By Jeanette Brown
Times have sure changed since Jim Dougherty began his career in technology 25 years ago. In the late 1970s, fresh out of college, he took a job at Boston-based Raytheon Co., designing minicomputers for the military that would be hardy enough to withstand near-nuclear blasts and continue to work. A tall order, true. But it was no more difficult than the one he faces today: turning New York-based IntraLinks Inc. into a success in the face of withering market conditions.
IntraLinks provides an infrastructure through which large institutions -- mostly banks and law firms -- can collaborate with partners across international borders and time zones in a secure manner. Dougherty, 43, joined IntraLinks a year ago. In March, he helped raise $50 million in venture-capital funding to keep the company running -- since twice it has had to cancel plans to go public because of the bear market for tech stocks.
Dougherty chose IntraLinks over several other opportunities because it "looks through the right end of the telescope," he says. Rather than create a technology first and then find customers to use it, the company builds technology based on identified consumer needs. IntraLinks went to the lawyers, the bankers, and the research scientists and designed a solution from that point backwards. "We are the opposite of 'If you build it, they will come,'" he says.
The result is an easy-to-use service providing secure online environments, called "workspaces," that house all of the documentation for extremely paper-intensive deals. And all that participants need is an Internet browser and authorization from the institution overseeing the transaction.
Dougherty brings a wealth of experience to IntraLinks. After a couple of years at Raytheon and four more at General Data, Dougherty took a job with Lotus Development Corp., where he served as general manager of the electronics applications division. "At Lotus I started to see that globalization and technology were intertwined and mutually supported," he says. "I knew something about technology, and I wanted to learn something about globalization," he says.
So he dropped out of the corporate world for a couple of years and became one of very few full-time Columbia University graduate students with a wife, three kids, two houses, and a dog. "I have always chosen to do relatively fewer things and hurl myself at them 100%," he says.
After completing his master's degree in international politics and economics in 1995, Dougherty took a senior executive job at iFusion, a New York startup providing graphic-design and marketing services. Next stop: CEO of Prodigy's software division, which makes, among other things, Web-site building tools for small businesses. As Prodigy prepared to relocate to Houston in 1999 -- a move Dougherty was not excited about making himself -- the opportunity to go to IntraLinks arose.
Dougherty's arrival at IntraLinks was well-timed. The now-five-year-old company was in a transition stage, shifting from the heady experience of being a startup to the sobering reality of making a business work. The company needed someone who could build on the entrepreneurial work of the founders, Mark Adams, John Muldoon, and Arthur Sculley, and who could lead large teams and motivate people. The founders ceded responsibility to Dougherty and maintained positions on the board after his arrival.
"Jim is very action-oriented," says Brendan Byrne, an IntraLinks general manager. "He gets in, gets to know what he needs to know, and then he takes action." One of the first things he changed was the business model from a traditional software-licensing system to a subscription system, which he believes will provide a more predictable revenue stream. In January, all of IntraLinks' 100 customers had signed subscription agreements.
IntraLinks is small but growing fast. Its total 2000 revenue hit $13.2 million, up from $4.1 million the year before. Since then, 10 new customers have been signed, and Dougherty anticipates that the company will reach profitability by mid-2002.
What excites Dougherty most about being at IntraLinks is getting to tap his international economic expertise and the greater understanding of globalization he sought through his graduate studies. "I bring value to my customers and my company because I understand the situation my customers are in, I can work across borders, I deal comfortably with foreign companies, and I can easily bring intellectual capital in and out of negotiations," he says. IntraLinks has customers in 92 countries.
Credit Lyonnais Americas, for example, has used IntraLinks to distribute information for its syndications business since May, 2000. Thanks to IntraLinks' service, Credit Lyonnais can now put together a 100-page syndicated loan package for a client, shop that package out to a number of banks, find an interested party, and complete all the legal documentation required to finalize the deal -- all on their own secure Web site. This saves the cost of paper, printing, and shipping, as well as valuable time. "Our cost on the distribution of information has decreased on a per-deal rate by 30%-40%," says Bob Angarola, first vice-president and chief administrative officer for Credit Lyonnais. "Distributing information for our syndications business through IntraLinks is more timely, more efficient, and less expensive."
IntraLinks counts among its other customers J.P. Morgan, Bank of America, Chase Manhattan, and R.W. Johnson Pharmaceutical Research Institute. Dougherty hopes to expand IntraLinks' reach beyond financial services and pharmaceuticals to professional services, insurance, and legal markets in the coming year. "Intercompany collaboration is a burgeoning market," says Dougherty.
A VOTE OF CONFIDENCE.
Analysts agree. Says MetaGroup analyst Matt Cain: "The demand for intercompany collaboration is huge." MetaGroup anticipates that every knowledge worker in its own client base will have access to intercompany collaboration infrastructure within three years, he says. And seizing additional markets is a very important move for IntraLinks. "They have early-mover status in the financial community, and I would like to see them come out with similar sound offerings in other areas," Cain says. "If they don't, we will see others do so aggressively," he adds. There are several competitors for the intercompany collaboration market, among them publicly traded Tumbleweed and Critical Path.
Investors also give IntraLinks and Dougherty their vote of confidence. "This company has proven that the product works and that the value proposition is there," says Habib Kairouz, managing director at Rho Ventures, which led the $50 million funding round that closed in January. Dougherty's role as CEO was a critical factor in their decision to invest. "Now we're at a stage where execution is key and fast execution is also key," he says.
Dougherty is happy with the task in front of him, but his 11-year-old daughter is not so sure she wants to follow in his footsteps. After a day on the job with Dad last week, which lasted from 6:30 in the morning until 10 at night, she said to him: "I like what you do, but I want to do something else."
She has her sites set on astronomy, says Dougherty. Well, at least an appreciation of telescopes seems to run in the family.
Brown covers tech companies for BusinessWeek in New York