He made his mark, wants to make a difference
By KRIS HUNDLEY
© St. Petersburg Times, published February 18, 2001
Tom E. Wallace has built three tech companies, sold two of them and invested in a handful of other people's start-ups. Now he's got a substantial bankroll, plenty of time and a hankering to make a difference.
Wallace, 42, is one of the leaders of a grass-roots movement to make area technology companies more visible and better connected. He's president of the Tampa Bay Technology Forum, a year-old organization that attracts hundreds of tech entrepreneurs, investors, lawyers and strivers to its occasional breakfasts.
Like Wallace, the organization is unpretentious and informal: no dues or membership drives. The idea is to pull people with diverse interests and energy together, let them know they're not alone in the Tampa Bay area and watch what happens. Though the forum has a philanthropic angle -- it's working to put computers and mentors in area Boys and Girls Clubs -- Wallace likes to keep it simple.
"The best thing we can do is to help grow successful companies," he said. "Those companies will offer good-paying jobs with employees who pay taxes and get involved in the school system. They'll give back."
Wallace recently spoke with the St. Petersburg Times about his experience as an entrepreneur,the strengths and weaknesses of the bay area, what's ahead for the battered tech sector and why the Tampa Bay Technology Forum might be able to pull off what established chambers of commerce cannot.
Q: How did you start your first company?
A: It was 1982, I was two years out of college and the PC revolution just grabbed us by the throat. It looked like a lot more fun than my job working for Alcoa's MIS (management information systems) department. So my partner, Kevin Adamek, and I -- we had met as kids when we were both busboys at a country club -- started a computer company in Pittsburgh, writing software and selling hardware. We were 23, and we started with a few thousand dollars in savings; it was before the days of venture capital but nobody would have invested in us.
Seven years later we sold that company to Intelligent Electronics, which was then one of Tech Data's biggest competitors. Our company had $20-million in sales and 100 employees. I was 30 years old. That's when I came to Florida.
Q: Were you intending to retire?
A: That never crossed my mind. I had some relatives down here so I was a little familiar with the area. And I had a non-compete (agreement) in Pittsburgh. So I opened a little office and was going to split my time between here and Pittsburgh. But once I got into it, I got immersed.
That company was Waldec Group, and our focus was really computer networking. Still the same industry, but we were morphing and moving up into midrange systems, like HP (Hewlett Packard) systems that sold for $500,000 a pop. A lot of our work was driven by customers saying, "Can you do this for us?"
I always knew that today's good products are tomorrow's commodities, and once you get into the commodities side, there's no margin.
We sold that company at the end of 1996 to Ikon Office Solutions when our company had $80-million in revenues and about 350 employees.
Q: How much did you make on your companies' sales?
A: We didn't disclose the sales price on either deal, but I will tell you that when we sold the first company to Intelligent Electronics, they wanted us to take stock, but I was emphatic I wanted 100 percent cash. Their stock then tripled in 12 months.
In the deal with Ikon, I took some cash, but mostly stock. And 18 months later, their stock was one-third the price.
But I still feel everything happens for a reason. We sold our companies at the right time, and I had no regrets.
Q: Did you immediately start on the next new thing?
A: No, I had a two-year contract with Ikon. It was extremely frustrating, because I love start-ups, and working in big corporations is not for me. While I was still with Ikon I started Extracheese.com with Jeff D'Adamo; I was the investor and Jeff ran it. We wanted it to be a virtual community for network engineers.
Then after my contract ran out, we hooked up with Marvin Scaff and Dan Doyle at BrainBuzz.com. We broadened our focus to include programmers and Web developers and Dan's focus was e-cruiting.
The idea was to build a community and then help them find products and services and take a small slice of each transaction. And to a certain extent, that model is still evolving.
Q: So what are you doing now?
A: That's still playing out. I had done some angel investing and knew I wanted to do more of that. So far I've invested in Jibe Inc., QLink Technologies Inc. and Tribridge Inc., and I'm working on a couple of others. I've also made very small investments in a couple of other local companies.
I've been involved with QLink, which is a software company started by Greg Wilson. I recruited a CEO, helped them find office space and they just closed on their second round of financing. It was brutal; you have to talk to so many VCs. But one of our bridge-round partners (who provided interim financing) hooked us up with Draper Fisher Jurvetson Gotham in New York.
Q: What is the size of your personal investment in companies and what is your criteria?
A: We'll invest anywhere from $25,000 to $500,000. First and foremost we look for people we trust and believe in. Then we look at the idea or product, and it's usually an idea because I like the building part. We want companies we can make a difference in. And finally, we really look for people with passion. They're going to do it if they have to sell their home. And it's not about the money. As entrepreneurs, they're going to hit tough times and they've got to be able to weather those. If they've got a burning passion, they'll get through.
Q: After being boss, do you find it hard to stay on the sidelines?
A: I'm still learning that. I wouldn't rule out running my own company again, and the idea of being a virtual CEO, being acting CEO for a period of time, appeals to me.
Q: You've started two companies here. What do you see as the area's strengths and weaknesses?
A: I'm very bullish on this area. I know a lot of people knock it, but I prefer to be optimistic. And I think we have a better tech story to tell than we're telling.
From a tech standpoint, there's a lot of loyalty among workers. In the (Silicon) Valley, competitors are always trying to take your best people. We have a great airport, making it a pretty easy city to travel in and out of. And there's more and more of a tech network here.
The big downside -- and it's changing -- is that there's a perception if you come here for a tech job and it doesn't work out, there's not lots of other options like there would be in Austin (Texas) or Atlanta.
That's a big reason for the Tampa Bay Technology Forum: to build a network of high-tech advocates and let start-ups know they're not doing it alone. We're making a lot of strides, but it's a long-term effort.
Q: How did you get involved in the forum?
A: I got an e-mail from Antoinette (Rodriguez) and Marty (Donsky) and they said, "We're having this meeting (to organize the forum)" and my response was, "I don't have time for this. Sorry, but good luck."
Then they called after the meeting and said, "By the way, we elected you president." But the two of them are really the driving forces behind this; they deserve all the credit.
One reason I was reluctant to get involved is that I spent two years on the (Greater Tampa Chamber of Commerce's) Committee of 100's High Tech Council and it started to frustrate me because nothing got done. The fact that the forum has been so successful in such a short time shows that the need was there and the chamber was not meeting it.
Q: Why do you think it took an upstart group to recognize the need?
A: I'm not bashing the chamber, because they have good intentions. But they're much slower-moving. The quick and nimble get there faster. And the forum is for tech companies on both sides of Tampa Bay. I've got no dogs in that fight.
Q: As somebody who's built his career in technology, what's your take on the battering tech stocks have taken in the stock market? Has the Internet bubble burst?
A: You haven't seen anything yet; the Internet is still in its infancy.
I think venture capitalists will come back strong. Right now, they're trying to figure out what to salvage. They've got a problem since the IPO market closed down. Now they've got to take a longer-term approach. It seems like there are a lot of lemmings in the VC business: They follow whatever's hot. But there will always be good software and infrastructure companies out there. Entrepreneurs won't stop innovating.
I think content will come back in a big way on the Internet, either on a fee basis or as a way to drive sales. Wireless will be huge; there will be a lot of growth in bandwidth, managed services will grow and peer-to-peer -- one-to-one networking -- will be huge because it makes all the sense in the world. If you think about digital photos, that's a perfect example of P2P.
Q: And when you're not immersed in the tech world?
A: I love being outdoors; running, biking, golfing or even washing the car with my daughter, Kirby, who's 41/2. I met my wife, Sandi, in college. We had one date and I was home by 11, so you can tell how that went. Fifteen years later we married.
But marrying late was the right thing for me because as a young entrepreneur, I was working 90 hours a week. I don't know how you do that with a family.
Tom E. Wallace
Education: Indiana University of Pennsylvania, degree in finance and management information systems
Companies: Monterrey Waldec Inc., Waldec Group Inc., Extracheese.com (merged into BrainBuzz.com)
Current positions: president, Waldec Capital Partners; president, Tampa Bay Technology Forum
Last book read: Conversations with God, by Neale Donald Walsch
Personal: lives with wife and 4 1/2-year-old daughter in Tampa's Beach Park area
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