Business Spotlight: Software Safety Net

When cousins Phil and Chris Reynolds launched into business together, they never dreamed their company would be where it is just seven years later.

Intuitive Web Solutions LLC, a company that designs software for small- to medium-size insurance companies, this year expanded its 509 W. Olive St. operations, and it is projecting a 75 percent jump in annual revenues.

Built on a niche – Web-based property and casualty insurance administration software – IWS has realized quick growth in revenues and staff. The company recorded just $190,000 in 2007 revenue and topped $2.4 million in 2010. Chris Reynolds, president of business development, projects $4.2 million in revenue this year.

IWS has grown from a dozen employees in 2008 to roughly 40. The office is now one-third larger and comprises about 8,400 square feet on the first floor of developer Craig Wagoner’s center city Olive Place.

The software developers target insurance carriers with revenues of $5 million to $10 million, primarily with its BriteCore system, a software IWS developed as a one-stop-shop for agencies’ administrative functions, from quoting to billing.

“The beauty of this system is that it allows small insurance companies to have the big technology typically only found in larger companies,” says Douglas Fincannon, president of IWS client Alamance Farmer’s Mutual Insurance in Graham, N.C.

20-something startup
Phil Reynolds, 31, and Chris Reynolds, 29, were close when growing up – so close they considered themselves best friends.

Both graduated from Missouri State University, Chris with a degree in computer information systems and Phil with a degree in electronic arts. After college, Chris took a programming job for Midwest Financial Networks, and Phil, now IWS’ president of products, worked at a recording studio.

In 2004, with $1,000 between them, they used their parents’ computers and founded IWS writing electronic statements for the credit union industry. “We knew it was a market that would disappear with the evolving technology,” Chris Reynolds notes.

In 2005, Nixa Farmer’s Mutual, now Old Missouri Mutual, asked the duo to write a quoting system, which they named IWSQuote. Word spread about the quoting system, and the company built a list of 12 clients.

In 2008, at clients’ requests, IWS upgraded the system to include all aspects of insurance administration, resulting in BriteCore, the company’s flagship product.

Chris Reynolds says IWS asked some of its clients to invest in the new product. The cousins invested $1 million from company earnings and borrowed only $150,000, a U.S. Small Business Administration-backed loan through Liberty Bank.

Terry Barksdale, vice president with Springfield First Community Bank, which now handles the loan, says the bank took the loan risk in this economic environment based on many factors, but work ethic played a role.

“When some people think about entrepreneurship, they just think how nice it would be to own a business,” Barksdale says. “They don’t think about the hard work that goes into it, and the Reynoldses found a niche and are hard-working.”

The business partners found they could grow the company at a good rate just by word-of-mouth among their increasing client list.

The company now claims 35 clients in 16 states. The average cost of the software is $300,000, but pricing varies, the owners say, depending on the size of the company. IWS also offers support services during the implementation and learning process, which takes between two months and nine months.

Family matters
The cousins say they have a somewhat unique practice of hiring people who may not have backgrounds in technology but have proven to be intellectual and trainable. Hires have included former architects, teachers and musicians who the Reynoldses felt could be schooled in the technology industry. That doesn’t mean that getting on at IWS is easy. “We have a very intense hiring process,” says Chris Reynolds. “We put interviewees through several rounds of interviews, and we give them a 20-hour project to complete.”

Since 2004, the company has only lost four employees and only one of those was because the staffer simply wasn’t suited for the job, says Phil Reynolds.

One of the challenges for the cousins has been doubling as family members and business partners. “We are good together and have similar personalities and background, but when things get stressful, it takes a toll on our ability to have down time and hang out without discussing work all of the time,” says Phil Reynolds.

Understanding the inherent risks, the cousins have agreed no other family members will come on board.  “We immediately set up a nepotism clause in our business agreement when we formed the company,” adds Chris Reynolds.

To improve the young entrepreneurs’ managing skills, the cousins, along with several executive team members, have attended executive workshops through MIT’s Sloan School of Management.

Goals include adding 10 clients per year, while shoring up the company’s financial position. “We want to build our reserves and slow the hiring down a bit,” says Phil Reynolds. “Our plan focuses on ramping up again in 2014.”[[In-content Ad]]