Photograph by Jacqueline Ramseyer
Doggone Business: Robert Douglas, president of Magpie Internet Communications in Campbell, sits with his company's namesake, Magpie, a 5-year-old female lab who has the run of the office. The company was named the second largest Web design firm, and the seventh largest Web hosting company in the Bay Area by the San Jose Business Journal in April 2001.
Campbell company noted for Web design, hosting
Magpie, named after owner's dog, is second largest Web design firm and seventh Web hosting company in Bay Area
By Michelle C. Crowe
Amid the crashing of dot-com stocks and slamming of Internet-based businesses' doors throughout Silicon Valley, at least one Campbell company remains steadfastly at its post.
It couldn't happen to a nicer dog ... er, company.
From its origins as a billing system company called InterWare, to its development as a website design and hosting company named after the founder's black Labrador to its yet-to-be-released but possibly revolutionary new product, Magpie Internet Communications demonstrates that the dog-like values of loyalty to customers, obedience to covering costs and earning its keep by making profits, still do pay off, even in today's dog-eat-dog market.
The Campbell company was named after Magpie President Robert Douglas' black Labrador, Magpie. The 5-year-old website design, Internet hosting and back office integration firm located at 1 West Campbell Ave. is as vibrant, energetic and persevering as its namesake. In fact, Magpie the dog has free rein at the office to supervise employees-and ensure operations are profitable enough to continue supplying her with treats.
When New York native Douglas completed his degree in computer information systems back in 1983 at Union College, (an engineering college in Schenectady, N.Y.), IBM was still the sole industry standard. "I was always a programmer and at that time, billing systems were a hot industry. As most of my experience was in IBM platforms and electronic data interchange, (the predecessor to the Internet), I ended up forming a small company called InterWare Inc. for handling electronic billing systems," Douglas says.
Basically, he and his team of ten developers, modified and implemented the billing systems used by well-known companies such as GTE, America Online and Advantis.
"This field has about a five-year cycle of change. About three years into this last cycle, I wanted to get something that was more creative. While the original product was designed to host databases, we directed this new one more to the customer self-service needs of businesses, such as cell phone bills that can be pre-paid, tracked online or paid over the Internet," Douglas says. "A lot [of customers] are chip manufacturers who use it to see exactly when the product is coming in so they schedule their manufacturing lines accordingly. For example, we created an online ticketing component for the San Jose Rep; now we're doing a new one for them this December that will make ticketing available 24 hours a day."
After several years, Douglas had "made a lot of money, electronic billing systems had reached its next five-year low cycle and we needed to reinvest, but weren't sure what to put it into."
In the meantime, the staff was frustrated with the task of setting up and developing its own reliable, usable website-and the idea for the next company was born--but it didn't yet have a name.
"Basically, Magpie is a one-stop service for the customer's Internet and Intranet networking needs, from helping them choose a DSL provider to purchasing and implementing hardware to designing and hosting websites and e-mail," says Douglas. "We really didn't know what to name the company, although we knew we wanted it more homegrown and comfortable than techno, so when my accountant suggested we name it after my new puppy Magpie, it seemed like a natural winner."
Magpie's Development
Instead of following the venture capital to Initial Public Offering (IPO) path based on the small profit/high volume rationale, Magpie chose the safer road of self-funding based on a valuable, reliable product and service offered at a reasonable (but not cutthroat) price. Unlike some competitors, which run the gamut from NetGate to Campbell-based PSI (now defunct), Magpie is still around--and healthy.
"Some of our competitors were VC-funded, while others tried to go with the volume program but then couldn't pay for needed equipment. Sure, sometimes people would call and tell us they could get the same thing for $10 at Hurricane, but we've actually only lost two or three customers in the past five years--and in all honesty, those particular customers were the ones you'd just wish on another company anyway."
Although Magpie outsources for bandwidth, the backbone of its operation is premium hardware--all of which are Hewlett-Packard products, primarily with either a Netscape or an Apache platform, depending upon the customer's needs. The firm constantly runs backups just as they did with billing systems as InterWare, so that no customers lose data. Douglas finds the only time those backups were used was when customers have inadvertently deleted their own data.
After running out of room for their expanding business in Los Gatos where the rents were higher, Magpie moved into its present space in the Campbell Community Center in February. "This is a beautiful site. Most of our customers now want to visit us, unlike Los Gatos where parking is such a problem," Douglas says. "Plus, here we can just walk downtown and grab a great meal."
With Campbell customers such as iHomeInc. (an audio/visual and security system installation firm) and well-loved Andy's Barbecue, it's not surprising the company was named the second largest Web design firm, and the seventh largest Web hosting company in the Bay Area by the San Jose Business Journal in April 2001.
One other dog pile Magpie avoided was blowing its budget on non-performing advertising.
"Straight advertising doesn't seem to be a good medium for us, as most of our business is generated through word of mouth from satisfied customers," explains marketing specialist Audrey Duet. "People who are having trouble with their vendors in this industry talk to people who aren't, and inevitably our name comes up and they call us."
Other Company Differences
One of the main reasons Magpie employees believe they'll succeed where other tech firms have failed, is Douglas' solid planning. "Most of Magpie's funding came from my pocket. We started out with five HP machines designated for different tasks such as email and Web hosting. Sure, sometimes cash didn't come in as fast as we liked, but we preferred to wait and invest in more machines instead of accepting money from the outside," Douglas explains. "We tried to build our customer base and always plan out three months ahead of need--instead of just building out for 2 million customers and hoping they'd show up in time."
In fact, Douglas was previously hired by Digital Equipment as an expert speaker on the effects of the Internet on billing services. "One topic was predicting the effects of Internet five years out. While others postulated that MSN, AOL, Netcom would buy out all the little guys, I stated that the small to midsize companies were providing a different service for a different customer--one who wanted personal service, great connections, fast sites, fast email--and didn't want to stay on hold with Netcom forever. I said those small and midsize will consolidate among themselves, while the larger ones will consolidate among themselves--and that's certainly played out."
As far as dealing with the energy crisis, Magpie's hallmarks have always been security and redundancy. "We have tons of uninterruptible power sources (UPSs), plus rollover capabilities to a generator--which is why we host businesses instead of individuals. I'm sure we're over-redundant, but it lets us sleep at night. We've only had one downtime in our entire existence--and that one couldn't have been prevented unless we had a satellite (a PacBell trainee disconnected all of the fiber line). Unlike competitors shut off its phone systems during problems, we answered the phones and stayed in communication with the customers."
Magpie's Future
The 11-person team is actively planning for future success through not only a new product, but also a global, multi-lingual mindset. By capitalizing on the linguistic capabilities of its French- and Spanish-speaking employees, Magpie has developed those components for its own Web site, as well as begun expanding its offerings in languages other than English.
Magpie just opened its first branch in the French-speaking area of Ontario, Canada--and has already landed four new clients, thanks to translation assistance and customer generation from Audrey Duet in marketing--whose parents happen to live in France.
Another employee from Venezuela worked on the Spanish component.
"Those machine translation programs just don't work; one technical word we use may come out with three or four words in those programs--and put them out of order," Douglas says. "Sandra and Audrey did an excellent job. If we'd tried to run that information through one of those translators, it would have been awful."
Nearly every employee is a dog owner, and most bring them to the office. "Plus, every quarter we have a theme party for our customers, and their dogs are invited. Appropriately for Campbell, once a year we also have a Scottish kilt party."
Campbell, California
