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1Mby1M Deal Radar 2010: Craig Technologies, Cape Canaveral, Florida

Posted on Thursday, Oct 14th 2010

Craig Technologies, based in Cape Canaveral, Florida, site of the Kennedy Space Center, specializes in systems engineering, project management, infrastructure installation, software design and engineering, research and development, modeling and simulation, training and other custom technical products and services provided to federal customers, predominantly in the aerospace and defense industries.

Founder Carol Craig earned degrees in computer science and engineering and became a civil servant computer engineer for the U.S. Navy. Feeding her need for a personal challenge, she decided to join the Navy and served in active duty as a P-3C Orion Naval Flight Officer for several years. Following injury from a training accident and an unsuccessful surgery to repair the damage, she returned to her career as a software engineer and decided to pursue a more flexible option that would allow her to more easily support her husband’s naval career. She began by offering software and systems engineering consulting services to government and commercial clients.

During her time as a civilian engineer, Craig identified a lack of customer attention and technical follow-through by many commercial service companies performing under federal contracts for technical services. Delivering quality and reciprocity in meeting customers’ needs was not the standard, and Craig incorporated in 1999 to fill that void and provide government customers a desirable option when contracting for their technology solutions

The federal government is required to allocate 23% of its spending to small business and socioeconomic set-aside classifications, such as woman-owned and service-disabled veteran-owned businesses. With over $635 billion in FY2010 defense appropriations, $146 billion is up for grabs in the total pool. As a small business, sometimes teaming with larger corporations, Craig Technologies has access to individual project values that reach upward of $100 million.

The company has done software development and design and software and system engineering for a number of projects. For example, it has created designed software for manned and unmanned air vehicles, training devices and courseware for Air Force combat search and rescue personnel, and the Florida National Guard with application and document integration and modernized the organization’s network.

At the time of Craig Technologies’ founding, there were few businesses with technically-minded women at the helm to bring to market high-end custom engineering and technical services. Securing various certifications helped to open doors, but it was still very much a man’s world and closed to outsiders. Craig says that she found unique ways to cultivate business, align with select high-quality individuals, and create demand. She also understood that to contend for business under large prime contractors, she had to exhibit the capability of building and retaining a quality workforce. So, she made available the benefits of health insurance, IRAs, FSAs, paid vacation, and family leave to all employees when other small business operators considered it cost prohibitive. Finally, Craig invested early to develop a technologically-advanced management infrastructure, equivalent to those used within large corporations, before Craig Technologies’ expansion from her home office.

In the past five years of operation, the company has been profitable and showed exponential revenue growth with specific gains in gross sales starting at $350,000 in 2004, $1.2 million in 2005, $3.4 million in 2006, $8.2 million in 2007, $12.2 million in 2008, and $16.5 million in 2009. Craig Technologies manages over 50 contracts. The customer base has grown significantly from a handful of federal agencies to a roster of over 30 specialized directorates that include the U.S. Army DA G3/5/7 Model & Simulations Proponent (DAMO-MS); U.S. Marine Corps Training and Education Command (TECOM), U.S. Navy Commander Operational Testing & Evaluation (COMOPTEVFOR), U.S. Air Force Central Command (CENTCOM), U.S. Joint Forces Command (USJFCOM) and NASA Ames Research Center. Partners include General Dynamics, SAIC, Unisys, and Lockheed Martin.

Craig at one time considered angel investors and venture capital, but she wanted to remain free and in control. So, she used all other options – eight credit cards, a small bank loan, multiple mortgages on her home, several life insurance policies, and stock as collateral. She also resorted to factoring for a short time; because she couldn’t wait 60 to 90 days to be paid for a job, she would sell the invoices for the government contracts and pay the factoring interest rate just to stay afloat. But as she forged good and open relationships with banks for direct financing, she relied more on that. Craig says the company would consider going to outside investor sources for a specific product with high marketability. The ideal investor would be someone who would trust Craig enough to give the money without too many restrictions.

The company aims to double in staff and revenues within the next two to five years. To do this, it is investing more in internal research and development efforts to create products that will make it to market. Craig sees the potential to breed spin-off companies that will take the core team and her along to new and diverse pursuits. Craig Technologies was not built to hand down the family line, so she anticipates selling off in the long term. Her primary goal for herself, as far as Craig Technologies is concerned, is to secure a future for her son, who has a complex genetic disorder. Craig says, “As Craig Technologies developed, I reflected on my own personal experiences and decided to give to employees what I would want: respect as an individual, flexibility to meet personal priorities, and security in knowing basic needs are met so I can focus on work. These elements could only be found in companies that were built to enjoy.”

This segment is a part in the series : 1Mby1M Deal Radar 2010

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