A Software Startup in Paradise
Will success drive Logos back to the city from its island home?
Second in a series on moving your business to the country
When Bob Pritchett, the 28-year-old president of Logos Research Systems
Inc., flies out of his home base, he sometimes sits next to the pilot of
the eight-seat, Alaska Airlines turboprop. "There aren't too many commercial
flights where you're warned not to touch the throttle," he chuckles.
Or high-tech companies whose headquarters shake in the wind. Or lose
their phone service and Internet connections on really blustery days. Or
face a two-hour round-trip boat run if they miss the day's last FedEx pickup.
That's the picturesque side of a move Pritchett's Bible-software and electronic-publishing
company made six years ago from the Seattle suburbs. Then a startup virtually
in the shadow of Microsoft, it fled to where the action wasn't -- 45-mile
long Whidbey Island in the San Juans, an hour and a half away by boat.
Why would a business go where it couldn't be at the beck and call of its
clients in an era of pressure for constant service? Lower costs, says Pritchett,
and a wholesome environment -- complete with whales, sea lions, and eagles
-- that appeals to the staff and Logos' Christian clientele.
Despite the natural obstacles, the company -- which operates out of
a former feed-and-seed store barn in Oak Harbor, a town of 20,000 that
holds about a third of Whidbey's population -- has managed to grow to $4.7
million in revenues and 55 employees from $1.25 million in revenues and
under 10 people in 1993. How? By leaning on the tools of the just-in-time
economy -- electronic communications and overnight delivery.
The move may even prove, well, providential for Logos, whose motto is
"Advanced Technology for Eternal Truth." The island had attracted a highly
skilled Microsoft programmer, now a staffer, who had dreams of starting a
goat farm. With his input, Logos will launch new electronic-publishing
software for secular, technical publications late this year that the company
hopes will give it entree into much larger markets.
Logos' isolation may make it a surprising choice in the high-tech world
where businesses, clients, and investors tend to cluster in such hot spots
as Silicon Valley. Yet such entrepreneurs are popping up as far afield
as rural Minnesota and inland Florida. The most recent U.S. Census data
show a net migration of 1.8% into rural areas from cities from 1990 to
1996, reversing the trend of the 1980s, when the countryside lost population.
Demographers cite electronic communications as an important factor.
Pritchett and Kiernon Reiniger, two moonlighting Microsoft programmers
based in the fashionable Seattle suburb of Kirkland, and Pritchett's father,
Dale, a Cherry Hill (N.J.) computer executive, started Logos in 1992. Their
product: software that allows users -- mostly pastors and Bible students
-- to search the Bible for words or topics, compare and annotate passages,
and look up their Greek and Hebrew translations. Pritchett's family was
most of Logos staff. Dale was senior vice-president for sales and marketing.
Bob's mother, Jenni, a librarian, ran shipping and production. His younger
brother, Dan, borrowed $25,000 to become its first major investor. He also
did the accounting.
Pritchett père discovered windswept Whidbey on a day trip to
the San Juan Islands, and fell in love with it. He persuaded his sons,
his wife, and Reiniger (who has since left the company, though he remains
an investor) to consolidate the New Jersey and Seattle operations there.
The idea had a certain economic logic. Logos needed to expand but couldn't
afford to in Kirkland. With so few people to move -- two staffers from
New Jersey and two from Kirkland declined to follow -- the logistics were
relatively easy. The island also had a rare feature for a such an isolated
location -- high-speed ADSL and T-1 lines, installed to serve a Naval Air
The move has panned out for the Logos team, economically and personally.
Rent is a third of what it would be in Seattle, and hourly wages are lower.
Bob Pritchett has managed to stay in the high-tech loop by attending weekly
CEO and young entrepreneur forums in Seattle. As for island living: "There's
no trouble with traffic or parking. And I don't have to lock my car doors,"
he says. Workers often go home for lunch, and Friday-night family barbecues
are a weekly company event.
Because Logos is a big fish in a small pond, the island's congressman
often pops by. And clients -- even New York publishers -- take advantage
of the opportunity to mix business travel and pleasure by visiting Logos,
staying on as houseguests at Dale's and Jenni's.
But the remote location has also exacted a considerable price. There
are such constant irritations as slow deliveries -- FedEx and Airborne
Express don't guarantee early-morning dropoff, and companies that deliver
supplies and products seldom stop there more than once a week. Then there
are the power problems. Storms and high winds knock the electricity out about
25 times a year. The outages -- which can last a few minutes or a day --
shut down the phones, send all incoming messages into voice mail, and paralyze
the customer-service representatives who work with the Christian bookstores
that are Logos' primary retail outlets. The outages also shut down the
servers that run Logos' search engine, "What the Bible says about..." --
which thousands of Web sites use. With the even more frequent brownouts,
workers lose data on their computer screens up to several times a day.
Bob Pritchett is philosophical about the inconvenience: "We see it as part
of island living. It gives us a good chance to pick up the office."
Labor is a bigger concern, as the company grows. With Oak
Harbor's rural setting and large unskilled labor pool, Logos can get hourly
employees for little more than minimum wage. But few recruits have used
a computer, a necessity in every Logos job. Telemarketing trainees are
raw recruits to sales. "The first time a customer calls them a bad name
and hangs up on them, it's all over. And 99% of our customer base is pretty
gentle because they're pastors and Bible students," says Dan Pritchett.
The best employees tend to be transients -- Navy wives who leave when their
husbands ship out. Bob has had three secretaries in six years.
It has also been tough to attract twentysomething programmers. "There's
nothing to do at night," says Dan, now 26. Worse, with the naval base nearby,
single male programmers have to compete for local women with Top Gun types.
And when a guy does find a wife, she like as not prefers city life. To
find good programmers, Logos aggressively recruits college interns and
advertises on the Internet.
Still the bucolic location has washed up some talent that Logos could
not have attracted otherwise: John Pickett, a Microsoft programmer who
owned land on Whidbey and had wanted to move there to raise goats. A devout
Christian, he found Logos while surfing the Net a year and a half ago and
asked for a job.
His skills have been instrumental in Logos' move into secular markets.
Using its Bible software as a base, Logos had built a format for storing
books of any language on CD-Rom. One feature allows readers to call up and compare several texts on the same screen, a boon
to scholars and clergy. Known as the Logos Library System, it currently
offers more than 1,000 religious books. The Pritchetts had been working
to expand their system to let users search hundreds of thousands of nonreligious
books -- notably on such technical subjects as law, medicine, and technology
-- and download the texts for a fee. The technology will also include a
system for granting permission for republication or other use and will
enable publishers to sell the contents of their books electronically without
having to set up their own systems.
When Pickett joined the staff, he threw himself into the project, organizing
the programming effort to make it more cohesive. "We think it's going to
take the world by storm," says Dan Pritchett.
If it does, Logos will confront a new problem: It now has a secular
arm, Libronix Corp., that may quickly outgrow the insular island community
and religious-company culture. Already, Libronix is among the five companies
that NuvoMedia Inc. has selected to provide content for its Rocket E-book.
Can Libronix really take off on an island with unreliable power and
transportation subject to the vagaries of weather? It's a question the
entrepreneurs ask themselves. "Moving isn't out of the question," acknowledges
Bob Pritchett. "We want to see the business grow and succeed, and we'll
do what's necessary to see that happen." Would Logos move, too? "It's too
early to tell," he says. "I really enjoy living here. If we had to do it
over, I think this is still where we'd go." The question remains: How long
can the island paradise contain a growing company once it really spreads
By Meg Lundstrom in New York
Next in this three-part series: A Factory That's Like Family Moves South with Its Workers