Elixiter’s Innovative Business Model Results in Fast Growth for Bozeman Firm

By Christina Henderson


“We look for people who are interested in working for a global company, but want to live [in Montana]. … I wanted to create opportunities in the state I never had.”

 

-Andrew Hull, Billings native, Founder and CEO, Elixiter


 

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Andrew Hull, Elixiter founder and CEO speaks on behalf of the Montana High Tech Business Alliance at the B2B Luncheon sponsored by the Bozeman Daily Chronicle, March 23, 2015. Photo by the Bozeman Daily Chronicle.

Rapid expansion has led Elixiter to relocate four times in Bozeman in the last four years. Founded by RightNow Technologies veteran Andrew Hull in 2011, the digital marketing agency has averaged 100 percent year-over-year growth since its inception.

When I first visited in summer of 2014, Elixiter squeezed 14 employees into an office on West Koch Street. They moved soon after to new offices downtown, next door to Bangtail Bike & Ski and the iconic spinning horse.

Elixiter doubled their team to 32 in 2015 and will likely grow to 50 employees by the end of 2016, according to Chris Leonard, vice president of business development and operations for Elixiter. So the company is moving again to a 7,500 square foot space in the historic Cannery District on Bozeman’s north side.

Wherever the location, Elixiter is a hidden hive of activity with minimal signage. According to Hull, 98 percent of Elixiter’s customers are outside Montana. Local visibility is not a key competitive advantage.

One of Fortune’s 100 Best Workplaces for Women

What is key to Elixiter’s success is recruiting and training outstanding employees in Bozeman, including a lot of talented women.

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Amy Colson (center), director of marketing for Elixiter, visits with Susan Gianforte (left) and Andrew Field, CEO of PFL.com, a the MHTBA members’ reception in Bozeman, July 23, 2015. Photo by Thomas Kurdy, Ndigena.

On Sept. 30, 2015, Fortune Magazine ranked Elixiter number 52 on its inaugural list of 100 Best Workplaces for Women. Rankings were determined by employee surveys and the representation of women within the organizations.

According to Amy Colson, director of marketing for Elixiter, 64 percent of Elixiter’s employees are women. Half of Elixiter’s executive management team and 78 percent of all management positions are held by women.

These numbers are especially notable in tech; an industry in which women typically make up around 30 percent of the workforce and hold just 23 percent of leadership roles.

Jobs at Elixiter are also high-paying. According to Hull, Elixiter pays well over the median wage for Montana, starting in the mid-thirties to forties for associate consultants, with compensation reaching six-figures for senior staff.

Hull resists the assumption that labor costs should be significantly lower in Montana.

“We can have high paying jobs here in Montana,” Hull said. “We are not trying to be a lowest cost provider. Elixiter is competing globally and we charge market rates. We pay our people at or above what they would get paid nationally. They are experts in their field and should be compensated accordingly.”

Defying Conventional Wisdom in a Fast-growing Niche

Elixiter is a professional services company specializing in the Marketo marketing automation platform. As a Marketo Premier Partner, Elixiter’s certified consultants help B2B marketing managers with campaign strategy and implementation. A wall of Elixiter’s conference room holds 50 framed logos of its customers, which range from high-tech startups to billion dollar, global multi-nationals, representing 10 different countries.

Marketo is a major player in a fast-growing niche in cloud-based software and one of the so-called “unicorn companies” valued at more than a billion dollars.

Many of Elixiter’s competitors locate in major tech hubs like Silicon Valley to tap an existing pool of digital marketing talent. Other tech consulting firms build a remote workforce of seasoned consultants located near clients.

But Hull was committed to creating jobs in Montana, where marketing specialists with 15+ years of experience are hard to find. To build a world-class technology consulting firm in Bozeman, Hull knew Elixiter would have to grow its own experts in Montana on par with those in San Francisco. To achieve this, Hull designed a business model that ran counter to common trends.

Specifically, Elixiter’s management has invested heavily up front in training, relied on bootstrapping to fund business growth and committed to keeping employees in the Bozeman office.

Investing in Talent

Elixiter often hires top business graduates from Montana universities who are interested in technology and marketing. Onboarding requires about 100 hours of formal training. Elixiter’s new consultants aren’t fully billable until the end of their first year with the company – a scenario unheard of at most consulting organizations. But Hull believes this depth of training sets his team up for success.

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Morgan Hausauer, director, client services at Elixiter, talks with colleagues at the MHTBA founding members’ reception in Bozeman, June 12, 2014. Photo by Thomas Kurdy, Ndigena.

Morgan Hausauer, director, client services at Elixiter, oversees the development program.

Hausauer was one of Hull’s first two hires, along with Wendy Renner, Elixiter’s vice president, services. In February 2015, at age 26, Hausauer was selected as one of the top 20 business people under 40 by the Bozeman Daily Chronicle – the youngest person to be recognized for the award.

Even with strong leaders, Hull says it “takes a village” to train the next group of consultants. Everyone who has worked at Elixiter one year or longer helps deliver training – including Hull.

The up-front investment pays dividends as Elixiter fuels growth with a pipeline of Marketo experts. Elixiter team members regularly get calls from headhunters in San Francisco and New York.

So far, Elixiter has managed to keep recruiters at bay by offering great salaries and full benefits including medical, dental, a 401K match and an annual incentive bonus if the company reaches revenue goals.

Employees are encouraged to take vacation time and enjoy unique perks like a five-week sabbatical after working five years at Elixiter. Hull will be the first team member to earn a sabbatical in 2016.

Embracing Bootstrapping

From the beginning, Hull organized his company’s finances so he could afford to compete for talent with RightNow/Oracle in Bozeman.

“I didn’t try to sell [early hires] on we’re going public and I’ll give you stock options in lieu of paying you,” Hull said. “My offer was to pay a competitive wage and include benefits. I built it in right from the get-go. We learned to run a profitable business.”

Hull has consistently reached revenue goals while starting small and bootstrapping his company.

“I started Elixiter with exactly $16,000 in seed money,” Hull said. “It’s a myth – people think it requires a huge amount of seed capital to start a company like this. I just started one step at a time – secured the first client, hired, and kept building and reinvesting operating cash back into the business.”

Creating High-paying Tech Jobs in Bozeman

In an era when the ranks of remote workers are on the rise at many companies, Hull attributes much of Elixiter’s success to a deliberate decision to cultivate an office-centric culture that doesn’t allow telecommuting. Hull believes this allows his team to forge a stronger internal bond, provide better customer service, and maintain a higher retention rate.

So Elixiter seeks out employees who are committed to being in Bozeman.

“We look for people who are interested in working for a global company, but want to live here,” Hull said. “People who grew up here or came here for school – as long as they can authentically understand why they want to be in Montana.”

Elixiter’s CEO has his own personal connection to Montana.

Hull grew up in Billings and left the state for college. At the time, Montana had limited opportunities in enterprise software, so Hull started his career in Seattle and Pittsburgh before returning to Bozeman to work for RightNow Technologies.

Part of Hull’s motivation in starting Elixiter was to allow more Montana natives and college grads to have a professional, high-tech career without leaving home. “I wanted to create opportunities in the state I never had,” Hull said.

Hull encourages other Montana entrepreneurs to consider ventures combining professional services and technology. Hull notes that almost 100 percent of the revenue from such firms comes back to the state and that geography is no longer a barrier to growth.

“Clients care whether you can do the job, not where you are located,” Hull said. “We’re a premium service provider that happens to be in Montana.”


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Top photo caption: Elixiter in Bozeman has averaged 100 percent year-over-year growth since its inception and relocated four times in four years to accommodate its rapidly growing workforce. Founded by RightNow veteran Andrew Hull in 2011, the marketing technology firm now employs 32 people and is on track to grow the team (pictured here in July 2015) to 50 by 2016. On Sept. 30, 2015, Fortune Magazine ranked Elixiter number 52 on its inaugural list of 100 Best Workplaces for Women. Half of Elixiter’s executive management team and 78 percent of all management positions are held by women. Photo courtesy of Elixiter.

Author: Christina Quick Henderson has served as executive director of the Montana High Tech Business Alliance since its launch in April, 2014. Henderson writes and speaks frequently on Montana business trends and high-growth companies for Montana Business Quarterly and other publications. She holds an English degree from the University of Iowa and an MBA from the University of Montana, Missoula.

Publisher: The Montana High Tech Business Alliance is a statewide membership organization made up of more than 245 high tech and manufacturing firms and affiliates. More information on the Alliance can be found at: www.MTHighTech.org.



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