Diverse, nimble and growing for 40 years in tech services

The world had to wait two years after John Weidenhammer in 1978 started his eponymous information-technology company for IBM’s first 1-gigabyte hard drive – as big as a refrigerator, weighing about 550 pounds and costing $40,000.

Microsoft was only 3 years old, Apple, a thumb-sucking 2. The World Wide Web was 11 years in the future.

Known as Weidenhammer, the company started in a spare bedroom in Wyomissing and has grown to annual sales of more than $40 million, 180 employees and operations in four states and Argentina. It celebrated its 40th anniversary last month and also plans a family picnic this summer and is encouraging employees to volunteer for causes and organizations.

Weidenhammer’s ride, though, is far from over. The founder is most gleeful considering the future rather than the past, describing current projects that will help disrupt industries with clever software.

For example, one client wants to apply an Uber-like car-call model to property maintenance and be able to offer lower costs. Another idea is helping insurance companies save money by nudging patients to get preventive health care with regular doctor visits.

GLUT OF OPPORTUNITIES

Weidenhammer wanted to grow fast at the beginning. Experience at Carpenter Technology, a Reading steel maker, and accounting/financial services company Ernst & Ernst [now Ernst & Young] had given him a global perspective.

“When Weidenhammer got started, I had that in the back of my mind,” he said.

The field was growing so quickly, “you just had to show up. … There was a gold-rush mentality amid the opportunities,” he said.

Raising capital was a barrier, however, and for 10 years, he said, he worried about making payroll. He didn’t want to borrow – interest rates peaked at nearly 21 percent in June 1981.

LANDING YOUNG, TALENTED STAFF

Weidenhammer has managed information technology for Rentokil, a worldwide pest-control service, since it was Reading-based J.C. Ehrlich Co.

David Fisher, Rentokil’s senior vice president of operations, noted that many of the same people involved in installing the system 20 years ago are still on Weidenhammer’s team, giving the company a great advantage over competitors.

Turnover is low among his 180 employees, Weidenhammer said, with an average tenure of more than 11 years. Attracting talent is an issue; with nearly full employment, he must lure workers from competitors.

Weidenhammer said the office in center city Philadelphia helps attract talented young people who want an urban lifestyle. Similarly, offices near Western Michigan University’s Innovation Center in Kalamazoo and near the Denver Technology Center in Colorado keep him close to talent sources.

REINVESTMENT IN TECH

Weidenhammer wasn’t reluctant to describe his three-pronged formula for success.

First, he maintains multiple business lines concurrently, in different stages of development and adoption.

He analyzes where a product is in its life cycle. Those at their peak, during rapid growth when few competitors can keep up, “throw off the cash” used to nurture new technology applications until they start to pay off.

Less competitive and less profitable lines are allowed to pass on.

CONTROLLED GROWTH

Second, Weidenhammer deepens relationships with clients, from vendor to preferred vendor to trusted adviser.

Fisher said Weidenhammer staff seem to have as deep an understanding of the company’s operations as its own executives.

Finally, Weidenhammer works to grow the company modestly every year. Large companies perform better, Weidenhammer said, and size allows him to better maintain his strategy of diversity.

He won’t get too big, though – the sweet spot is big enough to offer comprehensive services, have a deep talent pool and enjoy economies of scale – but small enough to “have leaders engaged in the delivery of solutions,” he said.

ACQUISITIONS

In November 2016, Weidenhammer bought Praxis Information Science, a small e-commerce company in Texas.

The most recent of the company’s 11 acquisitions was last year of Shufflebox, a video production company in Kutztown. Weidenhammer thinks video will replace all text on websites, noting that even now young people are more apt to search YouTube than Google for information.

Along the way, Weidenhammer was part of Rentokil’s explosive growth, Fisher said. A major challenge of that growth was transferring data from new companies into Rentokil’s system as it grew from 700 to 7,000 employees.

“Acquisition is part of our daily life,” Fisher said, noting 64 acquisitions in the last five years.

WONDER OF TECHNOLOGY

Weidenhammer thinks people generally underestimate the benefits and advantages of new technology.

For example, people lined up around his building in 1994 to see Weidenhammer’s internet system, even before primitive browsers existed to let one search for websites and information.

“People were so eager to learn about it,” he said.

VISIONARY

So, Weidenhammer was surprised in 2004 when members of a class he was teaching about the business benefits of the internet told him they thought such talk was hype and that the future of the internet was overblown.

“I was just blown away by the reaction and that the people in the class couldn’t see the potential that I was seeing,” he said.

Fisher said Weidenhammer was prescient with handheld devices for workers in the field, which let companies abandon paper reports and digitize customer information.

“It was primitive, but it was way ahead of its time,” Fisher said.