The Growth of Applied

As with any new company, growth was the most essential goal for Applied to achieve. The growth of our staff, achieved by taking some financial risks that ultimately paid off, was the easy part. The challenge now was sustaining that staff with steady work and financing all of the software and equipment that was needed to do the job.

Applied had a couple of steady clients who were bright spots in those early days. Bobcat, for example, defined their projects clearly, valued quality work, and – essential to a new, very small business – paid on time. “In those first five or six years, cash flow was always tight. We faced sixty days or more of payables before seeing any revenue, which made every payroll and every supplier bill a challenge,” said Hinkel of Applied’s early financial challenges. Keeping the business going relied on contributions from Dwight’s personal finances, some close relatives, and one of Applied’s earliest employees, Les Roehl. But these personal investments weren’t sustainable, and the industry was shifting away from manual drafting and toward CAD modeling, meaning Applied needed to equip its employees with new computers that cost around $50,000 each.

Diversifying Applied

The team needed to find a way to offset these costs and bring in more revenue. This is when Applied contacted Computervision, an early pioneer in CAD technology. They were enthusiastic to hear from a relatively established engineering firm out of the Dakotas, as they were transitioning to a reseller model. This opened the door for Applied to become a Computervision reseller. Their software required a Sun Microsystems workstation, so Applied became a reseller of their products as well. This allowed the team to get the tools they needed at a great discount, as well as having new streams of revenue flowing in.

This arrangement created growth for Applied in a few ways. “These hardware and software sales not only generated healthy profits but also gave us natural entry points to offer our engineering services,” Hinkel explained. With the combination of software and engineering, we were able to put an engineer onto a project for much cheaper than our customers could. This momentum started a snowball effect that led to opening offices in Bismarck, ND and in a suburb of Minneapolis, MN in order to better support our clients in those areas.

Growing Together

When asking early Applied team members what it was that pushed Applied through these challenging early days, each of their responses can be summed up in two words: people first. This mentality was present in every aspect of the way Applied operated. 

Everything was a true team effort. Dwight Hinkle was out on the road making sales, Dean Benz was hauling his computer from Fargo to Bismarck in his little Mustang every week (let’s all take a minute to remember the size of computers in the 80s and 90s), and the team often happily stayed late on a Friday to help finalize a sale. It was all hands on deck to make sure Applied kept running. There was a lot of trust in each other. Everyone knew what they were supposed to do, and everyone made sure it got done. 

Hinkel recognized the sacrifices his team made, so he structured his business to take care of them. Uncommon for a startup at the time, all of Applied’s full time employees received health insurance for themselves and their families. Not only that, but he allowed for a flexible schedule to accommodate families’ busy schedules. As long as the work was getting done, people could structure their weeks however they needed.

This was a team that was growing up together. They were a tight knit group, watching each other get married and start families. Former CFO, Chris Billing, said of those days, “It was a great place to work, but even better, it was a great place to get a bunch of friends and grow in life with people.” 

This team mentality has carried through all of Applied’s history, and has been cemented since becoming 100% employee-owned. In the next article, we will talk about the decision to become an ESOP, and how it affected Applied’s culture.