BUSINESS ON THE WEB

They do Digital Creations

By RUSTY DENNEN
The Free Lance-Star

IF PAUL EVERITT and his partners in Digital Creations play their cards right, in a few years someone else will own the company.

They’re hoping the Internet consulting and software firm will eventually be gobbled up by a bigger fish in the industry, such as Yahoo!

A lofty goal, perhaps. But not all that far-fetched, considering how Digital Creations has grown since its inception in 1995.

“Our main focus for the next six months is to dramatically improve the viability of the company—not to be wildly profitable,” Everitt said in a recent interview.

Digital Creations, in the Princess Anne Building in Fredericksburg, expects to triple its staff to about 18 employees over the next few months. It’s moving next month into larger quarters in the William Street Executive Building.

Digital Creations’ specialty is consulting and software solutions for business applications on the World Wide Web.

About 80 newspapers, including The Free Lance–Star, use the software it developed for putting classified ads online. Until it was spun off last year, Digital Creations was owned by InfiNet, the Norfolk-based Internet provider.

“We talk to a company about their core business application and work with them to bring it onto the Internet,” Everitt said.

The Navy and Bell Atlantic Mobile are also clients. The Navy is using Digital Creations’ software to manage aircraft parts. The Defense Logistics Agency in Richmond helps keep tabs on warehouse space with it.

“Bell Atlantic is doing interesting stuff with our software,” using it to operate a call center, Everitt said.

Digital Creations may be best known for its Principia Web application platform, which is being updated and renamed.

It was Principia that moved Digital Creations to the next level of growth by attracting the attention of a venture capital firm, Verticality Investment Group of New Jersey.

VIC agreed earlier this month to kick in $750,000 in financing. Hadar Pedhazur, the owner, said he became familiar with Digital Creations through an Internet news group.

“I was impressed with the technology,” he said. “And they took the time to explain things and to put them in motion.” Pedhazur has invested in three other Internet technology companies.

“They have a software foundation and people will recognize it’s very fresh,” he said. “It’s not another me-too product.”

Pedhazur liked it so much, he’s now part of the company, serving as chairman of the board of directors. He also persuaded Digital Creations to push the software in an innovative way, making the product and its source code available to anyone, free.

In the business it’s called open sourcing. Linux, a computer operating system, for example, is widely available to anyone on the Internet under the same setup.

“To open source it removes 100 percent of the risk of people trying it,” Pedhazur explained. Digital Creations would make up the difference on the consulting side, offering custom solutions to those using the software.

Everitt, 31, is chief executive officer. A graduate of the University of Florida with a degree in materials engineering, he was a Navy officer, and he set up the Navy’s first public Web server. Everitt handles planning, sales and marketing, and investor relations.

Rob Page, 31, is chief operating officer. Page graduated from the University of Florida with a degree in aerospace engineering and was an officer in the Marine Corps, specializing in data communications and the Internet. Page handles the day-to-day operations, consulting and product development, and manages government contracts.

Jim Fulton, 42, the chief technical officer, headed software support and development for the Water Resources Division of the U.S. Geological Survey. He has a degree in civil engineering from Case Institute of Technology, a master’s degree in system engineering from Case Western Reserve University and a master’s in software systems engineering from George Mason University.

Everitt and Page were roommates at the University of Florida, where they began working with computers in their engineering classes.

“My first idea that I might have some sort of career in computers came in college,” said Everitt, who created a computer course for his classmates.

After graduation in 1990, Everitt went into the Navy’s flight school. While he was in Pensacola, Fla., there was a setback and an opportunity.

He had an eye problem which ended his hopes of being a Navy pilot, and he met the operator of the Navy’s Internet program.

Everitt went on to work for him after he got out of the Navy in 1993. During that time, he was keeping in touch with Page.

He said with a laugh, “We were always threatening to go into business together.”

Everitt and Page, both married, moved to the Fredericksburg area and began doing computer consulting. Through a mutual friend, they got connected with InfiNet, which was looking to beef up its services to newspaper clients.

“We convinced InfiNet that we had some something to offer them,” Everitt said, and a joint venture was created in 1995.

By 1996, Digital Creations had 12 employees and had developed several versions of its classified software and a similar product for auto clients.

By early 1997, InfiNet had decided to get out of the software business and spun off the company.

It was tight, Everitt recalled. “We had the intellectual property, but no money coming in.” Digital Creations was on its own.

“We had to scramble to make payroll,” he said, and the staff shrunk to about five people.

Since the spin-off, the new software product and the company’s government Internet work have opened new lines of business, Everitt said.

And the company is hiring again.

“One thing I want to do is plug Fredericksburg” as a place to live and work, said Everitt, who lives a few blocks from his office and often rides his bike to work.

“I think it’s insane for all these software professionals hopping in the car or the train to purgatory to work for someone who doesn’t care they exist and get home at 7 or 8 at night,” he said.

Revenues for this year will be about $500,000. The company expects that to rise to about $1.5 million next year.

Digital Creations now has about half-a-dozen customers and expects its new software to bring in additional business.

Said Everitt, “I think the interest level is going to be enormous.”

(c) 1998 The Free Lance–Star, Fredericksburg, Va.