Nimble Serial Entrepreneur Transforms Technology Developed for Stock Price Forecasting Into Low-Cost Data Storage Application

The path to new business success is not always a straight line. An article on Scale Computing, of Indianapolis, in The New York Times on September 10 traces the circuitous route of Jeff Ready and his business partners in moving from the use of an artificial intelligence technology they had developed for forecasting stock prices and building a hedge fund, to using the technology to build a successful data storage company.

By the time they had developed the technology to the point where they thought they could commercialize it, the economy and the financial markets had turned sour, and they could not raise the $100 million they thought they needed to commercialize it for the stock market application. Furthermore, there were some problems with the technology that made it impractical at that time for this application.

Ready and his partners, CFO Scott Loughmiller and COO Ehren Maedge, are serial entrepreneurs. Prior to starting Scale Computing, they built and sold several other companies.

After their pitch fell on deaf ears, they came up with the idea of selling the low-cost storage nodes, and started Scale Computing in April 2007. This past February, they started delivering the nodes, and orders have been coming in. "Small business, hospitals, law firms, school districts and even one Fortune 100 company like the devices because they can buy as few as they want and as their storage needs grow, they can add as many as they need at multiple locations," the article says.

"I've never run a company that gained so much traction so quickly," Ready said. The company has grown to 22 employees, and Ready projects sales of $2 million this year and $8 million in 2010, though he concedes that fortunes can change quickly at startups, either up or down.

Professor Andrew Zacharakis, an entrepreneurship expert at Babson College near Boston, said Ready and his partners have exhibited the familiar entrepreneurial trait of nimbleness as circumstances change. "They take low-cost tests and learn along the way," he said. They don't get discouraged."

This is an excellent example of entrepreneurial fortitude and persistence paying off.