Founder of Early UW Spin-off Company Sells His Success
September 27, 2012 — Twenty-five years ago -- in the days before there was a Wyoming Technology Business Center to nurture a business and the Internet to promote it -- Mike Kmetz was a pioneer.
In 1986, Kmetz created IDES, which represented the first spin-off business to emerge from the University of Wyoming. While a doctoral student majoring in mechanical engineering at UW, he worked on a research project for IBM. As a result, Kmetz created the IDES Prospector Plastic Materials Database, an intuitive, user-friendly online search engine that catalogs plastic materials properties.
Today, the database lists more than 85,000 plastic materials and 875 global plastic manufacturers. The database -- available in seven languages -- is used by more than 319,000 industry users worldwide, according to the IDES website.
In July, Kmetz sold IDES, the leading informational resource company for plastic materials, to UL, a Northbrook, Ill.-based company that is a world leader in advancing workplace safety. He did so, he says, because it was a way to keep the Laramie business growing globally.
By his own admission, Kmetz says IDES had “done a decent job in North America, a less-than-decent job in Europe and a really less-than-decent job in Asia.”
“We can expand in our product and service offerings, and definitely be a more global organization,” says Kmetz, who now holds the title of manager of UL/IDES.
However, one stipulation of selling his company was that it remained based in Laramie. Since the summer sale, Kmetz has grown his workforce from 12 to 17.
“We’re going to continue to be a job creator here,” he says. “Of those five (new employees) we’ve hired, four are UW graduates.”
From an idea to an industry
In 1986, IBM was looking for a way to reference technical information for the plastics it was using to develop its computer products. At the time, if IBM needed particular plastic materials, the company would often just scroll the yellow pages; call a company to see whether it had the necessary materials; and had the companies send bulky three-ring binders of their listed materials.
“There was no way to do real comparisons. It was a nightmare,” Kmetz says.
Looking for a way to increase efficiencies, IBM came to UW to obtain assistance and conduct research with faculty. Kmetz, a doctoral candidate at the time, was part of the university effort.
“Companies had an issue of finding the right materials. If you wanted to make something out of plastics, there were 10,000 materials then. There are 80,000 today,” Kmetz says. “I thought, if they had a database, it would help those companies locate materials.”
During this collaborative period, Kmetz says those involved with the project called all of the applicable companies they could find, and had the companies send their three-ring binders of plastic materials information. Thus began the painstaking task of writing computer code and creating a computer database to house all of the data in a way that was useful. Database categories included what plastics might work for certain applications and whether various plastics were resistant to dropping.
“We installed the database off of floppy disks. We worked on it for about a year,” Kmetz says.
When the project was finished, IBM moved its technical products center from Boulder, Colo., to Lexington, Ky. Because of the distance the move created, IBM said it couldn’t effectively maintain its relationship with UW.
“They (IBM) said we had the rights to the intellectual property,” Kmetz says.
Urged by then-UW Engineering Professor Kynric Pell to start a business, Kmetz and Don Blackketter, his business partner at the time and a 1985 UW graduate with a master’s degree in mechanical engineering, decided to launch IDES.
“I think that we realized that not just IBM could use this, but any businesses that could use plastics,” Kmetz says. “At that time, companies were moving from using steel to using plastics. And there were no longer cheap plastics. Very durable plastics were being developed. We thought that would continue to evolve.”
By the bootstraps
With backgrounds in engineering but virtually no business experience, Kmetz and Blackketter started IDES -- in Kmetz’s house, at 1114 Harney St. in Laramie.
“When we started, we were at ground zero,” Kmetz says. “At the time, we didn’t have a real understanding of the market and no sales strategy. We learned on the job.”
After the company attracted a few employees, the foot traffic through the house became awkward, especially when Kmetz and his wife decided to start a family. As Kmetz recalls, “She strongly encouraged us to move elsewhere.”
IDES relocated to the Wagner Building in downtown Laramie, where it remained for 17 years. By that time, Blackketter had left to pursue his doctorate and eventually became a college professor. The company broke even its first three years, surviving on some initial investment income and the moral support of companies that said IDES was on the right track.
“We literally bootstrapped the company. We had very little financial resources that got us going,” he says.
In the early days, Kmetz recalls numerous road trips to visit with prospective companies. He also had a key contact who was able to obtain, for IDES, free print advertising in trade publications and magazines.
“These ads would generate tons of leads,” he says. “That led us to the next step of starting a telemarketing group whose sole job was to get on the phones and grow our sales. None of it was rocket science. We just figured it out as we went ahead.”
The company got its first customer when Monsanto invited Kmetz to St. Louis for a sales pitch. The company bit and asked Kmetz what it would cost.
“How naïve were we? We didn’t know,” Kmetz says. “We had to go back, called them the next day and gave them a price. The guy says ‘Let’s go.’ We had a success right out of the box.”
Highs and lows
With the dawn of the Internet, a large chemical company hired IDES to put all of its information on the Web. That led to more business, which grew as IDES developed its plastics material database. The database generated revenues from advertising and subscription fees. In addition to the database information, the subscription entitled companies to participate in business webinars and receive IDES’ expertise in locating materials and developing their customers’ company websites.
To continue to build leads, Kmetz kept the database portion of the IDES website free for browsing only. Today, IDES has 200 new users a day come to its site, he says.
At its apex in terms of employees, IDES had approximately 75 -- 50 full-time and 25 part-time -- in 2000. Due to a high demand from multiple dot.com businesses and chemical companies feeling threatened by the emerging online enterprises, IDES had plenty of demand for its services.
But then the dot.com bust happened, which brought that workload to an abrupt halt.
“The dot.com companies spent all of their money. Not feeling threatened, the chemical companies backed off,” Kmetz recalls. “We had two rounds of pretty substantial layoffs. Without a doubt, that was the low point in my career.”
During that period, company revenues took a hit and remaining employees were nervous about their jobs. Kmetz says he had to do a lot to keep remaining employees with the company. That experience led to changing his business philosophy from one of constant growth to limiting expenses and maximizing profits.
“In hindsight, that low probably allowed me to be positioned for much greater success,” Kmetz says. “In the ‘90s, I thought we would grow to 250 employees. Then, things changed. I decided to make the most with the staff we had and developed technology.”
A new opportunity
For the past five years, IDES has operated out of offices at 1604 Grand Ave. With room to expand at its current location, Kmetz says UL provided an opportunity to allow IDES to move to the next level.
“They pursued us. The most important thing they wanted were the people we had here,” he says. “This allows for continued expansion of our business. We’re part of a much bigger company now. We have resources we did not have before.”
According to its website, UL is described as a premier global independent safety science company that has been in business 118 years. The company employs more than 9,000 people in more than 100 countries. It has five distinct business units -- product safety, environment, life & health, knowledge services and verification services -- to meet the expanding needs of its customers and deliver on its public safety mission.
“I’m going to do this as long as we continue to add value to UL, and as long as I continue to have fun and work with the great folks here at the company,” Kmetz says. “It was a collective effort that got us to where we are. I can’t thank my team enough.”
Mike Kmetz stands outside the entrance to IDES, a company he started in Laramie in 1986.