Software CEO Calkins finds a guide in history
In Person: The CEO of Appian named his firm with a historical reference and draws lessons from business leaders such as GM’s Sloan and Standard Oil’s Rockefeller.
The Washington Post
Role: CEO and majority owner of Appian, which provides software for business-process management
Clients: Starbucks, Fidelity Investments, Amazon.com
Quote: “A hundred years ago, the auto industry was grappling with the same deep uncertainty that the software industry is grappling with now.”
Matt Calkins is a history buff who applies what he learns from business biographies to running his soaring Reston, Va., software enterprise, which is on track to earn a healthy profit this year on revenue of $75 million to $100 million.
Calkins, 40, won’t say exactly how much profit he’s earning, but his company, named Appian for the ancient Roman highway, is doing well enough to stash $5 million in cash in the firm’s asset ledger. Year after year after year. He said he is salaried, “underpaid,” has never taken a dividend and owns more than half of Appian, which has 250 employees.
The business lessons he gleans from history apply to his role as chief executive of a software company, according to Calkins.
“I love to draw upon historical perspective when I make decisions, like the way [the late General Motors chairman] Alfred Sloan organized the car industry,” Calkins said. “It is extremely relevant to the way our software industry evolves.”
Sloan’s autobiography, “My Years With General Motors,” which many consider a textbook on how to manage a company, is still relevant, he says.
“It shows the way, a hundred years ago, the auto industry was grappling with the same deep uncertainty that the software industry is grappling with now,” Calkins said. “Sloan is a terrific guide on how to create the patterns that constitute an industry.”
Which leads to another favorite book: “Titan,” Ron Chernow’s biography of John D. Rockefeller, whose Standard Oil monopoly — think Exxon, Mobil, Chevron, Amoco rolled into one — brought order, and some would say price-fixing, to a nascent industry.
“The great thing about John D. Rockefeller is he is an executive and visionary at once,” Calkins said. “He wrestles with philosophical problems like ‘Is a monopoly good?’ His version was yes. He based it on rescuing the oil-refinery industry from the boom-bust cycle.”
Calkins hashes over history every few weeks with four or five friends who come together in his Virginia home to discuss the events and people relevant to a single year. The group started a few years ago with a discussion of the year 1900, and it has moved forward to 1970.
“We have debates about what was the most important X of the year,” Calkins said. “X can be birth, death, science innovation, political events, discovery, disaster or a commercial innovation like the Model T,” which was automaker Henry Ford’s seminal product that made cars affordable for the masses.
“You have to know what you are talking about,” said Calkins, who graduated from Dartmouth College with a degree in economics. “If they are unprepared, they know it. We are not unkind. We ask, ‘It’s 1952. What do you think?’ ”
What does Calkins think was the most formative event of the last 100 years?
Charles A. Lindbergh’s 1927 solo flight from New York to Paris.
“It is an achievement made possible by science, which elevates the possibilities of a human being — science making people greater than they used to be.
“There is something poetic about the accomplishment. A 25-year-old could fly across the Atlantic on his own before organized teams could do it. He accomplished this with personal will. It opens the world to a new kind of perspective.”
Calkins started his career on the ground at MicroStrategy, where he currently sits on the board. He was earning less than $100,000 a year as director of enterprise software when in 1999, after more than five years on the job, he struck out on his own.
“I walked away from $2 million to $3 million in stock options,” Calkins said. Now his stake in Appian is worth tens of millions. His only other partner in the firm is Novak Biddle, the venture-capital firm, which bought a chunk in 2008.
Calkins said he saw an opening in creating software that helps companies do boring things like collect bills, keep records and make decisions in the field. Instead of being exclusively for specialists, the software can be used by anyone who can read.
He and his three partners, all of whom still work there, began in Calkins’ apartment with $5,000 in savings.
They spent $10 million building a piece of software easy enough to use that “someone could come in from the street and figure it out.”
Appian has hundreds of clients, including Amazon.com, Starbucks and Enterprise Rent-a-Car. The U.S. Army, Fidelity Investments and the Chicago Mercantile Exchange all use Appian.
One client is Crawford, an insurance company that responds to natural disasters such as hurricanes, tsunamis and earthquakes.
“When there is a natural disaster, they need to send teams overnight to appraise the damage,” Calkins said. “The people are contractors, and to coordinate those people and action in the field, they need to use our software. ‘Here is your plane ticket and password from Appian. Just go,’ ” is how Calkins describes it.
Starbucks is another example.
“Starbucks does inspections of every one of its stores. (Our software) runs on the iPad, where they fill out forms, upload pictures, fill out their score. By the time they are done, they have an instant score and instant changes, and headquarters is notified right away.”
He thinks Appian is doing for software what Ford did for automobiles: bringing democratization of an industry to the masses.
“We are like a mini Model T,” the history buff said.