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By Alexander Soule
When James Lippie recently became chief executive of Thrive Networks Inc., he inherited a firm that was an old hand at exploiting the tightly knit relationships between firms linked by a common thread - their venture capitalists.
The 50-person Concord firm runs small companies' computer systems under an outsourced model. Under its founding CEO, Nate Wolfson, Thrive grew in part by glomming onto customers that were flush with millions in venture capital cash and under pressure from investors to build their companies quickly.
Lippie is among a coterie of services firms that are placing renewed emphasis on a variation of "keiretsu," a Japanese business model adapted by West Coast venture giant Kleiner, Perkins, Caufield & Byers to foster interlocking relationships among portfolio firms to expand their business reach.
Highland Capital Partners knows the practice as well as any. The Lexington venture investment firm gets a call every week or two from service providers seeking inroads to its portfolio, said Michael Gaiss, head of marketing, though fewer than during the aftermath of the Internet bubble collapse, when many services firms found themselves in desperate straits. Such service providers included public-relations agencies, ad shops, contract software firms, Web developers and property brokers.
A few services firms have won repeat business based on Highland recommendations, Gaiss said, including two real estate brokerages.
"A good recent example is T3 Advisors, which had handled business for three of our companies. They had three strong references, and I sent out an e-mail blast to the rest of our CEOs and made everyone immediately aware of them," Gaiss said.
Some firms have done even better. A Rhode Island Web design firm called Newfangled Web Factory has worked for seven Highland firms.
And during the heyday of the telecommunications boom, Wisconsin electronics manufacturer Plexus Corp. found itself with so much referral business that it acquired a factory in Ayer to be near the Massachusetts gusher. The firm catered to telecommunications switch and router startups that required an outsourced manufacturer to make rapid-fire changes to a product line and won a following among companies financed by Waltham's Matrix Partners. They included Chelmsford optical switch maker Sycamore Networks Inc. (Nasdaq: SCMR).
Such venture capital contacts are not a lock for new business, however, said Jeffrey Glass, whose Watertown company, m-Qube Inc., designs and runs promotions delivered over cell-phone networks.
Glass noted that startup CEOs often have run other companies, and often rely on service-provider relationships formed at those predecessor firms. Glass said he has not acted on input from General Catalyst Partners, a Cambridge investor in m-Qube, with regard to choosing a service provider. But he does not dismiss the prospect.
"If someone on my board has a suggestion on a vendor that is going to save me the hassle of finding one myself - yeah, I am going to act on it," Glass said.
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