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Entrepreneur Files
Colabranet
UT Connection: President and CEO Alex Gabbi, BBA 93, MBA 97 and COO Jim Weinstein, MBA 97
Location: Austin
Alex Gabbi came to the MBA program with the intention of meeting someone. He was looking for that special person who would complement his personality, someone who had strengths where Gabbi had weaknesses—the perfect partner. A business partner, that is, not a marriage partner, but the courting process looked almost the same.
Before returning to UT to earn his MBA, Gabbi had made three false starts at establishing a company. “I’m a gut-feel type of person,” he said. “I don’t have a lick of analytical sense or attention to detail.” A characteristic ‘big-picture’ guy, Gabbi needed someone to keep him from making poor decisions and promises he couldn’t keep. And so there he was, on the first day of class, eyeing the four unsuspecting people in his study group.
Gabbi and Jim Weinstein were equally unimpressed with each other on that first day, but within a month, it became evident that the two worked well together. With a background in economics, technical savvy that would be honed in the school’s IM Program, and a knack for attending to detail, Weinstein was the match. Now all Gabbi had to do was persuade him to join his next venture.
“That was a hard sell,” Weinstein remembered. But by the following summer, Gabbi and Weinstein had started a consulting company, The TAO Group, providing customized software solutions to companies in the electronic components industry. After they graduated, Gabbi and Weinstein ran The TAO Group for four years before launching Colabranet in June 2000 and developing Partnerflow, a software solution that streamlines the complete sales channel in this unique industry.
“The electronic components industry is very complicated,” explained Gabbi. “The manufacturers are two steps removed from the ultimate consumer, so demand forecasting is difficult.” Over the last few years, with the Internet boom and subsequent bust, the disconnect between the end consumer—the computer user—and the manufacturers of the components within the computer meant that companies were either scrambling to keep up or entirely overstocked. “One of the functions of Partnerflow is that it gives visibility to the manufacturer so that production levels even out,” said Weinstein.
Is there a demand for this product? The first round of funding for the company came from former TAO Group clients who believe the application is exactly what the industry needs to solve its challenges. And Colabranet already has a waiting list of companies that want to purchase the full solution package, which is expected to be released by January 2002.
Their more immediate challenge, however was to secure a second round of funding in a markedly worse climate than when they launched. “It’s incredibly brutal out there,” Gabbi admitted. “Venture firms are nervous, they’re looking at fewer companies, they’re doing extensive due diligence, it just takes a lot longer than it used to.” Still, Colabranet raised $5.1 million in August and hoped to close the round at $6.75 million by the end of September, as this magazine went to print. In the not too distant future, they hope to be proven and profitable.
For more information, visit www.colabranet.com.
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