DevDigital Founders Invest in a New Equity Initiative
By Lee Rennick
Leading digital development firm DevDigital is located in a small, unassuming, turn-of-the-century building across from The Standard, a trendy restaurant in downtown Nashville. Looks can be deceiving, though: Inside, the space has the look of a funky advertising firm with open space and a bullpen-like conference room.
Owners Peter Marcum and Mitch Ballard began with three employees in 2008, and currently have more than 75 employees between their offices in Nashville and Baroda, India. They create digital applications, including everything from apps to enterprise solutions, for more than 850 clients. Clients range from entrepreneurs to family-owned companies (like Demos Restaurants) to multiple Fortune 500 companies.
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As they have grown their business, some entrepreneurs who have come to them for their programming savvy have become partners in new ventures. This has led to the creation of a new company called Kernel. The equity firm has grown an estimated eight thousand percent in eight years.
“While we enjoy working with all of our clients,” said Marcum, “some of the entrepreneurs who have come to us with an idea have inspired us to invest in their idea. We have allowed them to skip the venture capital step in the business development process. That is why we are creating Kernel.”
Kernel will start with eight clients:
- Compliance Umbrella, a firm providing systems that establish regulatory practices at minimum costs to businesses
- OnSomble, a human capital assessment program carried out through role-playing
- CoreCommerce, a firm allowing companies to do international business and maximize exchange rates in addition to providing a complete online sales management system
- LifeFilez, a company allowing seniors and their adult children to keep important documents (like powers of attorney or living wills) in secure cloud storage for easy access when needed during emergency situations
- EVVentus, a company that helps home healthcare services track patient care more effectively
- Compass, which produces automated management reports for orthopedic practices
- kalatech, which provides touring, publishing and booking software
- maxxcontent, a digital teaching and entertainment system for correctional facilities
Already, DevDigital has see their investments grow. Kalatech, their largest investment, is taking off in the music world.
DevDigital has brought in Todd McCullough as Kernel’s Chairman. McCullough has worked with global brands in a dozen different industries on strategies for innovation and growth. His accomplishments include working with Ford on their turn around, Coke on their Innovation DNA, and WellPoint’s $18 million startup.
“Our goal,” said McCullough, “is to pull groups together to create a team to make a product. But we want to create a new way to innovate.”
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McCullough says that startups often have holes in one of the following elements in their structure:
- A strong concept that has been nurtured and refined over time
- A talented, energized and committed team
- Smart tools and methods proven to work
- Great technology appropriate to their business stage
- Smart funding that fits their purpose
“[Often startups] may not even recognize the hole,” said McCullough, “or they may fear they can’t afford to acquire the missing piece, and this becomes a failure mode.”
According to McCullough, Kernel will be able to address these holes and collaborate holistically on business problems. Kernel has brought together a team with strong technical abilities, strategy experience and real-world knowledge from helping other startups.
Marcum has a long history of business building beginning in the 1980s. One of his companies, Essex Technology Group, became eBay’s largest store. Long interested in technology, he constantly keeps his hand on the pulse of what is up-and-coming in the industry.
“When I was starting DevDigital, there were just some clients whom I sat down over coffee with who saw things the way we do, and we just clicked, “said Marcum. “I knew I wanted to be a part of their growth. That is how it got started.”