Boise tech startup CradlePoint pivots to success

Aug. 04--CradlePoint was struggling in 2011.

The company sold some of the first devices with Mi-Fi capabilities, allowing users to create their own Wi-Fi hotspots, at big-box stores. But CradlePoint's sales dropped as Chinese companies introduced similar products at lower prices. Layoffs cut the employee roster from 110 to 95.

Late in 2011, the company hired George Mulhern, a former Hewlett-Packard vice president and global business unit manager, to take the company in a new direction. Mulhern replaced Pat Sewall, one of three co-founders, who is no longer with the company.

Since 2009, CradlePoint leaders had seen the need to shift their products to meet the needs of businesses rather than individuals, Mulhern said. He said he simply sped up the process, reorganizing CradlePoint to build 3G and 4G routers and networking systems, and to develop cloud-based support services sold by subscription.

Customers include stores, restaurants, financial service companies, kiosk operators, bus systems and other businesses that need to process payments and operate computer networks in dozens or even thousands of locations on a single, secure and unified system connected wirelessly.

The transition worked. The company reported 60 percent growth in revenue in both 2012 and 2013 and is on pace to grow revenue 70 percent in 2014, Mulhern said. The company is profitable and its margins are growing, he said.

CradlePoint now has 256 employees spread among four Boise sites, including its 25,000-square-foot headquarters at 805 W. Franklin St. Executives want to move to a building large enough for the entire workforce in the coming months.

Mulhern talked about the company's progress.

Q: You'd like to hire another 20 or 30 employees before the end of the year. What's the greatest obstacle to finding talent?

A: For us, we sit at the intersection of 3G and 4G wireless and enterprise networking. Finding people with both those skill sets can sometimes be hard. We rarely do, but we find experts in one and have them learn the other. The toughest role to fill is software developers, because there's a national shortage of those folks.

Q: What spurred the transition to selling systems and services to businesses?

A: The company had wanted to do that, but when you are a startup, you are very deal-driven. Anybody who has money is your friend. But you have to go from deal-driven to market-driven if you want to develop to the next stage. Refocusing on retail and financial insurance had been an obvious path for some time. But it's easy to get distracted when a company wants to buy 20,000 units. There wasn't enough focus to get the company over that next hurdle and into enterprise.

Q: Was changing the business model a scary step?

A: All of those transitions are. But it's also exhilarating, because you can see the payoff if you get there. We hire a lot of people who like a challenge. The people attracted to smaller companies don't just want a paycheck.

Q: How many of your hires come from the Treasure Valley?

A: With companies such as Micron, HP and SAP, there are a lot of good tech workers here. I'd say 85 to 90 percent of our hiring is from the local community or within Idaho. When we have to go outside, it's for a specialized talent.

Q: You spent 20 years at HP. What's different about working at CradlePoint?

A: I worked with labs at HP that had super-talented people. But if I wanted to change what we were doing because of a change in the market, they'd say, "Oh, my gosh. We can't do that. We're so far down this path." Here, the engineers can turn on a dime. They are fast. They are flexible. They are responsive. And that's what it takes to win in an emerging market.

Q: How do you hire employees from larger tech companies?

A: It's a real growth opportunity. CradlePoint is a small company still, and everybody knows where we're going, everybody believes in that direction and everybody feels like they are making a contribution. And they are. If you have those things, it's better than a private chef or masseuse or a climbing wall. People want to feel like they are making a difference, and you really can at a company this size.

Zach Kyle: 377-6464,Twitter: @IDS_zachkyle

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