Navidec makes cents of clients' Web needs Burt's L.G. Chavez helps steer
startup
(Denver Business Journal; 01/23/98)
Ralph Armijo, president and CEO of Navidec Inc., has boiled down his
philosophy on electronic commerce.
"There is one basic principal to the Internet - it's simply an additional
channel of distribution."
For the Englewood-based Navidec, Internet services are its key channel to
expanding vertical markets.
Navidec, which went public in February 1997, offers integrated products and
services from Web page design to custom intranets. The company will even sell
you the hardware to run it all and color printers for those times when a
computer monitor just won't do.
"Customers come to us when they want it all in one place," said Armijo.
"It's easier, and more efficient, for the customer to look through our
blueprint to pick and choose the services they want from us."
Locally, the 52-employee company may be best known for its high-profile Web
site clientele, including professional sports teams the Colorado Avalanche and
the Colorado Rockies. But Navidec uses Web site development as a starting point
for client services, as best shown through its work in the automobile industry.
In 1994, Burt Automotive Network, one of Navidec's first Web site clients,
was interested in putting an electronic-parts catalog online. From there, the
dealership continually expanded the Web site and the relationship expanded into
a seat on the Navidec board of directors for Burt Vice President L.G. Chavez.
"It was kind of a natural spinoff because we saw the potential of doing a
variety of things with Navidec," Chavez said of his seat on the board. "My
position evolved because we had a lot of ideas for computer development at our
company, and one of Navidec's highest- priority markets is the automobile
industry. We've become a guinea pig."
After the Web site was started, Burt found its sales team wanted computer
access to the inventory, and Navidec set the office up with its own network.
When Burt was interested in growing its presence north of Denver, Navidec
developed an Internet kiosk system placed in an Arvada credit union branch.
"The kiosk opportunity is a growing part of our business,"said Armijo. "It's
a way for our clients to expand their market reach without brick and mortar, as
well as get Internet attention from people who aren't in the typical Internet
environment."
Navidec's latest product for the automotive industry is the Colorado Wheels
Web site. Partnering with media sponsor The Denver Post, Navidec developed a
Web site where users search multiple dealers' inventory for a specific car. To
date, Colorado Wheels lists information from more than 35 franchises with 13
Denver-area dealers. Next, the company plans to take the concept to the
county's top 100 markets.
"We saw this as a natural extension of our core product," said Kim Logan,
media sales and promotions manager at The Denver Post. "Our advertisers are
happy because they are getting lots of leads. From a reader perspective, Wheels
extends the wealth of detail of information of what's available. In turn, the
product strengthens our classified advertising product."
Navidec charges dealers an up-front fee for inclusion, and earns a per-lead
commission from the Colorado Wheels site. Chavez said Burt receives close to
100 leads a month from the Internet and projects 300 to 500 monthly leads in
the near future.
Despite high-profile clients and a multitude of services offered, Navidec
has yet to post a profit. For the nine months ended Sept. 30, 1997, the
company
posted a $1.3 million loss compared to a $714,000 loss for the same
period of
the previous year.
"What we found was our growth hit the wall because of the amount of
capital
available," Armijo said of the decision to take the company public.
"To grow on
a national level, you need serious cash."
Navidec raised close to $4 million in its initial public offering,
with most
of the proceeds going to capital expenditures, Armijo said. The
stock is
trading below its February 1997 offering price of $5.90, channeling
in the
$4.50 to $5.50 range. During the last year it has registered a
$3.25 low and a
high point of $7.50.
Navidec projects 1998 will be a profitable year as system
integration comes
to the forefront of the business.
"In 1997, the initial challenge was expanding our
infrastructure
platform," Armijo said. "The next challenge is focusing
our efforts to
implementation."
A recent partnership with Netscape will help that
focus, Armijo added.
Navidec is one of 20 "solutions integrators" allowed
to sell Netscape's
customized client/server systems.
"We are there for the company that wants to be
tied to the Web site and have
the Web site tied back into the whole business,"
he said. "What we keep in mind
is how a company markets itself is ultimately how
it will do business on the
Internet."
At-a-glance Name: Navidec Inc. Headquarters:
Inverness CEO: Ralph Armijo
Background: The company, which went public in
February 1997, provides
information technology services including Web-page
design, interactive kiosks
and custom intranets. Financials: For the nine
months ended Sept. 30, 1997, the
company posted a $1.3 million loss on $4.8 million
in net sales. For the same
period of 1996 the company reported a $714,000
loss on net sales of $4.2
million. Stock: Traded on the Nasdaq Small Cap
Market under the symbol NVDC.
Jan. 16 closing price of $4.94; 52-week high of
$7.50; low of $3.25.
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