The driving force behind start-up success
By Ryan Schatzman
John Bostick is still thinking big.
The founder of two Greater Cincinnati IT companies, Bostick has seen his share of struggles as the economy has sputtered. But the serial entrepreneur remains undeterred.
“The last two years have been a tough environment for small businesses. Our profits are up, but revenues are down,” Bostick said.
“I want to do better for our businesses and investors.”
Bostick is founder and CEO of LUCRUM, a specialized data analytics and business intelligence IT consulting organization based in Kenwood, and dbaDIRECT, a data infrastructure management firm based in Northern Kentucky.
Though the downturn has been tough, Bostick is seeing signs of economic recovery and is increasingly optimistic. Today dbaDirect has about 65 employees in Northern Kentucky and “between $10 million and $15 million” in revenue, Bostick says. Lucrum has about the same number of employees with offices in Kenwood.
The son of a General Electric research scientist, Bostick is the product of a military secondary school and a 10-year career in the iconic corporate culture of IBM. Today he has two company launches and more than $5 million in venture backing and almost another $ 5 million in private regional investors behind him as well.
Bostick is quick-minded, self-deprecating and full of adrenaline.
He will tell you one of his greatest assets is self-discipline, a trait that came from his Depression-era parents. And while he’s running companies and raising three teen-age boys, he manages to find time for guitar playing, skiing and gourmet cooking.
Bostick grew up in a Southern-style household where the post-Depression experience instilled a sense of frugality and fear of failure in Americans. This use-everything-waste-nothing upbringing shaped not only his values of hard work and accountability but also his entrepreneurial tendencies.
“I am outstanding at rubbing sticks together, finding resources, boot-strapping initiatives and creating marketing or sales models without much expense,” Bostick said. “But at the same time, I tend to under-invest in those activities. I get frustrated because I’m too conservative, and I wish I could be more aggressive.”
That conservatism governed the early years of his career. Bostick graduated from Wabash College with a degree in history and classics in 1981 and spent nearly 10 years working hard and enjoying job security at IBM.
Then one day, his parents pointed out that life was going by.
Bostick’s father had been a 40-year veteran of General Electric, developing products as a plastics research scientist, contributing to more than 400 patents in his career. But when the business took a dive during the oil crisis of ’74, he was moved to a ‘ghost’ position in the company with few responsibilities – a far cry from the 350 people he had been leading in his booming department.
“I saw what it did to him,” Bostick said. “In those days, you had a family and worked cradle-to-grave for the same company. So he wouldn’t leave to start his own business. It frustrated him and hurt his career.”
Bostick also credits the beginning of his success to the development of a personal sense of self-discipline at the Culver Military Academy.
“I learned how to get up early, do good things with my time and maximize my opportunities – investing in present pain for future pleasure,” he says.
While preparing for pre-law studies at Wabash, Bostick was offered a position at IBM in Chicago. His classics professor convinced him that law school wasn’t for him.
“He told me that I should go to a big city and work for a big company, because from there you can go to a small city for a small company. You can’t do the opposite very easily,” Bostick said. “It was easy for me to move to Chicago and learn from my brother, so I took his advice.”
In 1981, Bostick joined IBM’s mid-range systems group, selling first-generation computer automation to mid-market companies who hadn’t automated their systems yet. He also worked in product centers, regional marketing and PC distribution channels as part of the original team to bring the first PC to the Cincinnati marketplace in 1988.
It was an exciting time for Bostick, selling new technology in an entrepreneurial, fast-growth part of IBM compared to the large, mature mainframe sales force that worked for corporate America. The environment promoted creativity and flexibility, and the company saw double-digit growth during that time.
After being part of the field sales team that rolled out the original IBM PC, Bostick transitioned to the management side of IBM as a dealer account manager in charge of PC dealers. His clients were entrepreneurs who started their own franchises, and he spent his time discussing IBM products and programs and learning about their start-up businesses.
In 1990, he left IBM and accepted a position from Dave Pomeroy as general manager of Pomeroy IT Solutions. Bostick was part of the senior management team that took the company public but was fired during the recession of 1992 for differences in management philosophies.
“The firing was demoralizing, but everyone should get fired at least once,” Bostick said. “It’s a terrible thing to go through, but it’s great for building your experience.”
After he returned home to Mount Vernon, Indiana, his parents spurred him to start his own business. They pointed out that he was in a good place in his life to take the risk and reminded him it wouldn’t get any easier. Client Server Associates was born not long after.
Bostick wanted to build a business that offered more value and better results than traditional IT consulting services. He founded Client Server Associates in 1993 in a small first-floor office across from the YMCA of central Cincinnati on a $50,000 loan from his parents.
CSA generated more than $300,000 in sales the first year. The second year saw almost $1.3 million.
“We hit the growth of the consulting and computer development market at the right time,” Bostick said. “We did pretty well.”
After six years in operation, Bostick saw another opportunity for growth when the CSA tech team came to him with a proposition to perform database administration work in 1999. He drafted a new business plan with Bill Menke and created dbaDIRECT.
“We stayed inside LUCRUM, literally reserved a group of cubicles in a section of the office, and said, ‘This is a new company, with no other responsibility but to build this company,’” Bostick said. “Then we gave that team of four 90 days to find the first paying client.”
For the first year, LUCRUM supported dbaDIRECT, which was using a BMC Software database program. On a whim, Bostick cold-called the head of investor relations at BMC and told them what dbaDIRECT was doing with their technology. BMC liked their idea so much, it invested $5 million, and dbaDIRECT was spun off in January 2000. The company bought out BMC in 2006, and private local investors jumped into dbaDIRECT in 2007.
Although the environment for small businesses is tough, the mid-market is growing right now, and big companies are in a more questionable position than ever. Bostick plans to push harder and take calculated risks to grow LUCRUM and dbaDIRECT.
Bostick’s advice for other entrepreneurs?
"Do the right thing, what you believe in, and have a good reputation,” he said. “It’s not about what you do; it’s about making sure you’re accountable for what you just did. It creates who you are and determines your growth in the future.”
Accountability might be what drives Bostick’s success, but his personal relationships have always been his greatest resource.
“Your networks are the key,” he said, “more valuable than your investment dollars.”