Paladin Digital keeps eye on high-tech targets, off investment climate

Business Report Correspondent

LOUISVILLE — The one thing you can say about Paladin Digital’s founder Geoff Goedde is he can keep his eye on a fast-moving target, regardless of the business climate.

“I really think this is going to get worse,´ said Goedde about the venture capital climate. “This is like 1988. It’s a question of survival until we get these funding problems fixed.”

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Paladin Digital basically is a contracted management company, according to Goedde. “We invent and grow businesses and then enable customer buyout within a specified contract period,” he said.

“Different management styles are required for envisioning a start-up than are needed when the company is up and running,” he said. “What we (Paladin Digital) want to create is a structured, predictable exit. In today’s investment climate, that’s a rare opportunity.”

Still, when faced by a similar venture capital drought in the late 1980s, Goedde started his first business, InfoNow, which proved to be before its time in encryption technology. At that time, InfoNow’s technology was largely used for tracking multiple licensees for products such as software distributed on CD-ROMs, but Goedde is quick to point out that encryption technology has gone a lot further since then. “I had to keep that business afloat for four years before we were able to go public,” he noted.

But Goedde is best known as the founder of Requisite Technology Inc., which helped lead Boulder County into the e-commerce game in the 1990s and still is going strong today as others fail. Goedde said Requisite has succeeded largely because the cataloging infrastructure is still the basis of a large segment of e-commerce, either on the Internet or in other exchanges.

Today, Goedde hasn’t forgone his entrepreneurial ways, but he has prioritized his projects to make the best of a bad situation. “I enjoy creating innovative business opportunities and employing people,” he said. “That’s what I do.”

Paladin’s No. 1 project is ExoLogic Corp., which specializes in business process outsourcing (BPO) for e-commerce, a process Goedde refers to as “e-settlement.”

The process eliminates several accounting and payment procedures that might normally accompany an online purchase — the purchase of a shirt from the Web site of a national retailer, for example. “It makes no sense for the shirt to be sent from the manufacturer (to the retailer) and then on to the customer, when it could be shipped directly from the manufacturer,” he pointed out. “ExoLogic enables the shirt manufacturer to be paid immediately upon notification that the shirt has been shipped.”

Even larger savings can be realized through the elimination of accounting overhead such as purchase orders reconciliation and invoice preparation. The system also provides automated holdback procedures for returned items, chargebacks, etc. “Our system is designed to split the payments (coming directly from the consumer) and split the payment as dictated by contract,” Goedde said. “Not only do we eliminate the internal processing costs for both parties, but both parties get paid immediately.

“Now I have an incentive for supplier adoption,” he said. Goedde expects that ExoLogic will do well, even in a climate of reduced expenditure on Web site design and marketing. “Web sites will be less marketing tools and more related to back-office business,” he predicted. “The whole demeanor of that situation has changed.”

While Paladin has temporarily shelved plans for a broadband co-op, it may not be surprising that these start-up gunslingers can make the most of a bad situation. That’s actually why the business was formed in the first place.

The company was named after the main character in a 1960s television series, “Have Gun Will Travel,” in which Paladin (played by actor Richard Boone) is brought in time after time to clean out the town’s bad guys. “But then, after he’s cleaned up the town and the town grocer can become the marshal again, they ask him to leave,” Goedde noted.

Goedde is no stranger to the ups and downs of the high-tech industry. He first started working with computers in the Air Force in the 1960s and graduated from engineering school only to find a tech downturn in the wake of massive layoffs at NASA related to the man-on-the-moon program in 1967.

In 1972, Goedde landed at Amdahl, the first company to clone the mainframes of IBM.

While both of his former start-ups actually preceded the incorporation of similar technologies for the Web, Goedde sees technology reining in for a time, focusing on the actual cost savings that made such technology seem so attractive in the first place.

“The evaporation of $3 trillion to $4 trillion invested in the public markets, now that’s going to hit the investors big time. That’s going to change people’s expectations radically.

Will companies continue to spend on B2B solutions? Certainly. We’re attempting to build solutions for the next generation, so as always, it’s a question of survival. Finding the right partners and securing the right investors just got a lot harder.”