From Croatia to Silicon Valley, Cleaning Up The Environment: Neno Duplan, CEO of Locus Tech (Part 4)

Sramana Mitra: What did you initially go to market with? Was your initial offering an Internet portal for environmental data or was it consulting?

Neno Duplan: We did not have a product or software offering. We had five employees and we used our collective connections to do environmental consulting. We were working on projects where we helped companies characterize contaminants for their federal reporting requirements.

From April through December of that year we did 2 million dollars of revenue. We instantly became profitable and I never had to extend my line of credit beyond 100,000 dollars. I have always been very responsible with that line of credit and it has been extended 15 years and now it is at millions of dollars. One of our clients, Schlumberger, had a building that was half empty and they were willing to let us occupy their building without paying rent. That was huge.

Sramana Mitra: Why did they do that?

Neno Duplan: They were downsizing operations and they owned a lot of buildings in the area. They were trying to sell some of their buildings but the sells would not go through because of some environmental issues. They thought it would be attractive to have consultants who dealt with environmental issues to actually reside and work in the building. We were working in the building that used to be the original headquarters of Fairchild Semiconductors. Schlumberger had acquired Fairchild hoping to get into the semi-conductor business but ended up with an empty bet because Fairchild declared bankruptcy. While all of the other semiconductor businesses flourished Schlumberger got stuck holding the empty bag and being held responsible for all of the environmental cleanup as the successor company to Fairchild which was a huge expense. None of the other companies who built plants around Fairchild had to pay for the cleanup even though they all had the same problems.

We ended up signing a lot of those companies and plants to consulting contracts. That was challenging because if contaminants were found a mile away from the plants then both plants would deny that they were the source of the contaminant. The companies owning those plants would then sue each other and they spent tons of money on the lawsuits. In the meantime they have EPA regulators on their back demanding treatment system installations and reporting. We did that work for them.

Sramana Mitra: What kind of revenue ramp did you see?

Neno Duplan: Nothing stellar compared to Google and Facebook, but in our first five years we had grown to 4 million dollars in revenue. Today we are pushing 10 million dollars in revenue. We have been able to do that as a self-funded company.

Sramana Mitra: How did you make the jump from being a consulting company to a product company?

Neno Duplan: I always had the goal of becoming a software company. As we became profitable we started building the applications. We had knowledge from historical systems and our work at other companies. We embarked on building a web based system using our knowledge. We had our first application offered via the Internet in 1999 and we offered that to all of our existing clients.

This segment is part 4 in the series : From Croatia to Silicon Valley, Cleaning Up The Environment: Neno Duplan, CEO of Locus Tech
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