Silicon Space Uses a Blended Approach to Achieve Objectives
Date: 9/9/2005
BY ERICKA CHICKOWSKI
San Diego Business Journal
There are plenty of schools of philosophy when it comes to running a business and investing money.
“In business school, you learn the importance of appealing to vertical niches and specializing horizontally,” said Curt Nelson, the chief executive officer of Silicon Space, Inc. “Through investing, you learn the importance of portfolio management; applying that to business you know that you shouldn’t rely on one big client.”
But Nelson said that it isn’t until you become an entrepreneur that you learn that there is no singular way to achieve financial success.
“I’ll pour concrete curbs in La Jolla if I have to,” he said.
He certainly doesn’t have to do any such thing. He and his partner, Dema Zlotin, have built Silicon Space, which specializes in Web-based applications to improve business processes, into a $10 million business since launching in 1996. All this was done with zero venture capital, Nelson said.
He credits the success of the company to a blended approach at specialization. The business has three distinct elements to it.
The first is a general Web development and systems integrations practice. As he puts it, “We help businesses with lots of documents move and manage this information.”
The second element is an extension of the first.
Through what Nelson calls blind luck and good execution, Silicon Space was given the opportunity to help the Space and Naval Warfare Systems Command in San Diego manage the documents and procedures needed for its complex procurement process in 2002.
The company turned that opportunity into PM Toolbox, a product management software package that lends some sanity and accountability to the acquisition business processes involved in projects such as the multi-billion-dollar construction of the nation’s next generation satellite system. The software has made Spawar happy enough to stick with Silicon Space since then, with a contract that totals about $1 million per year.
The third and largest component to the business is a search engine marketing business.
Silicon Space is one of the market leaders in helping businesses get their sites linked to search sites such as Google when consumers type in key words related to their business. The company manages the SEM duties for Intel Corp. globally, and has built a software package to help especially with this monumental task.
The Intel deal blossomed through work Silicon Space had done for a division of the semiconductor manufacturer starting in 2002. In 2004, the company won the bid to do all of Intel’s search engine marketing through the promise to develop SEM Director.
Though Nelson said he can’t disclose what Intel pays for these services, he did mention that Google has told him that Silicon Space is its largest search engine advertiser due to its work through Intel.
The added benefit of developing SEM Director for Intel is that it has led to more business from other customers interested in the same solution to SEM’s computational and analytical difficulties, Nelson said.
Silicon Space has received some positive response from customers and managed to grow its SEM business to include other prestigious companies such as the Walt Disney Co., iVillage Inc. and Hewlett-Packard Co.
“SEM Director has proven to be a critical analysis tool in evaluating and optimizing our search marketing program,” said Barry Kresch, the senior vice president of research for iVillage. “It has provided us with the insight to know which campaigns, key words and search engines are meeting our objectives.”
All of this seems like an awful lot for a small company with only 35 employees to accomplish. But Nelson said that the firm can specialize while still maintaining a diverse portfolio of clients.
Because the business is so diversified, Silicon Space doesn’t have to worry as much about drop-offs in certain industries or in demand for certain services.
Besides, Nelson said, in the end, the business does specialize in one thing.
“If I were to say we specialized in one thing, I’d have to say that it is in cultivating customer delight,” he said. “Nobody in business school teaches you that you can be a specialist in customer service, but that is really what we’ve done.”
Ericka Chickowski is a freelance writer living in San Diego.