Inventing the Marketplace: Analytical Graphics Inc. Plots Growth

Posted on January 31, 2013 in Almanack News, News & Announcements

REBECCA VANDERMEULEN | Keystone Edge

In 1989, three programmers quit their jobs in the space division of General Electric’s King of Prussia office to start their own software company.

AGIMore than two decades later, one of them freely admits that they knew few of the rules about running a business.

The trio’s plans for launching Analytical Graphics Inc. (AGI) relied upon a commercial bank loan that didn’t come. But, thanks to the tireless day-and-night efforts of early employees, the company rose above the challenge to succeed. To this day, co-founder and CEO Paul Graziani doesn’t believe in time cards. As long as his 250 employees get their work done, he doesn’t much care about when.

AGI, based in Philadelphia’s western suburbs, makes software that plots the location and paths of satellites, aircraft, submarines and ships. While this may sound like a niche market, it has applications in the fields of intelligence, space and the military. AGI’s software can show a jet’s progress on the way to its destination and generate high-resolution satellite images of the earth’s surface. And if you and your kids pored over NORAD’s Santa tracker on Christmas Eve, you saw AGI’s technology in action.

“We’ve basically invented this marketplace,” Graziani says from his office in the company’s Exton headquarters. “We pretty much set out to be all things to all people, which is generally a bad idea.”

Just last month, AGI’s software was chosen by the U.S. Air Force Space and Missilie Systems Center (SMC)/Space Superiority Systems Directorate. It’s significant considering government agencies typically build similar software packages on their own rather than contracting that work to the private sector.

“Our early Ben Franklin investment was a big help,”

- AGI co-founder and CEO Paul Graziani.

Tracking objects in space

AGI’s main product is a software package called Systems Tool Kit (STK). As Graziani describes it, STK is essentially a platform to model where an object is going, when it will get there, what it will be able to see, and what will be able to see it. While most of its users are military agencies or defense contractors, its applications are wide-ranging.

One of STK’s most important features is a real-time visualization of 17,000 manmade objects in Earth’s orbit. This includes active and inactive satellites, debris from spacecraft and everything in between. This information matters to any entity that sends satellites into space, from national space agencies to TV channel providers. After all, one strike from an errant object can decimate a multimillion-dollar piece of equipment. “Most satellites would be completely destroyed by something the size of a marble,” Graziani says. Right now his company’s technology is able to monitor anything at least as big as a softball.

Rocketing to success

With $50 million in sales in 2011, AGI has come a long way from its beginnings in Graziani’s living room.

He and cofounders Scott Reynolds and Jim Poland were colleagues at General Electric, where they developed software for the National Reconnaissance Office. They found that they spent much of their time building slightly different versions of essentially the same software and thought their employer could save time by building one software tool that could be used for multiple tasks. So, as Graziani recalls, the trio pitched this idea to their bosses. Management didn’t go for it. (Looking back, he says GE’s decision made sense.)

So Reynolds, Graziani and Poland quit their jobs and coded the first version of STK.

“It was really a chance to break away completely from everything we had done before,”

Graziani says.

Their plans for AGI depended on a $650,000 bank loan, but that was not to be. As Graziani puts it, “They didn’t quite laugh us out of the bank.”

The three kicked in a much more modest $100,000 from their own savings and credit cards.

Over the next several years the company was funded through a variety of other sources, but dollars were hard to come by. “We were pushing all the financing buttons we could find,” Graziani says.

In 1994, when AGI had only nine employees, it needed to build the critical first 3D version of tracking software. Graziani approached Ben Franklin Technology Partners of Southeastern PA for support, and earned an investment of $50,000 to fund the project.

With the completed project in hand, venture capital group SpaceVest soon invested in AGI. “Our early Ben Franklin investment was a big help,” says Graziani.

Graziani says AGI’s size means the company is small enough to be nimble and be selective in hiring above-average talent. And he says he can count, on one hand, the number of developers who have left his business since 1989.

The on-site perks surely don’t hurt. Besides the company cafeteria on the ground floor, AGI employees can take advantage of the on-site gym, a massage therapist who works at its building in Exton, and complimentary laundry services. The company has received numerous awards for being a great place to work.

Spokeswoman Stefanie Claypoole says these benefits aren’t designed to convince employees to work long hours. They spend a lot of hours in the office anyway, she says, so management wants them to maximize their personal time.

Graziani says AGI is fortunate to have talented, motivated people on its payroll.

“We have an off-the-charts productivity rate,” he says. “Any knowledge worker has a broad range of productivity levels. Anything you can do to keep these people at the high end of that metric has a lot of payoff.”

Read More: http://www.keystoneedge.com/features/analyticalgraphicsinc0108.aspx

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