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.