Originally published at: https://blog.metageek.net/2018/12/catching-up-with-metageek/
This article was originally published by Sharon Fisher in the Idaho Business Review on Dec 12, 2018. Click here to read the article on idahobusinessreview.com
MetaGeek, shown here with founder Ryan Woodings in 2015, is hoping a change in the way it sells its products will bring it back to profitability in 2019.
MetaGeek, one of the more venerable members of Idaho’s startup community, is pivoting product delivery to help it get through a rough patch.
The Boise startup, founded in 2005, makes tools for managing WiFi networks. “We started out making hardware and expanded into making software sold through transactions,” said Brian Tuttle, who became CEO in June after being chief operating officer and chief technology officer. “We’ve evolving into subscription and offering software as a service (SAAS).”
The company is also creating hardware as accessories to its subscription offerings and focusing on software for mobile platforms as opposed to on the desktop, he added.
MetaGeek’s products are intended to make it easier to debug WiFi networks, Tuttle said. “It gives you the ability to see WiFi, because WiFi is invisible,” he said. “The great challenge for our users, who are network administrators, primarily, is that in the past you’ve been able to troubleshoot physically. You can plug a cable into a different port, look at the lights, and see if they’re blinking. What we do is try to create as much of that visual troubleshooting process as we possibly can for WiFi.”
For example, MetaGeek’s products let network administrators determine whether other devices in the office – whether it’s computers, smartphones, or smart thermostats or light bulbs – are interfering with the WiFi’s radio signals, Tuttle said.
But as the years have gone by, not just the technology, but also the way products are sold, has changed, Tuttle said. “2018’s been a tough year for MetaGeek,” he acknowledged. “We haven’t been growing our revenues for a few years.”
In fact, for only the second time in the history of the company, it hasn’t been profitable, he said.
The problem is MetaGeek offered free software updates to its customers, which meant it was running out of new customers. “As we’ve saturated the market for people who troubleshoot WiFi networks, we’ve been able to get less and less revenue,” Tuttle said.
Consequently, the company was hesitant to update its products. “We felt that continuing to give those things away was harmful to our business,” he said.
But the result is the product fell behind its competitors. “What that’s done is make us less relevant in the marketplace,” he said.
Now, MetaGeek has switched to a subscription model, which brings it a steady stream of income, and has started releasing updates to its software again, Tuttle said.
In addition, the company – which has been entirely self-funded for its lifetime – still has a significant amount of cash in the bank to fund recovery as it restructures its product portfolio, he said. “We still have enough capital to operate another year and a half at our cash burn rate, and it’s already turning around,” he said.
However, part of the reason Tuttle took over from founder and CEO Ryan Woodings, who now runs the product team, is his willingness to consider changing that self-funded approach. “Part of my job is to be willing to fundraise, and see this transition through if it’s necessary,” Tuttle said, though he thought it would be pretty unlikely.
In the meantime, MetaGeek is down to 16 employees, from a high of 32 in 2016, partly through attrition and partly through layoffs. The company laid off about 10 people in 2016, and lost four employees this year and another four or five last year, Tuttle said. Consequently, the company is considering moving its offices from the Owyhee Building, where it settled in 2015, he said.
That said, the one other time MetaGeek wasn’t profitable, it turned around quickly. “We had one period in our history where we didn’t make an annual profit, and after that, we enjoyed the best three-year period in our history,” Tuttle said. “I feel pretty good that once we make it through this, we have a good basis for returning to profit and growth for 2019. But it’s been a hard year.”