In June, Stephen Johnston took over as CEO of Jackson-based SmartSynch, after his predecessor, Mark Rodgers, moved to Air2Lan.
Johnston, who earned banking and finance degrees from Ole Miss and then served as an investment banker for Wachovia Securities Inc., in Charlotte, N.C., joined SmartSynch in May 2000 to lead the company’s sales, marketing, client services and business development initiatives.
The Mississippi Business Journal chatted with the 33-year-old business leader about company changes, industry trends and how, in a cynical investment environment and a recovering economy, SmartSynch has managed to raise more than $35 million in venture capital.
Mississippi Business Journal: Many Mississippians might not know about SmartSynch. What is the best way to describe the company and the services you provide?
Stephen Johnston: SmartSynch is the leading provider of wireless, commercial and industrial smart metering technology in North America. Utilities utilize our technology to eliminate manual meter reading costs and improve customer service. Our smart meters also enable utilities to offer real-time pricing variations, which can reduce costs and conserve energy. Over 25 major utilities utilize our technology today, and we are regarded as one of the fastest-growing energy technology companies in North America.
MBJ: SmartSynch has raised $35 million in venture capital financing, and is perhaps the largest private venture company in Mississippi. Why are the firms willing to invest in this company?
SJ: SmartSynch is a great story, and we have excellent relationships with venture capitalists. With that being said, venture capitalists invest in management teams as much as they invest in technology. We have a solid team and our investors believe that our new business model is one that can result in exponential growth.
MBJ: You were among the key industry presenters at Canada Power, a conference and exhibition for the Canadian power industry. The conference comes on the heels of Ontario Energy Minister Dwight Duncan outlining a new energy policy to establish pricing plans based on time-of-use rates. Tell us about the role SmartSynch will play in providing smart metering technology in Canada.
SJ: Ontario is a huge market opportunity for us. Basically, the Energy Minister is mandating smart metering technology for every customer, which represents approximately 4.3 million meters. The rollout is to take place between now and 2010 with the primary emphasis being on automating all commercial and industrial accounts by 2007.
Today, our solution is the most cost-effective solution for the commercial and industrial market segment. We have established close relationships with all of our business partners in Canada and are working aggressively to capture this market opportunity. By deploying smart meters combined with time-of-use rates, Ontario hopes to reduce its peak electricity consumption by 5% in 2007 and 10% by 2010. As a result of this initiative, Ontario will become a world leader in utilizing smart meters for conservation purposes.
MBJ: Obviously, Canada offers growth potential. What are other prime areas for high growth for the company and why?
SJ: A few weeks ago, SmartSynch launched the first, under-the-glass, smart metering technology that operates on GSM/GPRS networks. This product creates immediate opportunities to expand into other countries as the solution is built upon a global communications standard. We are in active discussions with a number of companies to help facilitate this growth. In addition, we will continue to focus on expanding our footprint in the energy markets that we serve today with new technology solutions.
While our prime focus is on energy markets, we continually evaluate the applicability of our technology in other vertical markets. Basically, we have created a technology infrastructure that could be used to monitor or control any device over any communications network.
MBJ: Tell us the significance of SmartSynch’s partnership with Itron, and its potential.
SJ: Itron is a strong business partner. They are viewed as a global technology leader to the utility market. It is a complement to our employees that Itron would choose to sell our technology as their prime solution for commercial and industrial smart metering. We are working closely with Itron on several large business opportunities, including ones that would result in us expanding our product offerings.
In addition to Itron, we have created strong business relationships with Elster Inc., a leading supplier of electric meters, and with several wireless companies, including SkyTel, AT&T, Rogers (Canada), Arch Communications and PageNet Canada. Collectively, all of these business relationships will enable SmartSynch to continue its rapid growth.
MBJ: Mark Rodgers left in June and is now CEO of Air2Lan. He has expressed great confidence in your leadership abilities. What changes have been made since his departure?
SJ: The first thing we did was make sure that every employee in the company realized they were a valuable part of our organization and that without their individual and collective contributions, SmartSynch could not be successful. Secondly, we laid out a clear vision so that everyone knew where we were headed in the short and long-term.
Thirdly, we began putting people in the right positions so that their strengths could become SmartSynch’s strengths. This process continues to evolve, but by the end of the year, we will have created an organization that is ready for its next phase of growth. From a business model standpoint, we are also making significant changes that we will announce at a later date.
MBJ: But there must be challenges being CEO at only 33 years of age?
SJ: Absolutely, but I don’t think the challenges are age dependent. Every CEO faces challenges. The biggest challenge is to create a fun and productive work environment. My belief is that a company is only as good as its people. As CEO, my job is to make sure that our people are highly motivated and that they have the resources they need to be successful. In a high-growth venture environment, it can be difficult at times.
MBJ: Can you elaborate on future plans?
SJ: As the leader in a competitive marketplace, we have to constantly protect ourselves against the “second mover advantage.” However, I will say that SmartSynch has significant growth plans in the upcoming year. We are working closely with our existing customer base and with our business partners to create technologies that will have immediate market acceptance. These opportunities will result in new jobs for the State of Mississippi and will further strengthen our position as a leading energy technology company.
MBJ: Anything else you’d like to address?
SJ: Yes. I would like to take this opportunity to thank the employees at SmartSynch for their dedication and commitment to our company. Secondly, I would like to thank the leaders of our state for their continued support. We are excited to be a part of Gov. Haley Barbour’s Momentum Mississippi initiative and look forward to playing an active role in helping attract more venture capital to our state.
Contact MBJ contributing writer Lynne W. Jeter at firstname.lastname@example.org.