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November 2, 2000

Ten Fast Facts: Solthree Software

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Solthree Software

WHO:
An employee-owned "venture software" company founded in 1991

WHAT:
Develops custom software and accepts equity in client companies as partial payment.

WHERE:
Issaquah.

Fast Fact #1: Solthree Software is "not a dot-com."

Comment: "We never have been," says Rob Laws, CEO. "We are profitable. We have money in the bank. We have a portfolio."

Laws
Rob Laws, CEO of Solthree Software


Fast Fact #2: The company held an employee contest to choose its name.

Comment: The company originally was called Skylight Software, but it turned out that another firm already had right of first use. The new name alludes to the sun -- sol -- and the earth -- the number three planet. What does that have to do with the company's software? "The name by itself doesn't have a tremendous value to it, but it's whatever we bring to it," says Dean Smith, communications officer for Solthree. Microsoft began the same way, notes Smith. People wondered, "Microsoft? What is that?" says Smith. "Do they make little pillows?"


Fast Fact #3: Solthree worked on the Experience Music Project.

Comment: Software written by Solthree runs MEG -- short for Museum Exhibit Guide. MEG is a hand-held computer that allows visitors to interact with the various exhibits. "The EMP is one of the biggest showcases that we have," says Laws. While the EMP is not the only high-profile project in Solthree's resume, many others remain cloaked in non-disclosure agreements. For example, says Laws, "we wrote software for the home of a very wealthy individual who lives in Medina."

Fast Fact #4: Laws worked at Microsoft for 10 years.

Comment: He joined Solthree 18 months ago -- nearly eight years after two other ex-Microsofties founded the company in 1991. "I was their mentor at Microsoft," says Laws, a former Windows program manager. "They had been trying to entice me to come over to their company nearly since the inception." Only one of the two founders, Tad Williams, remains with Solthree. 


Fast Fact #5: The founders left Microsoft because they wanted to start a company with "a more relaxed atmosphere."

Comment: "Microsoft started a bad trend," says Laws. "They're running a marathon race at sprinter's speed. And most people can't keep up with it." Laws says he waited until he accomplished certain goals at Microsoft before joining Solthree. "When I left Microsoft, I could have stopped working for the rest of my life. But I have this problem. I really, really enjoy solving problems ... [Solthree] kept finding interesting projects. That's why I wanted to work with them."


Fast Fact #6: Solthree has grown from eight employees to 50 since Laws arrived.

Comment: And that's just the beginning. The company expects to employ as many as 250 people within the next two or three years. Laws says Solthree is looking for a new home along the I-90 corridor with at least 60,000 square feet of space.


Fast Fact #7: Solthree practices "tribal" management.

Comment: The idea, says Laws, is to reinforce the sense that everyone works together and nobody is more important than anybody else -- including the CEO.  "If it benefits the tribe for me to move over or move down, I would do that. I'm just playing a role. It's one of the tribal titles that have to be taken care of."


Fast Fact #8: Laws brought the "venture software" concept to Solthree.

Comment: As far as he knows, Solthree is the only company around that will write code for stock. Clients also can pay entirely in cash, but if Solthree thinks a client's future looks bright, it will charge only enough to cover its costs and take its profit in the form of equity. Solthree currently has three companies in its portfolio (names undisclosed) with six more deals in the works, says Laws. Excluding equity, Solthree projects revenues of $2.3 million this year and twice that next year.   


Fast Fact #9: Solthree eventually may market off-the-shelf products.

Comment: "We have one, but it's under wraps for now," says Laws. In the meantime, Solthree continues to specialize in helping home, business and public clients solve difficult software challenges quickly. Software entrepreneurs find Solthree especially valuable. Under pressure from investors to get to market quickly, entrepreneurs must simultaneously build their product and form a team to do the work. The trouble is, "you can't have two number one priorities," says Laws. "Invariably, they don't have a well-oiled team to build the product." Solthree does, says Laws. Plus it can use bits and pieces of codes it already has developed to speed the process, he says.


Fast Fact #10: Five other companies have offered to purchase Solthree.

Comment: Although one offered $200 million, "that would still be selling us short," says Laws. "There's billions in this space. We're worth a lot more than that."  Laws says Solthree will be ready for an IPO within a year, but "it's sort of wait-and-see if that's something we want to do." So far, Solthree has raised $1.7 million -- all of it coming from company executives and employees.



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