Fast track

Snapshot: SDR Technologies Inc. Year Founded: 1991 Core Business: Helping government serve the public over the Internet Revenue in 1997: $900,000 Revenue in 1998: $1.7 million Revenue in 1999: $6 million to $7 million (projected) Employees in 1997: 5 Employees in1999: 40 Top Executives: Kelly Kimball, chief executive; G. Donald Smeltzer, president Goal: To be the recognized leader in providing systems that allow government to offer services over the Internet Driving Force: Pressure on government to serve the public online By CHRISTOPHER WOODARD Staff Reporter With books, CDs, groceries and almost anything else you can name just a mouse-click away, people have become accustomed to turning to e-commerce to avoid the usual hassles of shopping. So why do you still have to stand in line at the Department of Motor Vehicles to register a car? Why can’t you pay your property, business or sales taxes simply by going online? According to SDR Technologies Inc., there is no reason. And as government agencies begin turning to the Internet as a way to better serve the public, the Westlake Village-based company is positioning itself to take advantage of what it sees as a largely untapped, $100 billion market. “Any time you have to file a document with the government, it could be done over the Internet,” said Kelly Kimball, SDR’s founder and chief executive. “We have the opportunity to be the guys planting the flag at the top of the mountain.” SDR has designed and built Web sites that allow several states, as well as the Federal Election Commission, to keep track of spending on political campaigns. The company is now working with other government agencies on everything from online public records access to vehicle registration. In the process, SDR has seen revenue grow from $900,000 in 1997 to a projected $6 million to $7 million this year. The company is in talks with venture capitalists for $5 million in funding, and officials hope to take the firm public in early 2000. Not bad for a company that sprang from Kimball’s own frustration with government red tape. Kimball was working at family-owned Kimball Petition Management, which gathers signatures for ballot initiatives, when he tired of the tedium of filling out financial disclosure statements for local, state and federal petition drives. “We’d file thousands of pages of campaign reports a year, and I figured there had to be a better way,” said Kimball, whose brother Fred still runs KPM and owns a 20 percent stake in SDR. Kelly Kimball hooked up with a software designer to create “Disk-Kloze,” a program that, although rudimentary at the time, allowed political campaigns to track their finances and produce financial disclosure reports. The fledgling company provided the product free to San Francisco in 1994 as part of its testing of the software. Disk-Kloze was an instant hit with the public and the press, which could use it to quickly track political contributions. But the idea of electronic campaign disclosure didn’t take off until the Internet explosion. “The Internet has blown away any of our expectations that the market would come at a reasonable pace,” Kimball said. In 1996, SDR landed a contract with the state of Hawaii to develop a Web-based campaign disclosure system. SDR built the site and still maintains the campaign finance information on its servers in Westlake Village. The popular site allows people to search voluminous campaign disclosure reports in a fraction of the time it takes to review printed material, said Robert Watada, executive director of Hawaii’s Campaign Spending Commission the state agency that monitors campaign finances. “We’ve had a very positive response,” Watada said. “Before, this information sat in our filing cabinets gathering dust. Now the public can take the information off the Internet and download it.” The company has since landed similar contracts to provide campaign disclosure systems in Washington state, Michigan, Missouri, Oklahoma, Illinois and Louisiana, and scored a big victory when it picked up the Federal Election Commission as a client. When SDR first set up a Web site for the FEC in 1996, the cost was $165,000, an intentionally low price intended to let the company get its foot in the door. A new contract to update that system commanded $1.8 million. SDR also is building similar systems for British Columbia and California, which is requiring all candidates and political action committees to file electronic disclosures by the 2000 primary. As a subcontractor on the California project, SDR is receiving $500,000. To get started, Kimball said SDR essentially had to give away services at a substantial loss. (He estimates he and his family have pumped $2.3 million of their own money into the company.) But by landing contracts from the FEC and several key states, SDR has established itself as a premier provider of what Kimball likes to call “e-government.” G. Donald Smeltzer, SDR’s new president, said the next step is expanding the client base as part of the push to bring the business of government to the Internet. Last year, SDR landed a contract to provide online vehicle registration to the state of Michigan. And the company is on the short list of firms vying to develop an Internet-based tax filing system for the state of Wisconsin. As people become accustomed to using the Web to do business, institutional government is coming under increased pressure to provide the same conveniences, Smeltzer said. Kimball said SDR is entering a major growth phase. The company is looking to venture capitalists, and later a public stock offering for the money it needs to expand through acquisitions. Kimball concedes that SDR faces some heavyweight competition from the likes of IBM Corp., which only recently entered the field by winning a contract in Connecticut. But since then, IBM lost a contract to SDR in Louisiana and didn’t bid on the California contract, according to Kimball. Kimball said his plan to become the dominant player in e-government may seem overly ambitious. But then again, he believes you don’t get anywhere unless you’re willing to take risks. “How many opportunities do you have in a lifetime to tilt the world just a little bit?” he asked.