Most people are lucky if they’ve founded one startup business. Ken Leonard has done it 17 times. While not every one of those ventures has been a financial success, the majority of them have, he said.
“The secret is having a good company,” Leonard said. That and a lot of long hours and hard work.
This self-described “serial entrepreneur” is at it again with his latest business, Attracta. The tech company is Leonard’s third Napa-based startup. And from the looks of things, it may become his next success story.
Over the past 30 years, Leonard, 65, has been a driving force in a number of startups, primarily in the high-tech arena of Silicon Valley.
In 1996, Leonard started his first Napa tech company as an experiment from a bedroom in his Hillsborough home. The Napa connection was a bit of a fluke, he said. He had teamed up with Mick Doherty, who lived in Napa at the time, to create one of the first domain name registration and Web hosting companies, TABnet.
“Back then, not many people knew what a domain name was,” Leonard said. Offering the relatively newer services of naming and hosting websites, the business quickly took off.
Opening in a small office in a business complex in north Napa, TABnet rapidly grew to more than 150 employees, Leonard said. In 1998, it was acquired by Verio for $49.5 million. The new ownership later moved operations to Concord.
Leonard’s next startup idea also took root in Napa. After Internet security became an issue, he decided to build a system that would help websites protect themselves from hackers. The business, called ScanAlert, certified websites as “hacker safe.”
Starting in a small office in downtown Napa, the business also grew rapidly to more than 150 employees, he said. Once again, larger entities came calling. In 2008, software security business McAfee acquired ScanAlert for $51 million. McAfee then moved operations to Texas.
Of course, Leonard wasn’t done there. In 2009, “we had another idea,” he said.
Small businesses need their websites to be found easily by Google and other search engines, “so we designed technology to do that for them,” he said. Providing what is called search engine optimization, or SEO, the new business was named Attracta.
Launching Attracta followed a familiar pattern. The entrepreneurs rented a former office of ScanAlert in downtown Napa, Leonard said. “The landlord was happy to see us,” he said with a slight laugh. And once again, “we find ourselves with a company growing fast.” Today, approximately 3 million websites use Attracta technology.
The venture, now with 27 employees, is currently located in another former ScanAlert office space at the newly renamed Napa Valley Commons, formerly Napa Valley Corporate Park.
“It’s very familiar territory,” Leonard said. “Even some of the desks and chairs are still here from years before.”
Being located in Napa has been a key element of the success of his latest ventures, the entrepreneur said.
“Part of what helped build that company so rapidly was the ability to hire people in the Napa area and grow the company with less expense than in Silicon Valley,” Leonard said.
Commercial rents are two to three times more expensive in Silicon Valley than in Napa, he said. Salaries are also higher. But he’s had no trouble recruiting talent for jobs in Napa, Leonard noted.
“Napa is a good location for growing businesses in a lot of ways,” Leonard said. It’s easy to get clients to visit you in Napa, he said. “People have heard of Napa when you mention it. It’s a good central location in the North Bay.”
“It’s really expensive to recruit and hire people in the South Bay, especially in the tech field,” Leonard added. About 25 percent of Attracta employees are Napa County residents, he said. The balance come from the surrounding areas, including San Francisco, Marin and Solano counties, he said.
Napa isn’t the first location people think of when it comes to tech startups, Leonard admitted. Attracta has stationed some technology in a data center near San Jose.
“We have the best of both worlds — we have our computers in Silicon Valley and offices in Napa Valley,” he said.
Leonard expects that Attracta may grow to as many as 150 employees. Those jobs include entry and management positions in sales, customer support and tech support, as well as tech jobs in website and network administration. Education requirements range from junior college on up, he said. He even has a few openings for recent high school grads in customer service and support.
Salaries range from approximately $25,000 to $75,000 a year, Leonard said.
Creating new companies “is a lot of fun,” he said. And slightly addicting. “You can’t stop once you get started.”
There’s no secret to his success, he said. “Unfortunately, it all just boils down to hard work and a passion for doing it. You have to be an idea person but also have to pull up your sleeves and put in a lot of hard work.
“I’m also a workaholic,” admitted Leonard, who lives part-time in Napa and part-time in Hillsborough. His family has “come to accept my addiction,” which can mean he works 16 hours a day, six to seven days a week, he said.
Not all Leonard’s ventures have been home runs. He described an idea to help Chinese businesses reach American businesses called MeetChina.com. Timing was not ideal.
“The Internet bubble burst and we shut down the operation” in 2002, he said. “It was interesting technology but a little ahead of its time.
“You learn your lessons, you take your bruises and go on,” Leonard added.
Whether a venture is successful or not, “the entire experience” — the mix of ideas, innovation and people — “is always rewarding,” he said.
Financially, Leonard said he could have retired long ago, but “it really never occurs to me all that much,” he said. “I ‘retire’ after every project is sold,” but retirement is “the one thing I always fail at.”
What’s next for Attracta? “We’re in the growth phase of the company now,” which is expected to last several years, Leonard said. “This company is turning the corner and has all the earmarks of becoming a success.”
Eventually, he predicts Attracta will be acquired. “I would say that’s probably the fate of the company,” he said.
When that happens, Leonard will remain with the new ownership “just long enough to pass along the baton,” he said. “I don’t do well” in those larger entities, he explained. “It’s no fun.”
The original employees of those companies also have the opportunity for success, he noted. “I always offer equity sharing with the employees” of startups, he said. “The employees own part of the company. When the company is sold they reap that benefit.
“One of our employees from the last company was able to put her husband through law school with the money she made from having her stock purchased. She was the receptionist,” he said.
“There have been quite a few people who have been able to pay off the mortgage of their house. There have been several millionaires minted in Napa. I find that really rewarding when that happens,” Leonard said.
“With hard work comes success and those rewards.”