A family bent for invention carried this entrepreneur into an international business
by Roberta Nubile
Michael Howe turned a friend’s desire to help Russian colleagues into the basis of an enterprise that spans two hemispheres. His company, Bear Code LLC, a software firm with offices in Montpelier and Moscow, offers solutions to companies in need of Web applications for their services.
The stage was set at a young age for Michael Howe to continue his family’s tradition of entrepreneurship and problem-solving. Howe is founder and managing partner of Bear Code LLC, a software firm that offers solutions to companies in need of Web applications for their services.
Bear Code, with offices in Montpelier and Moscow, offers clients an onshore/offshore hybrid approach that pairs local project management teams from Vermont with highly qualified software programmers from Russia — the inspiration for the company name.
Howe’s grandfather Harold Howe was an inventor who built toasters, patented a snowshoe binding for Tubbs, and created Howe Folding Furniture in the 1920s, a Connecticut company that offered portable furniture for all kinds of applications — card and snack tables, bedside stands, folding cribs, hat racks, sewing tables — just about any furniture that could fold. The company was acquired by Falcon Products in 1998, but the Howe Furniture brand continues.
Although Howe did not take over the family business as his father had hoped, in his 20s he worked for the company in Poland, sourcing manufacturing sites in Hungary, Czechoslovakia, and Poland.
“I appreciated the perspective,” Howe says of his time abroad. “It gave me a wider breadth of experience and an understanding of how the U.S. is viewed, and I was exposed to the entrepreneurial spirit of Poland, which experienced early growth during the dissolution of the Iron Curtain in the late ’80s.”
After Poland, Howe lived on a kibbutz in Israel for six months. He describes this period as “eye opening,” as his inherent skills in problem-solving and leadership emerged. “But things that needed to get done got bogged down in committees, and I realized the socialist environment wasn’t for me.”
What Howe needed at this point, he says, was to “lay back” and explore his creative side in the Seattle music scene. On the West Coast he played guitar in various venues and learned how to build them; but this lifestyle proved to be a little too laid-back for Howe, who eventually realized how much he missed East Coast ways. “There’s something more alpha about the East Coast that appeals to me,” he reflects.
A Connecticut native, Howe had graduated from Bowdoin College in 1987 with degrees in philosophy and physics. At Bowdoin, he also met Terrianne Klein, whom he would marry in 2006.
Howe was familiar with Vermont from family — his brother and sister-in-law lived here — and summers working here while he was in college. So at age 30, he and Terrianne moved to Vermont to continue to explore his musical aspirations.
He worked as a producer for Re-Bop Records, a children’s record label, until a period of inactivity during time in traction with a broken neck brought him into the computer world full force. “Musically, I was resistant to the digital revolution,” he says. “I loved vinyl and joined the debate over which has the better sound — analog or digital. I finally succumbed.”
While at Re-Bop, Howe was approached by a friend who needed to solve a problem posed by Russian colleagues. The programmers needed help with the English translation of 3-D applications of underground, geothermal gas reservoirs to create a virtual model. Howe worked with them, and through this process discovered the unique skill set of the Russian programmers: “They could handle projects that build on large and complicated biothermatics,” he says, “with a mixture of programming and hard science and strong math skills that are not as prevalent over here.”
Intrigued by the possibility of more collaboration with the programmers, Howe remembers thinking, “We have something here we can build into something interesting.” Re-Bop’s owner had a medical emergency that put the company into temporary hibernation, and Howe was ready for a new venture.
Over six months in 2000, he worked with four friends from college doing market research, and explored various ideas to make Bear Code viable. Ultimately, the group dissolved. “We realized it was not going to work as a larger group — there were too many pieces and personality conflicts,” says Howe. “Matt London and I said, ‘Let’s move forward ourselves,’ and the rest is history.” London was Howe’s partner in Bear Code for the first two years before they amicably split.
Bear Code went operational in early 2001. It did not hit the ground running, but had more of a lumbering start. Howe moved to Maryland to be closer to the customer base at that time. “The timing wasn’t perfect,” Howe admits. “It was the dot-com crash.”
Since then, he says, there have been periods of slow and steady growth interspersed with the recent economic downturn.
Now back in Vermont, Howe continues to employ some of the original Russian programmers from the gas reservoir project, and has put together a U.S. team as well. “At one point we needed to refocus and increase our project management here to interface with clients,” he says. “We recognized how important that face-time was.” Also, with staff in both hemispheres, the company is up and running from 18 to 20 hours a day.
In the early years of Bear Code, the company focused on back-end programming, and produced a mixture of scientific software problem-solving and software solutions for any company in need of complex back-end processing. Now, he says, the focus has shifted away from biothermatics, and pays equal attention to the front and back ends of a Web application.
Until the middle of 2009, about 95 percent of Bear Code’s clients were out of state. That has shifted notably with Vermont clients such as Dealer.com, Seven Days, and Dympol, says Howe, making it closer to 40 percent in-state.
Jay Ziskrout, founder and CEO of Dympol, an online service based in Waitsfield that gives consumers discounts on music and other entertainment, appreciates Howe’s ability to relate to his company. “What I like about Mike is his entrepreneurial spirit and flexibility to work with a start-up. There are things that only an entrepreneur would understand. He’s had his hands in several ventures; you can’t teach someone that. For me that is number one.”
Ziskrout describes how Bear Code provided a unique Web application for his company.
“We weren’t interested in building an entire store of our own and dealing with all the licensing that would entail, so Bear Code built an innovative solution enabling Amazon to serve as our back end. I expect competence in managing projects, creativity in coming up with solutions — that’s baseline. What makes him stick out is his leadership. He knows exactly what I am going up against.”
For Seven Days, Bear Code helped create a fully searchable online version of its restaurant magazine, Seven Nights.
Howe’s leadership will bring Bear Code into its next stage of growth — but slowly. “We are not constantly looking for clients,” he says, “but want to find the next really good clients.”
Howe confesses to a soft spot for start-ups — companies with a long-term vision with integrity that have problems they want to focus on. He mentions Susan Dzieduszycka-Suinat, president and CEO of Overseas Vote Foundation (OVF).
“OVF provides free public voter services to help overseas citizens register to vote — every aspect of their overseas application voting process, “ says Dzieduszycka-Suinat. “At one point we needed to redevelop our system from scratch. We got grant money and found about seven organizations and asked for proposals. From the first moment I spoke to Mike it was right — he got it. Their proposal came in head and shoulders above others.
“We wanted a process wherein the voter could come to our website and, no matter what situation they were in, could get an exchange going. Bear Code has a good feel for Web applications and made a fair and reasonable offer. There were no red flags. We wanted to own the product; some developers want to own it and license it for you. They never did that from the outset. Bear Code is not only good at what it does; it has honest, fair pricing. That matters to a nonprofit.”
Dzieduszycka-Suinat says they were up and running in time for the 2008 presidential election and the process couldn’t have been smoother. Obama’s and McCain’s campaigns used the software pre-election, and since then eight states — Vermont included — have adopted it on their state government websites.
Bear Code’s biggest challenges have been typical of any business: managing cash flow at times of slow growth. “It was a balancing act,” says Howe. “How do you keep good people during slower times? I have learned to be transparent, by saying to employees, ‘I know your salary is not at market; let’s figure out different ways to compensate you and recognize your skills.’” With that in mind, Howe favors employee ownership, and project managers own equity shares. Bear Code employs 14 people, six of whom are in the United States.
True to the life of an entrepreneur, the question of what he does with his spare time is met with a pause. “I don’t do enough things outside of work,” he admits. “Any free time he has is spent with his family in Marshfield — Terrianne and their two children, Aga, 4, and Tasa, 2.
Howe doesn’t get to play music as much as he would like, or have much time at his favorite sports — basketball, skiing, and hockey. The spare time question is one he has yet to solve. Chances are, he will find a way. •