"Let's See What It's Like to Push the Gas Pedal Down": Q&A with Josh Brown, Founder of PowerDMS
In January 2018, Frontier announced its growth equity investment in Orlando-based PowerDMS, a leading provider of cloud-based software for compliance and content management. Discover what company founder Josh Brown has to say about Frontier’s appreciation of business subtleties (like culture), how building and driving a car provides a metaphor for his company’s growth — and why he’s ready to let go of the wheel.
Please introduce yourself and discuss the genesis of PowerDMS – how was the company born?
Josh: I really enjoy solving business challenges — that’s something I discovered while working in IT administration at a Florida sheriff's office for about 12 years. During that time, I taught myself to program and built a couple browser apps for the sheriff’s office. I wondered if that could provide opportunities for entrepreneurship, so I started thinking about software products that I could write and resell.
The lightbulb moment came when I saw a bunch of filing cabinets being moved into our accreditation manager’s office. It bothered me because I’d been on a paperless-office crusade, so I asked why we needed them. I discovered that for police, accreditation was very paper intensive. Written directives had to be disseminated to all of the offices — covering anything from use of force to evidence processing — and then acknowledged and filed away. That spurred the original idea behind PowerDMS: Use software to eliminate the immense inefficiencies related to the accreditation process for law enforcement agencies.
What expectations did you have initially for your business idea, and how have those expectations changed?
Josh: The idea was exciting because I knew this was a widespread challenge for sheriff’s offices. PowerDMS is a product that solved a very basic need of distributing and storing these policies electronically— to help agencies reduce risk and avoid wasting time (and paper). I believed I could sell it throughout the state of Florida. But since founding the company in 2001, I’ve discovered there’s a much larger market. Many organizations need to ensure compliance and improve performance. So in addition to the 2,000 law enforcement agencies nationwide that use our product, we’ve expanded into other industries — like healthcare, fire departments, and corrections facilities.
When did you decide that additional capital was needed to grow the business?
Josh: PowerDMS was a bootstrapped company, owner led and operated for a long period, and not yet the growth company it is today. Around 2013, we were aware of the market opportunity for software and services companies, were well-connected to our customer base, and we took a small, initial round of funding from a regional venture capital firm. We saw a lot of growth through that investment, but about three years in, I was at an inflection point where I knew that in order to grow to the scale that we would need to compete and position PowerDMS as a solid contender at the next level, we needed some capital partners that would not only provide the additional capital, but would bring a growth playbook to help us get there.
You spoke with several potential investors when you were ready for that next stage of growth. Why did you choose Frontier?
Josh: It takes a great deal to translate all the nuances in any business to an investor. Understanding the sales thesis, the cultural elements, the financial model. There's just a huge amount of information there — and as with any good company, most of it is encapsulated in the human talent behind the business. Any sort of investment deck is a bit of a crude proxy for the actual depth that the business engages in.
During initial discussions with investors - we didn’t engage in a formal sales process, but we did have discussions with several potential investors - you work around that deck. But as that conversation grows, you see if they connect. Are they seeing the market in the same way, and the culture, and the financial models? When we talked with other investors, they ultimately asked questions that showed they didn’t fully understand our business. That wasn’t the case with Frontier because of their focus and experience with companies at our stage. It feels very organic that they found us and we found them. The moment we connected and engaged with Michael Ramich and Tim Bechtold, it was a natural process, with natural dialogue and we really got each other. They understood our business – the strengths, the weaknesses, the opportunities - and they appreciated the subtleties and the complex ecosystem of our market.
Given that Frontier’s investment is still fairly new, how have the first few months been? How do you envision Frontier partnering with PowerDMS to add value to your business?
Josh: They’ve been very supportive. I've taken a lot of comfort in knowing that PowerDMS is an asset that could only benefit from a team of quality investors empowering its growth. Frontier’s level of involvement is deeper than our first venture capital investor’s, but that’s natural at this stage in our development. With Frontier, it’s like, “Hey, this is a set of investors that really has a lot of insight into how to scale a business like PowerDMS." And I sincerely want to see it become all it can be within the market. Certainly, it has been a process of emotionally and physically letting go of this business I started, but its also fulfilling to see its success as it becomes stronger in its foundations. In that way, it's been neat to see Frontier’s engagement.
Is there anything else you would like to share about your experience with Frontier?
Josh: When I connected with selling off a majority stake, I felt some initial trepidation — but there was also this unique feeling of freedom. You spend a lot of time building a business made up of all these elements: the culture, the systems, the processes, the people. I ran the business as if it was a car that I built. I had a certain way that I drove it. But I built it in a way that makes it capable of more. So there’s a rewarding feeling of, “Let's see what it's like to push the gas pedal down a little bit on this thing.” That analogy, for some reason, is real to me. So it will be interesting to see how it performs with a little bit more acceleration towards the market that we are after. I feel a huge amount of gratitude to have had this experience with Frontier.