Outlook 2013: A mile here, a mile there adds up for Transfinder
SCHENECTADY While much of the business community was sweating the national recession, Tony Civitella was doing what he always does with his company: Calculating how to do things more efficiently.
The chief executive officer of the Transfinder, a Schenectady-based logistical software company, knew his business was somewhat insulated from the tumult that was wrecking havoc on other industries. After all, part of the advantage of Transfinder is that it ultimately helps local school districts save money with their transportation costs.
Civitella looked at the recession a different way. He started seeing the new reality of operating in a changed business environment — one that isn’t likely to ever return to the way it was before the economic collapse started in 2007.
“We saw an opportunity to really promote our products,” he recalled during an interview at Transfinder’s crowded offices on Erie Boulevard.
With the housing market collapse, less revenue was coming into school districts across the nation and many were struggling to find ways to protect critical teaching jobs from draconian cost cuts. Transfinder showed them how making common sense changes in bus routing each day could save them the money they needed to preserve some of these jobs.
Civitella even mapped out how his product and services could pay for itself in just 180 days. He showed how reducing a total of 12 miles from their entire map of bus routes could save enough money over the school year to pay for Transfinder.
“We don’t even cut services,” he said. “We just tell them to take a new path.”
And the results have been astounding. Not only did Transfinder weather the down economy, the business flourished.
While other companies were downsizing, Transfinder was adding and expanding. The company boasted 45 workers in 2008, which was up 32 from the previous year.
Today, Transfinder employs a total of 65 workers. The company has more than 1,500 clients across the United States and in Canada, gaining them at a pace of about 150 school districts per year.
In January, the company announced it secured a 20 percent growth in revenue last year. Transfinder revenues increased from $6.50 million in 2011 to $7.85 million in 2012, according to figures released by the company.
“We showed [school districts] that we could make some incremental changes that would save them money,” said Barbara Pilliod, Transfinder’s marketing team leader.
The company is also nearing completion on its new $6 million corporate headquarters on State Street. The company is expected to move into to a newly constructed 30,000 square foot building this spring, more than doubling the space its offices occupy above the First National Bank of Scotia on Erie Boulevard.
Transfinder’s precipitous growth during the recession has actually been slightly stunted by its lack of room. Even with offices in two areas of the city, Civitella said he’s staved off hiring new workers because he simply doesn’t have a place to put them until the company moves into its new digs.
“We have people working from home at this point,” he said of the cramped old building. “We just don’t have any space.”
The appeal of Transfinder’s software is that is gives a district far greater control over their transportation costs. A complex system of bus stops that was historically mapped out on paper is now mulled through a state-of-the-art program that takes multiple variables into consideration — ranging from the safety of bus stops to the total mileage traveled by a given bus fleet.
Civitella said the ultimate goal of the program is to ensure the safety of children by correctly situating stops. But another key goal is to realize efficiencies in the deployment of a fleet down to each individual bus.
“You want to use it and reuse it,” he said. “There are so many variables to consider.”
Now 25 years old, Transfinder’s ascent to becoming a multi-million dollar company was gradual at first. Civitella, a graduate of the city’s former Mont Pleasant School District, came to the company as an intern while he was finishing his degree at Siena College.
He was instrumental in securing Tranfinder’s first contract with the Schenectady City School District and decided to stay on after his graduation in 1991. Over the next decade, he amassed shares in the company until becoming its sole owner in 2000.
At the helm of the company, Civitella quickly learned that his success would be largely based on how well he could adapt to an ever-evolving market place. He also found ways to use those adaptations as selling points to his customers.
For instance, Civitella began employing live streaming conferences with clients over the Internet in 2001, after the terrorist attacks of Sept. 11. With the cost of travel on the rise, he found the online conferences to be an innovative way to curb company spending.
Competitors tried to portray it as impersonal. But Civitella pitched it to customers as evidence of his prowess with web-based applications.
“I told them ‘if we can’t pull this off, then you shouldn’t buy me,” he said.
Transfinder was also quick to jump on the steady rise in fuel costs over the past decade. After Hurricane Katrina battered the Gulf Coast fuel refineries and caused a spike in fuel shortly before the school year began in 2005, Transfinder was there offering its bus routing software as a sure-fire method to reduce fuel consumption.
“You can’t just sit here. You have to do something about it,” Civitella said. “You have to respond immediately,”
Transfinder also relies on tried and true business models. Civitella places a heavy emphasis on client relations, with most of his workers either dedicated to seeking new clients or bringing new products to existing ones.
Civitella credits his Transfinder marketing efforts for helping the company secure roughly 50 percent of the market in New York and a majority share in Texas. He said the company is also gaining ground in Ohio and Pennsylvania.
Transfinder was also recently awarded a $150,000 state grant to help create the NYBizLab, a business accelerator that will be geared toward technology startups and software companies The $750,000 accelerator project is intended for the First Niagara building on lower State Street, just a few blocks away from Transfinder’s new headquarters, which holds the future of the company.
“We would like to try to expand software companies in the area and at the same time attract more talent and also more investment,” Pilliod said
It’s part of the direction Civitella is taking with Transfinder, especially with its new three-story state-of-the-art headquarters. The idea is to create a location that entices fresh talent to the area.
The building is located next door to the Hampton Inn and diagonal from the recently renovated Center City building. Civitella has spared no expense in building the structure, which he intends to use as both a marketing and recruitment tool for his business.
The first floor will contain the company’s massive servers and have a board room peering out onto State Street. The second floor will contain Civitella’s executive offices and an expanded space for his marketing team.
The third floor is slated to have a reception area and outdoor balcony where Civitella plans to entertain clients and potential hires for his software team. Another space in the rear of the building will be kept empty, awaiting the time when Civitella envisions his company employing upward of 125 workers.
“I see this as a global opportunity,” he said of his company’s future.
To read all the stories from the 2013 Outlook special report, click here.