The Supply Side: RevUnit expands to St. Louis, seeks bigger deals

Michael Paladino and Joe Saumweber met while working at Rockfish as a software developer and business strategies specialist working primary in the retail sector. In September 2012 they jumped ship to launch RevUnit, a Bentonville-based boutique digital software development company. It was a good jump.

Paladino said the duo bootstrapped the business with a little help from friends and family and have grown the venture to 14 employees in just two years with small offices in Dallas, Las Vegas and most recently St. Louis.

“We started really small scale. Joe and I both working out of home offices until we could begin to grow our client base,” Paladino said. 

Paladino said they sought out business outside the retail segment to start in hopes of developing new relationship in other industries. But retail has always been a sweet spot given their experience in that sector.

The digital software tech company has since added large corporate clients such as Mary Kay, Virgin Hotels, and Park Place Dealerships, a high-end auto group in Dallas. Paladino said they recently signed on to help Sam’s Club with proprietary technical work, and with Unigroup, which owns Mayflower and United Van Lines.

Sam’s Club, under the leadership of CEO Rosalind Brewer, has made an effort to use more digital technology with its member base. The timing of this effort coincided with RevUnit’s circling back to the retail sector and the two were able to connect on a deal.

SMASH METRICS DEAL
There’s no shortage in companies that need help with digital software applications that allow them to connect with customers though mobile phones, kiosks, tablets, social media, web or at the point of sale. In January, RevUnit acquired Smash Metrics for an undisclosed amount. The deal provided digital marketing capabilities for RevUnit’s software development.

“When I was home sick from school as a kid, one of my favorite movies to watch was Field of Dreams. At a great turning point in the movie, Kevin Costner hears a voice that whispers, ‘If you build it, they will come.’ While this was true for Costner and his long lost father, I have found it to be utterly false in every other aspect of life. Especially digital,” Saumweber said.

Saumweber adds that when RevUnit “builds it,” it is Smash Metrics that makes sure people “will come.” For true techies, marketing can be a dirty word, but Paladino said even the best software is of no value if people can’t find it and use it effectively. He said the Smash Metric team in Las Vegas have already helped the firm expand their client list.

CONNECTIVE SOLUTIONS
Paladino said digital technology is helping businesses of all types connect with their customer bases directly and personally.

“We think of ourselves as problem solvers for companies that need to make those connections, whether it’s an auto dealership in Texas or Sam’s Club in Bentonville,” he said.

One of the more recent successes has been a customized digital app RevUnit developed for Park Place Dealerships to communicate with its client base. He said there hasn’t been much work done in the space, but the demand is there and they are getting lots of calls from other dealers wanting a similar product.

“Park Place Dealerships can provide a personalized experience created by an ongoing connection with their clients through the mobile app we built for them. The app allows their clients to view their vehicle information, retrieve service info and schedule their appointments. It also gives them immediate access to the dealership sales and management force through a message option,” Paladino said of customize product.

Paladino is excited about the work RevUnit is doing in hospitality with Virgin Hotels. He said a new hotel opening in Chicago has hired RevUnit to develop an app that will provide management a way to engage with their workers.

He said now that RevUnit has added several large clients and a marketing arm they are in a better position to call on bigger companies in the retail and supplier community, hence the new business with Sam’s Club.

STARTUP SUPPORT
Another key function of RevUnit is to provide work and service in the local startup community. 

“Working with young entrepreneurs keeps us sharp and it’s fresh and exciting. It’s a good balance with the large custom contract work we are doing,” Paladino said.

Paladino and Saumweber also have a vested interest in Overwatch, the gaming startup they founded with Josh Moody, a high school student at the time. The RevUnit duo were brought in to develop the mobile apps for Apple and Android that go with the gaming hardware manufactured by Cybergun. The system is slated to hit online stores later this year and brick and mortar retailers early next year.

Moody told The City Wire last year when the startup won the Ark Challenge competition that Overwatch was lucky to have the RevUnit development teamin its corner because that meant it could better control the quality and precision of the software apps and it was also better on Overwatch’s slim budget.

“Our involvement with Overwatch goes much deeper than most of the work we do in the startup community. It’s been an exciting sideline venture for us.” Paladino said.

NITROUS EFFECT
Paladino said RevUnit recently joined Nitrous Effect, an agency collective group based in St. Louis. Saumweber subsequently moved to St. Louis.

“This is an opportunity for RevUnit to work collectively with other firms specializing in creative event planning like the Walmart Year Beginning Meeting, to a branding agency, video production and content and creative strategies for instance. Being part of this collaborative group gives RevUnit the ability to offer turnkey operations for larger clients in the retail sector and others,” he said.

Paladino said given their small size and specialized service they could never get an shot a bigger turnkey jobs that included digital app development. He said that is likely to change now they have become one of the six specialty firms in the Nitrous Effect collective group.
http://www.nitrouseffect.com

“We are already getting business from this association like our work with United Van Lines and Mayflower. We are working with these companies to enhance the web traffic to their sites,” he said.

TALENT SHORTAGE
Paladino said the biggest hurdle to RevUnit’s future growth is the shortage of talent in software developers and creative visionaries as well as engineers. 

“Part of the reason we have locations in four cities is because that’s where we could find the talent. It’s also nice to have some geographic diversification, but that’s just part of it,” he said.

Paladino said he has a college degree in computer science but he had to spend six months working in the corporate world before he was of any value in real problem solving. 

“We aren’t graduating enough software engineers and those we do graduate aren’t ready to contribute in the real work world until they can get some practical experience. I am glad I got a college degree but around here we are agnostic toward them. We need developers with experience in popular code languages, real problem solving experience which you can get in online supplemental classes,” Paladino said.

He adds that programs like Nerdies that encourage 13-year-olds to delve into software coding, drone applications and video gaming in a creative setting can go along way in getting this younger generation ready for work world by the time graduate high school.
http://www.nerdies.me/fall-sessions/

“I don’t think there is one answer to solving the talent shortage. It’s going to take lots of effort from universities, corporations, STEM education efforts and programs like Nerdies to ensure there are enough software engineers and creative visionaries for the work demand ahead,” Paladino said.

WHAT’S NEXT?
WIth two years under its belt, RevUnit has proven its feasibility by not having to raise outside capital and still growing its employee base to 14 from two. Paladino said this year the company’s revenue will be three to four times that posted in the first year and he expects that upward trajectory to continue if the overall economy continues improving.

Paladino said there much competition in the digital marketing space, but RevUnit’s ability to customize problem solving apps gives it a slight edge over those firms that use technology to analyze data. 

He rebuked the notion that RevUnit is building a business to sell. Paladino said he does work for plenty of startups with that objective and vicariously through those ventures he can feel what it’s like to cash in and move on.

Instead of selling, Paladino and Saumweber hope in the next five years to have a much larger customer base.

“I want to offer the best digital software applications in the area and everywhere. We are about helping businesses use digital technology to solve their problems and better understand their customers and supply chain. I don’t see that changing,” Paladino said.

The one area the owners would like RevUnit to expand is in more unique product development.

“That would mean continued focus on execution and bringing on more developers if we can find them,” he said.