Boise Engineer banks on Boise — again

Bob Lokken and three other engineers from a Hewlett-Packard spinoff started ProClarity, a software company, in a North End basement in 1995. ProClarity's so-called business-intelligence software enabled managers to analyze the mountains of data that businesses produce.

Software giant Microsoft bought ProClarity in 2006 and kept its business software going as Microsoft Boise. Lokken stayed on as Microsoft's senior director of office business applications. He has just completed Microsoft Boise's move to a permanent location in the Idaho Independent Bank building at 401 Front St.

Now, Lokken plans to leave Microsoft. His last day will be Friday. He intends to launch a new company in Boise next year.

Lokken talked with the Idaho Statesman about his plans, the economic downturn's effect on high-tech, and how you can develop a new business in Boise.

Q: After fewer than three years with Microsoft, why are you leaving the company now?

A: There were things I wanted to get done - finding a permanent home for Microsoft Boise - we just finished moving into three floors and have room to grow. I wanted to lead Microsoft Boise into a healthy, prosperous position, and I think I've done that.

The division is doing great stuff. The sales team here is some of the best across Microsoft. We've got a new strategy in place that will drive us for the next seven to 10 years.

Since the acquisition, I've spent the vast majority of my time in Redmond (Wash.) at corporate headquarters. But at 46 with two kids, I like the relaxed atmosphere in Boise, the lack of traffic, going to the mountains every weekend to play. And the people I know and trust are here. It's a good time for me to transition out.

Q: In 2006, when ProClarity employed about 100, you predicted a bright future for Microsoft Boise. Has the division grown?

A: Total headcount is kind of flat. When we did the acquisition there were a lot of administrative positions that were redundant and got moved off.

There are multiple groups here. There is a local sales office, which has always been a blessing. There is engineering, and a customer support team is here handling Microsoft business intelligence. Each of those has grown, so we're about back to the headcount we had, and we're hiring engineers and customer-support people now. It really is a meritocracy (at Microsoft). As long as this site is successful, then it will continue to grow.

Q: How has the economic downturn affected the software business?

A: The business intelligence segment is a very competitive market space now because in a down market, demand goes up.

If people know they will have fewer resources, they understand they have to be more insightful about the decisions they make. They will take the time to analyze the bottom 30 percent of their customers to find the ones that actually cost money, and decide: "Should I fix that or divest myself of those customers?"

In the good times it tends to be go, go, go, and in the down times people have time to reflect on what is working and what isn't.

Q: What will you do next?

A: For me there's nothing more fun than building a business from white space, and the Valley needs another tech company (laughing).

Q: Do you have anything specific in mind?

A: There are a handful of problems I'm looking at. It will probably be in business intelligence.

I've got multiple patents in analytic techniques. I know that technology. I know that industry inside out. I just finished writing Microsoft's business strategy for it.

As a small startup we'll have limited resources to start. So we'll want to pick our targets carefully, not choose to do something that will take an entire army to attack.

The typical vision is, someone comes up with a great, patentable idea and makes lightning strike.

I'm a firm believer that it's the people that make successful companies. Ideas are a dime a dozen. It's the execution of the idea that makes the difference.

If you assemble a world-class team and put them on a problem, they will figure out the product, the business model, and get a quick win.

By the time ProClarity was acquired we had won 42 industry awards for our technology and the company's growth. That all resulted from focusing on a problem and fixing it.

Pick a specific problem that you think you can own and be world-class at. Start with world-class people, throw some pizzas under the door, and magic happens.

Q: How much time and money will it take to start a software company from scratch?

A: Most software companies can be up and running with $500,000 to $1 million.

That's the beauty of software. There aren't many expenses. I need some computers, I need some office space, and I need some world-class software talent.

The first ProClarity product took two years to get to market. I think there are more productive and agile development methodologies that have been created in the last 10 years, so if we have a good team using state-of-the-art technologies and the Internet for what it's really good for, I think we can get a solution into market in six to 12 months.

And that's why the cost of labor is such a tertiary issue. A world-class team of software developers can generate 10 times more output than mediocre developers. So I can literally pay them five times more and be way ahead of the game.

Q: Is Boise still a good place to start a business?

A: I think there is a huge opportunity locally right now.

What Boise has always been good at is entrepreneurialism. And if you look at the last 50 years, all the job growth in this country has come from small- to medium-sized companies. The bigger companies employ the same number or even slightly less than they did 20 years ago.

That doesn't mean the big companies are irrelevant. Far from it. Ultimately, you want one of these little companies to become the next big company, but with the turbulence in the economy right now, the thing you want in business is agility.

Everything is cyclical. You want to have a new business stood up as we come out the other side of the downturn. If you wait till the economy recovers to start, then by the time it is actually productive you're already deep into the upswing.

Everybody is watching the nightly news and hearing them go on for 15 minutes about all these problems, but an entrepreneur listens and says there's a business, and there's a business because that's what we do, create businesses that solve problems.

Q: It seems like software companies are bought up before they can grow into the next big employer. Can a tech startup become a large company today?

A: Building companies like Micron and Simplot took a lifetime. In the tech world, as a biz becomes viable and its ideas become scalable, bigger companies inevitably want to add them to their portfolio. It's a more efficient way for them to grow than to do their own entrepreneurial thing.

And it's a lucrative enticement for the entrepreneur to take their money off the table and go do something else.

You're also limited by the number of world-class people you can hire.

If you're in agriculture, the natural resource you need to make your business grow is water. In tech, our natural resource is educated people. That's my raw material. You can grow a company with 10 employees 10 percent a year by hiring one good expert. And when you're small, there are plenty of smart people here in the Valley.

If the new company gets above 100 to 200 people, it will run into the same problems we had at ProClarity. We weren't able to grow because we couldn't find enough talent.

I can go find some talent at Micron or HP, but you eventually tap that out. There will be a couple graduates from BSU a year, but if you need to hire 50, that isn't good enough.

Right now our schools' systems are providing a drip, and I need a flood of people.

One of the benefits of starting from scratch is it will be a couple years before I have that problem.

Brad Talbutt: 672-6737