by Jeff Poore, President
Things are different at Numerica – in many ways they always have been. We are proud of our status as a self-funded small business. We thrive in the position of being counted upon when it matters most – even when it requires tough choices. And we continue to enjoy a good challenge and opportunity to deliver meaningful innovation to our customers – even when it means sacrificing short-term profitability to do so. We take the long view of our customer relationships. We have the freedom to enjoy these perspectives, in part, because we have paid our own way for the past 25 years.
There is a growing misconception that venture capital (VC) is a requirement for success and while it may be a prerequisite for early-stage businesses needing to scale at hyper-speed, it’s not the only path. Yes, I get bombarded with phone calls, emails and messages on social media, all from various forms of outside investors looking to invest, grow and exit – to turn their money over and do it again. There’s nothing wrong with this, but it’s just not been our way.
Over the past 18 months, we’ve noticed Department of Defense (DoD) customers placing increased value on VC-backed small businesses. This move was initially presented as an expansion of their aperture to source a larger volume of innovative ideas. However, in some customer circles, this move ended up being more of a shift in focus to VC-backed small businesses entirely, while non-VC small businesses started to be looked upon with suspicion. Questions like, “Why don’t you have any venture capital?” started to emerge. It made us wonder if outside investment is somehow being misused as a singular measuring stick for business or idea quality.
Some in the DoD customer community simply weren’t satisfied with the response that we’ve chosen to operate without venture capital. At our core, however, we value the freedom that comes from paying our own way. The freedom to work with our customers in a way that might otherwise be limited if we had someone else calling the shots, where their bias was toward a short-term exit so a return on their investment can be realized.
At the end of the day at Numerica, we don’t want to be the biggest – just the best in the areas we work. By investing in our business and talent from the beginning, we have remained focused on what matters – helping our customers succeed. We have always felt that if we take care of our customers’ needs, the financial aspect of our business will mostly take care of Itself – and for more than 25 years it has.
We know customers have choices – some lean towards large companies based on their name or earnings report but we’ve found they are often restricted by bureaucracy and budgets. Others are wooed by the latest venture-backed startup but with investors’ short-term thinking or lacking industry knowledge, they can be here today and gone tomorrow.
We believe that our customers have and will continue to benefit from working with the fiercely independent, privately-owned, and family-run business that is Numerica. For us, this means self-funding our future so that we can maintain the creative freedom needed to solve their most challenging problems. Yes, we are deliberately operating unconventionally, but for us and our customers, it has proven to be incredibly successful.