Patience is not usually considered a virtue for entrepreneurs. But as George Lutas has discovered, it is something he can't survive without these days.
"I thought I'd be rich by now but I'm not," said the 25-year-old Lutas, a local computer software entrepreneur who quit his $33,000-a-year consulting job two years ago to start his own company, Renaissance Information Solutions.
After making several product revisions, missing one self-imposed deadline after another and surviving without a regular paycheck, Lutas and his partner, 27-year-old Aaron Wang, are putting the final touches on a prototype of their new software program and preparing to pound the pavement in search of much-needed funding.
The immediate challenge for the two former Massachusetts Institute of Technology fraternity brothers is to raise $7.5 million from investors so they can hire additional staff to help STARTING UP FIFTH IN AN OCCASIONAL SERIES
develop and market their software. At the same time, they are laboring to debug their program.
"It's been a lot more difficult than we thought it would be to design an excellent product," said Wang, who joined Lutas one year ago after leaving his $38,000-a-year consulting job at the Booz-Allen Hamilton consulting firm.
Lutas and Wang are developing what they hope will be the premier people-management software for the personal computer market. Their product, which uses text, numbers, pictures, graphics and sound as well as data files from other software applications, is designed to give computer users a more efficient and flexible way to track projects and organize information about customers, contacts and employees.
"We are taking information management out of the hands of programmers and putting it into the hands of users," said Lutas, "in the same way that spreadsheets made financial analysis available to the user."
Although president Lutas and vice president Wang insist their product is unlike any other on the market, they said they will be competing against three basic types of software: sales-force packages that monitor customer accounts; personal information managers that keep track of lists, appointments and schedules" and "groupwork" programs that allow different computers to interact and share data. There already are several dominant players in each of those areas, including Lotus Development Corp. and International Business Machine Corp.
In recent weeks, the two entrepreneurs have been working feverishly to complete their prototype and finish their business plan. "Our goal is to raise the $7.5 million in $100,000 blocks," said Lutas, who has been living off credit cards and a friend's $45,000 investment since leaving his job at Strategic Planning Associates. He also has worked at part-time jobs -- including a stint as a water filter salesman -- to help make ends meet.
As much a salesman as computer expert, Lutas has not scaled back his ambitious software development plans, despite the myriad financial and technical obstacles he still faces.
"I think we're at a point now where we're going to get the money," Lutas said.
"We'd love to hook up with a computer hardware manufacturer that wants to get into the software business or an individual who wants to make an investment with a very high rate of return. If our product fulfills the potential we think it has, our investors will make 100 times their initial investment. Our prototype is already better than anything else out there on the market," Lutas said.
"And we conservatively estimate that the final version will be 100 times better than the prototype," added Wang.
This self-assurance permeates the partners' business plan, a copy of which was given to The Post with the request that specific details not be divulged so that competitors could not copy their idea.
If they raise $7.5 million, the pair said they can complete development of the commercial version of the product and start selling it within 18 months. Of the $7.5 million, $3 million is earmarked for product development, $3 million for marketing and $1.5 million for unforeseen expenses. They said they expect their company to become profitable within one year of product rollout and to be producing revenue of $132 million within five years, which means selling more than 600,000 units. They predicted that their staff will grow from 13 in the first year to 500 by the fifth year.
While all their efforts are focused on their single program, Lutas and Wang make little secret of their dream to someday dominate the entire software industry. An earlier draft of their business plan gave a glimpse of their vision in its first sentence: "The goal of Renaissance Information Solutions is to achieve the position of the source of software, information planning, and information services in the United States and world markets."
But day-to-day life is filled with mundane details. During a demonstration of their software in Lutas's cramped Adams Morgan apartment, which doubles as his office while his roommate is at work, Lutas grimaced. An important piece of information had inexplicably disappeared from the screen and could not be retrieved.
"Hey, Aaron," he shouted across the apartment to his ace programmer. "I just found another bug." Wang rushed over to survey the scene. He explained that they have caught all the simple bugs and only the complicated ones remain. "The bugs are getting much more esoteric," he said with minor irritation. "They are harder to find. ... Debugging is intuitive. It's an art. It's inherent in software development. All we can do is test our program out as much as we can."
In June, Lutas and Wang previewed their prototype for a college friend who works with a venture capital firm n Boston. "He told us it was good but it wasn't as persuasive as it could be," said Lutas. "He said there was still more work for us to do."
After modifying the program another time, Lutas and Wang assembled three small focus groups of friends and associates in August to evaluate the prototype. Twenty-five people, from private- and public-sector organizations, were given the chance to see the software firsthand.
"The response was overwhelmingly positive with only one exception," said Kirk Holmes, a local marketing consultant and fellow MIT graduate who has been assisting Lutas and Wang with their strategy. "One guy said he thought it was neat but he didn't need it. Everyone else said they would buy it right away."
"It seems to be a new approach to handling data and using it," said Bill Dorotinsky, a budget analyst at the Office of Management and Budget who attended one of the focus group sessions. "When I saw it in August, they still had a lot more to finish. But I was impressed."
Another focus group participant, Aaron Estis, a consultant at KPMG Peat Marwick, agreed: "It seems to be a logical and good way of organizing work. It reflects the way a person thinks about problems, not a machine."
While the process of refining their software product drags on, Lutas and Wang say they have no regrets about quitting their jobs and staking their future on Renaissance Information Solutions.
"The best thing I've ever done is quit my job and start this company," said Lutas. "Doing this has been everything but boring. It's been exciting and at times it's been frustrating. But if you want to be an entrepreneur, you can't sit around for 20 years contemplating your navel. You have to trust yourself. You have to be ready to go all the way. And you have to be ready to make a lot of mistakes."