An Inside Look at Barcoding Inc
By Lisa Terry
Barcoding.com: It’s the online equivalent of beachfront property. Potential customers unschooled in the ways of auto ID may not know what type of solution they need, but many know it will involve barcodes and inevitably arrive at the barcoding.com website. Seriously, the company hasn’t paid for search engine leads in years.
With that name alone (and formerly owned or leased sister domains barcode.com, datacollection.com, autoID.com and barcodescanner.com), it would have been easy for Jay Steinmetz, CEO of Barcoding, Incorporated, and his employees to sit back and fill orders. In fact, that’s just what Steinmetz and his former partner did in the company’s earliest days during the late 1990s, operating out of Steinmetz’ apartment.
Within a few years though, the veteran of FMC Corporation, AccuScan and Peak Technologies saw that Barcoding, Inc. could be much more, and began adding services and targeting the Fortune 500. “Some of those first deals were with some big companies, and in order to win those deals I’d have my cousins come in to represent me as employees because we didn’t have enough people to fill out a conference room table,” says Steinmetz.
Fifteen years after its launch, the company fills out a lot of conference tables, with about 80 employees. Barcoding, Inc. is a national systems integrator, specializing in the development, deployment and management of supply chain and mobility systems based on automated data capture and wireless technology and serving a nationwide customer base of more than 2,500. It’s based in Baltimore, MD, and with the recent acquisition of Miles Technologies, also operates an office in Lake Zurich, IL and a Barcoding Technology Integration Center in Addison, IL.
The journey has not been without its bumps, including some really bad hires and several unsuccessful lawsuits. But Steinmetz and his staff have found ways to learn from those mistakes and move onward and upward.
Integrity and Focus
Barcoding, Inc. views its mission as providing complete, end-to-end enterprise mobility solutions that are customized to meet its clients’ needs. “We’re a high growth, highly successful, highly ethical company,” says Steinmetz. The integrator’s formula to attain that success looks something like this:
Customer Centricity. It’s easy to claim a strong customer focus. Lots of VARs do. Steinmetz decided to walk the talk by building up a deep bench of technical and industry talent focused on playing a consultative role with clients.
Barcoding, Inc. will fill orders for people who know what they want, but the true focus of the business is on helping customers grow their businesses over the long term—even if it costs the systems integrator money in the short-term.
One engine manufacturer, for example, came to Barcoding, Inc., seeking an auto ID solution for its engines. They asked for metal labels, a deal that would garner the integrator more than $1 million. Instead, Steinmetz suggested laser etching, which could be covered for protection during the autoclaving process for $100K. “I’d rather lose money than lose a customer to make sure they get what they’re promised,” Steinmetz says. “We want to do the best for them no matter what.”
Professional Services. Barcoding, Inc. offers a broad array of professional services including their own site surveys and wireless network optimization. While some solution providers struggle to get paid for services they had once
included free as part of the deal, Barcoding, Inc. has managed to successfully
bundle them profitably.
“Having a professional services group is really a differentiator,” says Michael Moscato, sales manager, northeast for BlueStar (bluestarinc.com). “Having technical support helps them make sure they’re putting together the right solution. They’re working with end users on a consultative level, figuring out what they need, where the business is going,” versus what they need in the short term. “That makes for a much more positive experience for the end user,” as well as helping vendor partners in product and business planning, he says.
Tom Buesch, former owner of recent Barcoding, Inc. acquisition Miles Technologies, points to the company’s “go live” and “go stay” capabilities, offering skilled project management and post-implementation support and services, particularly critical with technologies like RFID that require proactive maintenance. “It’s unique in the industry,” he says.
Technical savvy. Barcoding, Inc. doesn’t just integrate technology: If the situation calls for it, they invent it too. The company developed what it says is the first device management software, as well as a 5GL prototyping tool to generate applications in 10 minutes and RFID seal log software.
But the company also doesn’t rush to productize the custom software it develops for individual customers. “We build unique tools to create competitive advantage; we don’t provide that to their competition,” Steinmetz says. “We’re not looking to make an industry efficient; we’re there to make our own customer successful.” Well-built products are easier to maintain and fuel growth, he adds.
“They’ve truly been able to take what’s out there in the market, and with the skills and resources they have, modify the software or do things outside the way they are usually done” to create value, says David Hertwig, vice president of sales for ScanSource (www.scansource.com). “They keep the customer satisfied and support their partnerships.”
Steinmetz’ interest in ensuring people get the most out of technology extends outside of Barcoding, Inc. and its clients. He sits on the board of the Maryland Technology Development Corp., which helps commercialize technology developed in the state.
He’s also active on several vendor VAR advisory councils and industry groups. “There are two ways to partner with VARs, the official partner programs with specific criteria, and then there is the relationship,” says Mike deVente, vice president North America enterprise channels for Motorola Solutions (www.motorolasolutions.com). In addition to past membership in Motorola’s Partner Advisory Council, Steinmetz is one of about 30 participants in roadmap discussions at Motorola, helping them get a frontline view of market trends and influencing product design. “They are critical eyes and ears,” deVenta adds.
The Right People. Barcoding, Inc.’s hiring lessons are well earned. Steinmetz is the first to admit that some poor choices led to hapless management, people without the right skill sets and unsuccessful litigation against the company. “You have to be really careful who you hire,” Steinmetz says. “You’d better know everything about them,” including a readily observable online life.
But some great hires have made meaningful impact on the company’s growth. Several employees have been awarded equity positions in the company as well as options and perks. Steinmetz says his is not among the top five salaries in the company.
“I’m all about working as a team. What drives me is working with people I appreciate and enjoy. We give them an opportunity to make money and support them,” he says.
One widely admired hire is Shane Snyder, a veteran of Kronos who was named president of Barcoding, Inc. earlier this year after three years as vice president of sales, where he helped grow and stabilize the company’s sales team. Snyder runs day-to-day operations while Steinmetz looks at the long-term as CEO.
Focused Marketing. Barcoding, Inc. is a specialist systems integrator, not a generalist. “They have a very clear business model and a focused objective and that makes them easy to work with,” says Motorola’s deVenta. “Jay’s genius is in his ability to really focus his investment. People who sell anywhere degrade their value proposition.”
deVente also speaks highly of Barcoding, Inc.’s marketing organization and its ability to create demand—going out, sitting in front of the customer, talking about needs and creating a long-term roadmap, versus sitting back and waiting for vendor and distributor leads.
Calculated Investments and Acquisitions. Barcoding, Inc. tends to be an early adopter: They were early on Palm OS, early on Windows and early into RFID. But they didn’t bet the farm on any of them.
“I believe in doing things profitably,” says Steinmetz. “I don’t gamble future earnings on what people say. I do it based on opportunities I have.”
That same healthy scrutiny applies to acquisitions. The company has pursued 19 over the years—and closed five of them. The rest didn’t have the goods they claimed.
The acquisition of Miles Technologies, on the other hand, has been textbook. The addition enabled Barcoding, Inc. to increase its presence in the central United States and expand its RFID capabilities; RFID is 35 percent of Miles’ business. Miles also sells barcode solutions, develops warehouse management and asset tracking software and has a strong consumables business. Steinmetz says the company was undervalued, offering great engineering, talent, services, and products, but without strong marketing.
“The whole process of merging the companies has been done so successfully. I’m very impressed,” particularly with how Miles Technologies employees were treated, says Buesch. The former Miles owner will now offer his services as an industry consultant.
Business Acumen. Barcoding, Inc. has only experienced one real slowdown, immediately after September 11. Many observers credit that to Steinmetz’ business acumen, including the ability to spot market trends and plan accordingly. His leadership earned Steinmetz the title of Entrepreneur of the Year for the State of Maryland in Technology from Ernst & Young in 2006. Barcoding, Inc. has been listed on numerous “top” lists including the Inc. 500/5000 and the Baltimore 50 Fastest Growing Companies.
The Miles Technologies acquisition is just the latest example of resilience in the face of market change. Miles’ RFID expertise, for example, opens additional warehouse opportunities for Barcoding, Inc.
“One challenge small companies have is to scale,” says Motorola’s deVente, since the leader can’t be everywhere and the business can’t take on every project. “Jay has surrounded himself with trusted people, who make quick decisions and know their limits. Jay is a master at what not to do.”
Barcoding, Inc. also prepared for the consumerization of mobility technologies. “They’ve beefed up their services offering with mobile device management and lifecycle management so they can, for example, start providing those services around consumer devices,” says ScanSource’s Hertwig.
The last fifteen years have seen considerable change in the industry: economic swings, the RFID bubble, the dot.com bubble, consumerization of mobility, rapid technical advancements, eroding hardware margins, and the continual demand for evolution in solution provider business models. Barcodes may have been a constant through all of them, but savvy application of barcodes and other auto ID and mobility technologies continually means something new. Barcoding, Inc. has survived and thrived by staying focused on its areas of expertise while being flexible enough to shift with the marketplace.