When Jeffrey Killeen took over as chairmanchief executive of GlobalSpec in early 2002, the Troy, N.Y.-based company seemed to be making substantial progress.”It had the potential to become the standard for product discovery,component-sourcing and industrial parts classification,”Killeen says.
By end of year, the new CEO promised that GlobalSpec,founded in 1996 to provide a specialized search engine for engineers,scientists and purchasing agents, would have more than ahalf-million registered users of the company’s proprietary database,SpecSearch. GlobalSpec’s business model at that pointwas to build a database of parametrically searchable OEM anddistributor catalogs, make them available over the Web, andmake money by connecting customers to parts suppliers.
What Killeen didn’t mention was that after three yearsin commercial operation, GlobalSpec still wasn’t profitable;it was very small, with only $3 million in sales. That’s whyWarburg Pincus, a New York-based private equity firm, whichhad already agreed to invest $20 million in GlobalSpec, hadsought out Killeen to join as chairman and CEO. GlobalSpeccofounder John Schneiter would stay on as president andcofounder Thomas Brownell would serve as senior vice presidentof production and engineering, positions they still hold.
Over the next five years, Killeen would overhaul the company’sbusiness model, adding new revenue streams, partneringwith vendors that contributed to the company’s growth andbuilding GlobalSpec into a thriving midsize company that hasbecome the preeminent online research source for the engineeringcommunity. His success and that of GlobalSpec providevaluable lessons to companies seeking to leverage theircore strengths for growth and remain highly focused.
Killeen was new to the engineering sector, but had establishedan impressive track record in the Internet search arena.He had headed up barnesandnoble.com, taking it from astart-up in 1997 with 25 employees to a company with 1,000employees and $200 million in annual sales by 1999. That’s theyear it went public, raising more than $500 million. Beforetaking the GlobalSpec job he served as president of Forbes.com. “When I walked in, it was a fledgling Web site, albeit onewith very high potential,” he says. When Killeen departed, ithad a half-million registered users and was competing on equalfooting with CNN.com and other financial business sites.
Killeen and venture partner Warburg Pincus had similarambitions. GlobalSpec needed a vertical search engine withthe scale, robustness and ease of use to hold its own in a worlddominated by the giants, Google and Yahoo. But in 2002 the question was how to best accomplishthis. That, of course, wasthe new CEO’s challenge.