The following is the writeup of an interview I conducted with David Cohen, entrepreneur and principal of Colorado Startups, LLC and founder of TechStars.
The Foundations
David Cohen, serial entrepreneur, founder, and principal of Colorado Startups grew up in a family of five in central Florida. His father, initially a partner of a CPA firm, went on to start and grow his own firm from three to around 50 employees. Cohen attributes a lot of his early business experience to his dad, who taught him basic life and business principles, supplied him with books on money management and financial topics, and instilled a “work for reward” ethic early in his life. Interested in computers and technology at an early age, Cohen was programming computers by the time he was 13 and took advanced placement Computer Science courses in high school.
Cohen continued his interest in technology by pursuing a Computer Science undergraduate degree at a Florida university. He supported himself during this time stringing tennis racquets in a golf and tennis shop. One summer during his undergraduate career, Cohen landed an internship writing code for a Department of Defense agency. Eventually, the undergraduate experience came to an end and Cohen’s search for any suitable programming job landed him a single job interview that would change the course of his career forever.
Doing Time in the Corporate World
Cohen’s interview out of college landed him a job with a regional planning council. There he was tasked with the development and administration of a Borland Paradox database that was used to dispatch vans for transporting elderly residents around town. Cohen became the sole technologist working at the council. In addition to his database work, he quickly assumed the role and responsibilities of information technology guru, keeping the electronic equipment working and changing the occasional forgotten password. His work on the dispatch database involved an increasing amount of custom coding such that Cohen eventually sourced and recommended the expertise of a company called Automated Dispatch Services to assist with the council’s dispatch needs.
Automated Dispatch Services (ADS) brought Cohen into contact with his future business partner, David Brown, then director of engineering at ADS who was responsible for installing the ADS dispatch system for the regional planning council. The ADS solution was a DOS-based application as, at that time (circa 1992) Microsoft Windows was still in its infancy and unproven for enterprise applications. Over the course of the next couple months, Cohen became acquainted with Brown during the install phase and in a support capacity afterward as they traded off pager nights, responding to round-the-clock IT support needs.
It was at this time that Cohen and Brown started postulating their what-ifs. They questioned the current state of the ADS application, and wondered if it could be implemented faster, better, and cheaper, using the Windows platform. Targeting the Emergency Medical Services (EMS) industry and focusing specifically on dispatching ambulances, Cohen and Brown quickly worked up a proof-of-concept version that accessed the same database as the existing ADS system. They even went so far as to give a demonstration to Brown’s boss, who rejected the prototype on the grounds that Windows was too new a platform, and that ADS was not interested in pursuing the software business.
Cohen had been with the regional planning council for over a year by this time. During this time, Cohen felt that he was working extremely hard, yet being compensated at the level of a “kid out of college.” He and Brown were the single points of contact when things when wrong, and felt as though they were adding most of the value to the company. They questioned the need to build someone else’s empire, when they could be building and owning their own. The Windows prototype soon became their corporate exit strategy and the beginning of Cohen’s entrepreneurial journey.
Beginning the Entrepreneurial Journey
Unhindered by obligations imposed by material possessions or family, and lacking much business knowledge including any understanding of angel investors and venture capitalists, Cohen moved to Arizona, hired a programmer named Eran, and started work turning the prototype into a real product. This team of two worked in 12-hour shifts, Cohen in the morning, and Eran at night. Having had all financing requests turned down by various banking institutions, Eran was compensated with the promise of 1.5% in royalties per unit sold for the life of the product, and Pinpoint Technologies was born.
Starting Up
Cohen and Brown contacted a former ADS customer and arranged a demonstration of their work-in-progress. At the customer’s site, they connected their Windows version of the software to the customer’s existing database and proceeded to present the customer with their existing data alongside maps in the graphical Windows-based environment. The customer was ecstatic and agreed to loan them $100,000 in return for 2.5% in royalties per unit sold, for the life of the product.
This seed money supported four individuals’ development for a year. Pinpoint Technologies released their first version of the software in August of 1995 in conjunction with the release of Windows 95. Their first release was a disaster; however an additional three months of bug-fixes resolved many of the outstanding problems. Finally, as their money was about to run out, they attended an industry trade show, courted an interested customer, and made the second sale of their product narrowly avoiding having to close up shop.
The Turning Point
When they started, Pinpoint Technologies was intended to be a lifestyle business. They imagined, best-case, that some day they each might be making $100,000 a year in salary with at most 10 employees companywide. They never intended to start this company with the sole interest of making large financial gains, but did it more for the freedom and independence of working for themselves. During their startup phase, their primary metric was the number of months they could afford to live on their current cash balance. Cohen described a feeling of personal relief when this metric increased to around 16-18 months.
The company’s turning point came during the Y2K craze as everyone scrambled to purchase new Computer Aided Dispatch (CAD) systems to replace their legacy systems affected by the Y2K anomaly. Sales during this year hit record highs and Pinpoint Technologies was bought out by ZOLL Medical Systems at this time. The next year, they were unable to sell anything due to the mass upgrade that occurred the year earlier. This was only a temporary problem however and today, the Pinpoint Technologies system has been deployed in over 600 cities and has dispatched over 80 million ambulances. Their company, now operating under ZOLL Data Systems name, is currently operating with annual sales in the tens of millions.
(more…)
). One of the coolest parts of startup weekend was seeing everyone in the room begin to understand the concept and the bigger picture. It was like a snowball effect - as momentum increased, understanding grew and and deliverables that were being produced by each of the different teams followed a common vision. I believe the original concept was well suited for the number of people in attendance, did not require specific knowledge about any field in general, was of a scope that could be completed in a weekend, and would, in the end provide benefits to Startup Weekend itself.
