to do that is through committed and highly intelligent employees that have stayed with us long term. Those employees have become leaders within the company and have facilitated the continued development of our products.

“In addition, we have been expanding our dedicated sales and marketing team to help us grow our market presence,” he says. “That is half the battle: We know we have the best solution, it’s just making the target audience aware of what we can do for them.”

Demand follows awareness as more and more companies embrace smart grid technologies and equip assets with advanced data-transmitting sensors.

“The ‘Internet of Things’ is creating significant big data challenges and opportunities for companies across the world,” Kalanik says. “They can either take advantage of the data and turn it into actionable insights for increasing their bottom line or they can become overwhelmed with it.

“The businesses that use this information proactively are going to be the most competitive as they increase their reliability, improve business intelligence and drive profitability.”

As the need for data management solutions continues to thrive, so does InStep Software. The company is continually hiring new employees and works with customers all over the globe. The company’s international customers will soon represent half of its overall client base

“In the early 1990s, when we were just getting started, our original goal was to solve business problems with engineering software,” Kalanik says. “We did not know where we would be in 20 years, but we stayed true to that initial goal and the products, customers and growth came naturally. If you focus on what you do best, success will follow.”

 

Learn more about InStep Software at:

LinkedIn: http://www.linkedin.com/company/instep-software-llc
Facebook: https://www.facebook.com/InStepSoftware
Twitter: @InStepSoftware

How to reach: InStep Software, (312) 894-7837, www.instepsoftware.com

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