Dave Gray, one of Birmingham’s entrepreneurial leaders, is launching a new project, Biso Collective, a holding company for software businesses. Gray, who was CEO of Birmingham-based Daxko and still maintains a board seat with the company, spoke to the Birmingham Business Alliance (BBA) about his new business, why Birmingham is a great place to start a company and what has driven Birmingham’s recent tech boom.
BBA: Tell us about your new venture.
Dave Gray: We are building a family of B2B, mission-critical software-as-a-service (SaaS) companies. In essence, we are creating a holding company of SaaS businesses across a range of vertical markets. We will do this through targeted acquisitions, and we will have a buy-and-hold mentality. In other words, we aim to buy solid, growing businesses with no intended exit. We will leverage our experience scaling larger software businesses to help them grow, but at the same time, we'll provide them with a reasonable amount of autonomy. This combination delivers a compelling alternative to being acquired by a strategic buyer or undergoing a change-of-control transaction with private equity.
BBA: Why is it important that the acquired companies be headquartered here?
DG: We are not limiting our search to Birmingham only. Unfortunately, there are not enough SaaS businesses in Birmingham to accommodate our goals. However, the parent company, Biso Collective, will be headquartered in downtown Birmingham, and when it makes sense, we will move all or parts of acquired companies to the city. But we expect to have companies headquartered in other cities as well.
BBA: You built Daxko into one of Birmingham’s most successful tech companies. Why is Birmingham a great place to start a business, based off of your personal experience?
DG: First, from a pragmatic perspective, Birmingham's relatively low cost of living is a meaningful advantage. Also, the level and volume of technology talent is increasing every year, and the more successes we have will strengthen the talent here even more. Beyond pure technologists, our local universities also produce fantastic graduates that fill other critical roles such as services, sales and marketing. Finally, I believe Birmingham's entrepreneurs and operators are more collaborative and cooperative than you find in most cities. People here genuinely want to see others succeed.
BBA: How would you describe the evolution of the innovation and technology scene in Birmingham over the last decade? What has driven it? What will drive it into the next 10 years?
DG: I think the technology ecosystem is more visible and evident than it was 10 years ago. Some of that has been led by organizations like TechBirmingham, Innovation Depot and the Birmingham Venture Club. However, I believe most of it comes from visible successes by companies like Daxko, Theranest, Fleetio, Shipt, McLeod Software and others. These success stories have moved to the forefront and are more evident to Birmingham's business community. I think this in turn attracts talent to these companies as they gain broader exposure, and they also act as inspiration for the next round of entrepreneurs to start something themselves. As we continue to have a steady stream of successes, it will spawn even more in the future. It's a “virtuous circle.” Success begets success.
BBA: Your new venture will partner with EBSCO, a major employer that also that also calls Birmingham home. Why did you choose EBSCO to partner with on this journey?
DG: I couldn't be more excited to partner with EBSCO. I don't think there is another company that checked all the boxes the way they do. First, they have a great entrepreneurial founding story that grew into one of the state's largest and most successful companies. We also have a mutual long-term mentality and a shared bias towards Birmingham. Plus, they have a strong, consistent track record of growth through both acquisitions and organic growth, which is our intent with Biso.
BBA: What will be the marks of success with this new venture – number of companies helped? Revenue?
DG: We have not set specific goals on number of acquisitions. That will depend on a number of factors, including size of each company. However, over the next five to 10 years, I envision us building a “collective” generating $100 million in revenue.
BBA: A year from now, what do you hope can be said about your new venture?
DG: A year is not that long with a venture like this. I'm far more focused on what we will be five, 10 or 15 years from now. But in a year, I hope we have one or more acquisitions done, and we have established ourselves as a “third option” versus the two more traditional alternatives of selling to a strategic buyer or private equity firm. We intend to create a home for SaaS businesses where they can continue to flourish and provide owners and entrepreneurs an outcome they can be proud of.