Delcie Bean Puts Paragus on the Fast Track
“I was always selling stuff to my classmates,” he said. “From second grade through grade school, I’d come to school with Creepy Crawlers, Ozark Lollipops … pretty much anything I could buy and resell.”
At age 13, a year before moving from his native New Hampshire to Amherst, he decided to put that knack for generating revenue to good use, when he started a nonprofit organization, Steps Toward Walls, and organized a fund-raiser at Mount Monadock that brought in more than $50,000 to build a shelter for battered women. For that effort, he recruited two boards: one of fellow students, and another of local business leaders.
“I was looking across the table at these older people, business executives, and they were looking back at me, waiting for the 13-year-old to lead the meeting,” Bean said. “That was such a great feeling — I didn’t want to give it up.”
For most of his life, Bean — honored by BusinessWest in 2008 as one its youngest-ever 40 Under Forty honorees — has been firmly in charge. And with a gradual shift from candy to computers, he began writing a unique business success story in the Pioneer Valley — one that is constantly growing and evolving.
It started at age 14 with a startup called Vertical Horizons. “That was just me doing residential computer-repair work,” he explained. “The joke everyone loves to tell was that I didn’t have my driver’s license, so people had to pick me up and bring me to their house to fix their computer.” They didn’t mind, he added, because “the going rate back then was $10 an hour or something, which was ridiculous.”
By the time he turned 16 and was able to drive, Bean had accumulated enough regular business to open a small office in Amherst where people could drop off their computers for repair and also purchase products. “I had that location in my sophomore year of high school, and it went very well. I was on one of those work-study programs where I’d get out of school an hour early and go to my office and work there until 9 or 10 at night. Then I’d go home, do my homework, go to sleep, and do it again the next day.”
When it came time to apply to colleges, Bean was accepted at a couple of his choices, but then decided, rather than spend, say, $50,000 a year getting his bachelor’s degree and then another $60,000 a year pursuing an MBA, “maybe it would be interesting to think of the next six years as my business education, from the perspective of running a company,” with all the risks and challenges that would bring.
Less than a decade after graduating high school and devoting all his time to the business — which he renamed Valley Computer Works in 2007 — Bean now oversees 27 employees and ranks among the country’s fastest-growing private companies. After another name change in 2011 to Paragus Strategic IT, he’s set to move into an 8,000-square-foot building just down the road, more than tripling the size of his current, and very cramped, quarters.
For this issue, Bean sat down with BusinessWest in his company’s break room — because there were no unused offices or conference tables available — to tell the remarkable story of a youthful ambition that has, through smart expansion, calculated risks, and staying ahead of industry innovations, grown into one of the Valley’s most significant names in information technology.
And, at just 26 years old, he’s far from done.
Oddly enough, the young Bean, even after launching his company, never saw computers as a long-term career, but as an opportunity to make a little money during his teen years before moving on to something else.
“Computers were just something I picked up along the way,” he told BusinessWest. “In third grade, I was lucky enough to have a computer in my classroom, and I’d play around on it.” As he got older, his interest grew. “When I started my company, I thought that fixing computers was something there seemed to be a need for. It was mostly about wanting to run a company; computers were just a means to get me there.”
By 2005, he had outgrown his small space in Amherst. So he partnered with a colleague who owned a Web company and was also looking for space, and together they bought a house on Route 9 in Hadley. Looking back, he says he would have kept looking had he realized how much renovation work — the structure was literally gutted to its framework — would go into creating an acceptable workplace.
“It was a labor of love, but it has served us very well,” Bean said, adding that he used only 500 square feet of space at first and rented out the rest. “As we continued to grow, we kept letting leases expire and letting tenants leave.” The final tenant, a student using the lowest of three floors as an apartment, left in 2010.
Bean long ago abandoned his spacious top-floor office and now works at one of several desks crowded into one room. All together — including the trailer out back that seats nine employees — Paragus is operating in 2,400 square feet of space, and the move to much larger quarters, scheduled to take place later this year, can’t come soon enough.
After getting very close to a deal for a Northampton property only to see it fall through, Bean is in the process of signing a lease on a new building just behind Hadley’s district courthouse. The dilapidated brick building now occupying the site will be torn down and replaced by a new, 8,000-square-foot building, with room on the blueprint for an additional 5,000 square feet later on if needed.
“It’s a huge expansion for us,” Bean noted, as it more than triples the existing space while including amenities such as a gym with locker rooms and a pub — the latter being a significant expansion of the dual beer taps Paragus currently has installed in its break room.
“These are things we’ve always wanted but couldn’t afford or didn’t fit in the building,” he said. “It’s a much more staff-centric building. It’s the Silicon Valley campus model; we’re going in that direction.”
What’s in a Name?
A shift in direction, in fact, is what led to the company’s name change two years ago.
“We felt the name [Valley Computer Works] was kind of boring,” Bean said. “We were also working outside the Valley, reaching well beyond our footprint here, so we felt the name was very limiting.”
And what does Paragus mean? Well, nothing, and that vagueness is intentional. Yet, “it’s derived from the fact that we are based in Hadley, which is known for its asparagus. Plus, it’s one of the fastest-growing vegetables, and it’s hardy. I liked the connotations. I didn’t necessarily like the name Asparagus, but felt that Paragus was a good derivative of it.”
The company’s new logo, a small man lifting huge weights, represents “the idea of doing the impossible — doing what no one else thought could be done, and also setting the bar higher and taking it to a different level.”
That new level includes the company’s recognition by Inc. magazine as the 1,349th-fastest-growing private company in the U.S., with income last year of $2.9 million. “Much more important, we’re the second-fastest-growing IT company in all of New England, and that includes Boston and Hartford companies,” Bean said.
And that growth has continued in the wake of one of Bean’s toughest decisions — to ditch the firm’s residential-service component, which was not only the origin of the company, but a niche worth about $250,000 every year.
“The thought process was, if we’re doing something right, let’s give it all our focus. So the only thing we do now is outsourced IT, and we do it very, very well,” he said, noting that Paragus has also begun limiting itself to clients with whom it has a long-term contract.
The decision to abandon residential work turned out to be a good one, as the company has grown significantly since then — by 50% to 65% a year, in fact. But at the time, “it was really hard to turn away a quarter-million in revenue. It wasn’t the most profitable part of our business, but it was still very risky.”
With outsourced IT for businesses becoming an increasingly dominant part of what Paragus was doing, however, “we knew we’d have to go that way eventually. And we thought, if we’re changing the name, it’s a good time to do it.”
In an increasingly complex world for workplace technology, he said, more and more businesses are latching onto the concept of outsourced IT. “The old approach was to have an employee who was good at IT tinker with it and manage it. But that just doesn’t cut it anymore.”
As for the dramatic growth of late, “we’re growing fast, but at a measured rate,” Bean said, noting that he doesn’t want to compromise the level of service that existing clients enjoy. And the staff at Paragus takes their views into consideration through a monthly customer survey.
“We view that feedback almost instantly, and it holds the utmost importance for us. That tells us whether we can keep growing. If any scores start to dip, we put the brakes on until we can figure out why, and we know what to work on. That gives us direction and focus, and leads to smart growth.”
Stop That Flight
Paragus’ clients range in size from a two-person operation to a 350-employee company, spanning a wide gamut of industries, although medical companies, legal and accounting firms, nonprofits, and manufacturers comprise the bulk of them. With a customer-retention rate of 98%, every time the company picks up new clients, it means hiring new staff — lately, about one every six weeks, on average.
“By far, our biggest impediment to growth is not finding clients, but finding staff,” Bean said, noting that a full-time human resources director oversees those efforts. “We’re trying to find that very rare combination of talent combined with people skills — someone who’s professional, friendly, articulate, and really knows everything there is to know about technology.
“Finding that combination that you’re comfortable putting in front of clients is a tremendous challenge,” he continued, “and the higher the expertise, the harder it is to find. The only thing keeping us from growing faster is finding talent. We call it the ‘UMass flight.’ Something like 90% of computer-science graduates leave the area.”
As for potential customers, while there’s a finite number in Western Mass., the region is particularly strong in nonprofits — a valued niche for Paragus — compared to other areas of the country. Still, “we are definitely looking to grow geographically. The next logical move for us is a Hartford-Enfield location,” which would allow the company to better serve existing clients in Connecticut while also expanding its reach there.
A northern office might also make sense someday, Bean said, for clients around the Brattleboro area. But any expansion has to take into account the ability to staff Paragus with the right employees — meaning, again, those with both the talent and personality to fit into the culture Bean is trying to build.
“Culture is incredibly important to us,” and that includes work-life balance, he said, citing everything from staff events to an incentive program to gym memberships to that aforementioned beer on tap. “If people enjoy coming to work, the service they give to customers will be infinitely better. Retention is obviously a key factor; it’s so hard getting good people, and the worst thing is losing the ones we have. But it also creates a better company.”
Because of its desire to grow smartly, as not to overextend the staff, Paragus has the ability to pick out customers who have the same philosophical approach. “We view IT as an investment, rather than as an expense. And our clients tend to view IT as something that will aid their business, not as a necessary evil. By focusing on these clients, it allows us to be even more creative and inspired to be an even better company.”
Over the past couple of years, Paragus has taken a lead role in a perhaps unexpected niche — helping medical practices develop their electronic health records (EMR) systems, which are being mandated this decade by the federal government. Paragus has brought on many medical clients and has organized about a dozen conferences for medical practice owners and managers, locally and as far away as Maryland.
“That work has slowed down a little bit; there aren’t as many practices looking for EMR,” Bean explained. “A lot of them have already done it or have decided they’re not going to do it. But we typically get a call every other week from a practice looking for EMR.
“It’s a good fit for us,” he said of this emerging niche, in that it involves helping businesses — in this case, medical practices — navigate some often-confusing products and technology to arrive at workable solutions. “It has slowed, but it has certainly not stopped. It will continue for years to come as new businesses start up and those who have been avoiding it realize that’s a losing battle.”
Paragus continues to identify other opportunities to increase its market presence as well, such as partnering with the Hampshire Council of Governments to regionalize IT on the municipal level. “A lot of these little towns in Western Mass. don’t have a lot of money, but they all have the same needs,” Bean explained, adding that it makes sense for those towns to buy services through the council, provided by Paragus, at a much-reduced cost than going it alone.
“It’s something that has a lot of potential,” he continued, noting that the concept also works for nonprofits, such as Girl Scouts sharing IT costs across franchises. “It’s using technology as a way to reduce costs, not increase them.”
Paragus is extending that philosophy of connection to its community and charitable work. Part of that is partnering with organizations on IT solutions, including its involvement in Valley Technology Outreach (which Bean created), Link to Libraries, and a program at Kelly School in Holyoke, where Paragus will provide labs, workshops, and other resources to help develop IT talent from a young age in the Valley — which, obviously, carries benefits for both young people and the region’s IT employers.
Bean also envisions bringing businesses together in something not unlike Warren Buffett’s Giving Pledge to support area nonprofits. “We want to build some shared values and generate some money. So many nonprofits are in need in the Valley.”
In the early years of Vertical Horizons, Bean could afford the rent on his office space only by working part-time at Staples and adding a construction job on the weekends.
“Back then, I could never imagine running this company today. I thought it would be a fun little project, and then I’d go out and get a real job,” he told BusinessWest. “I never thought this would be successful enough to support a family and a staff. In fact, now we support 27 people, and I have a family.”
What he doesn’t have, at least for the next several months, is anything resembling an office, but that’s OK, because his role has shifted somewhat. He’s got an effective team to reduce the day-to-day load of running the business, freeing him up to focus more on strategy and direction, not to mention mentoring and helping other entrepreneurs through his various community efforts.
“We’re just getting started,” said the man who has been making change — in more ways than one — since second grade. “I’m working on things I’m passionate about, and I still enjoy the work I do every day.”
Joseph Bednar can be reached at firstname.lastname@example.org