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Value Added: Past business leaders chart his path to profits


Matt Calkins is a history buff who applies what he learns from business biographies to running his soaring Reston software enterprise, which is on track to earn a healthy profit this year on revenue of $75 million to $100 million.

Calkins, 40, won’t say exactly how much profit he’s earning, but his company, named Appian for the ancient Roman highway, is doing well enough to stash
$5 million in cash in the firm’s asset ledger. Year after year after year. He said he is salaried, “underpaid,” has never taken a dividend and owns more than half of Appian, which has 250 employees.

Thomas Heath is a local business reporter and columnist, writing about entrepreneurs and various companies big and small in the Washington Metropolitan area. Previously, he wrote about the business of sports for The Post’s sports section for most of a decade. View Archive

I could make this column a story about a healthy technology company, but — like Calkins — I love business history, and business biographies in particular.

Let’s go there first.

I asked how the business lessons he gleans from history apply to his job as chief executive of a software company.

Matt Calkins is chairman and CEO of Appian Corporation, based in Reston, Va. (Jeffrey MacMillan/For The Washington Post)

“I love to draw upon historical perspective when I make decisions, like the way [the late General Motors chairman] Alfred Sloan organized the car industry,” Calkins said. “It is extremely relevant to the way our software industry evolves.”

Sloan’s autobiography, “My Years With General Motors,” which many consider a textbook on how to manage a company, is still relevant, Calkins says.

“It shows the way, a hundred years ago, the auto industry was grappling with the same deep uncertainty that the software industry is grappling with now,” he said. “Sloan is a terrific guide on how to create the patterns that constitute an industry.

“A lot of industries begin with the profusion of businesses, and they have a contraction, like an extinction event. Cars are a great example. Oil is also.”

Which leads us to another favorite book of ours: “Titan,” Ron Chernow’s biography of John D. Rockefeller, whose Standard Oil monopoly — think Exxon, Mobil, Chevron, Amoco rolled into one — brought order, and some would say price-fixing, to a nascent industry.

“The great thing about John D. Rockefeller is he is an executive and visionary at once,” said Calkins. “He wrestles with philosophical problems like ‘Is a monopoly good?’ His version was yes. He based it on rescuing the oil-refinery industry from the boom-bust cycle.”

Calkins hashes over history every few weeks with four or five friends who come together in his Great Falls home to discuss the events and people relevant to a single year. The group started a few years ago with a discussion of the year 1900, and it has moved forward to 1970.

“We have debates about what was the most important X of the year,” Calkins said. “X can be birth, death, science innovation, political events, discovery, disaster or a commercial innovation like the Model T,” which was automaker Henry Ford’s seminal product that made cars affordable for the masses.

“You have to know what you are talking about,” said Calkins, who graduated from Dartmouth College with a degree in economics. “If they are unprepared, they know it. We are not unkind. We ask, ‘It’s 1952. What do you think?’ ”

I asked Calkins: What is the most formative event of the last 100 years?

His answer: Charles A. Lindbergh’s 1927 solo flight from New York to Paris.

“It is an achievement made possible by science, which elevates the possibilities of a human being — science making people greater than they used to be.

“There is something poetic about the accomplishment. A 25-year-old could fly across the Atlantic on his own before organized teams could do it. He accomplished this with personal will. It opens the world to a new kind of perspective.”

Calkins started his career on the ground at MicroStrategy, where he currently sits on the board. He was earning less than $100,000 a year as director of enterprise software when in 1999, after more than five years on the job, he struck out on his own.

“I walked away from $2 million to $3 million in stock options,” Calkins said. Don’t feel too sorry for him. His stake in Appian is worth tens of millions. His only other partner in the firm is Novak Biddle, the Bethesda-based venture-capital firm, which bought a chunk in 2008.

Calkins said he saw an opening in creating software that helps companies do boring things like collect bills, keep records and make decisions in the field. Instead of being exclusively for specialists, the software can be used by anyone who can read.

He and his three partners, all of whom still work there, began in Calkins’s McLean apartment with $5,000 in savings.

“Later I bought a house, partially in order that I would have a basement in which to put the company. We went to colleges to hire our first employees. We made our first money by doing consulting work, selling research and writing custom software.”

They spent $10 million building a piece of software easy enough to use that “someone could come in from the street and figure it out.”

Appian has hundreds of clients, including, Starbucks and Enterprise Rent-a-Car. The U.S. Army, Fidelity Investments and the Chicago Mercantile Exchange all use Appian. But what do they do with it? He gave me some examples.

One of Appian’s clients is Crawford, an insurance company that responds to natural disasters such as hurricanes, tsunamis and earthquakes.

“When there is a natural disaster, they need to send teams overnight to appraise the damage,” Calkins said. “The people are contractors, and to coordinate those people and action in the field, they need to use our software. ‘Here is your plane ticket and password from Appian. Just go,’” is how Calkins describes it.

Starbucks, which last week reported a big jump in quarterly profit, is another example.

“Starbucks does inspections of every one of its stores. [Our software] runs on the iPad, where they fill out forms, upload pictures, fill out their score. By the time they are done, they have an instant score and instant changes, and headquarters is notified right away.”

Appian is doing for software what Ford did for automobiles: bringing democratization of an industry to the masses.

“We are like a mini Model T,” the history buff said.



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