Vision of cutting costs inspires software developer

BOULDER – In the mid-1990s Charlie Stirk was doing what plenty of graduate students did – he used his studies to jump-start a company to commercialize the technology he was working on.

But Stirk’s startup, CostVision Inc., was so successful that he never got around to writing his doctoral dissertation.

Stirk’s graduate work with costing analysis turned into software products that allow manufacturing companies to more accurately estimate the final costs of new products while they are still in the design phase. Most cost estimating is done with spreadsheets, and the estimates produced this way are notoriously “guesstimates.”

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In the early days CostVision received a big chunk of funding through the Defense Advance Research Projects Agency, when Stirk was called in to analyze the future costs of a proposed manufacturing project.

“We were brought in as the costing experts on a big team. DARPA was developing new optical interconnect technologies, and we were helping to cost the new technologies and systems,” he said.

The young company was brought under the wing of the Boulder Technology Incubator, now known as CTEK, where it got a home in the incubator’s then-headquarters at the University of Colorado’s Marine Street Science Center, and business training and business development experience. It also earned the respect, trust and $750,000 in funding from a number of area angel investors.

CostVision has another angel round brewing, Stirk said. He’s looking for a minimum of $200,000, but the round is open and “we’ll take more,” he said.

CostVision’s “graduation” from CTEK coincided with CTEK’s move to its new location on Walnut Avenue. But CostVision was able to keep its 200-square-foot office on Marine Street because of its close research relationship with CU – Chief Scientist Phillip Ostwald is a professor in the mechanical engineering department.

CostVision’s flagship product is Cost2Target, software that estimates product manufacturing cost and assists with equipment and material purchase decisions. Cost2Target allows engineers to optimize product designs and production processes to reduce manufacturing cost. The software manages product cost throughout all stages of the product development chain.

According to management consulting firm McKinsey & Co., focused, cross-functional cost reduction efforts lead to 8 percent to 18 percent product cost reductions.

But those cost reduction efforts have to begin early in the design phase. According to DARPA, product design decisions made in the early development phases determine more than 80 percent of a product’s final cost. Early trade-offs of alternative designs and processes during this critical window have the greatest opportunity to reduce final product cost.

CostVision also will customize software for customers. Another source of revenue includes cost-consulting services. Typical costing clients aren’t sure they need the software but want costing reports. “We find a lot of companies that do that to try it out” before they buy, Stirk said.

In order to increase visibility in the marketplace, CostVision works with advisers that use and evaluate the product. Boeing and IBM Microelectronics recently joined CostVision’s advisory board.

“They work with us on what the software features they want to see in it and how to deploy it through the organization,” Stirk said.

CostVision has four employees in Colorado, with Stirk at the helm as president. The company also has a software development and testing facility in Beijing, China. The company’s first developer was from Beijing, Stirk explained, “so we hired some of his colleagues.” It’s a cost savings, but more important, Stirk said, is the 24-hour development clock. “We can have requirements at the end of the day, send it off to China for testing overnight and look at it the next day,” he said.

The company is ready for its next growth spurt, Stirk said. It’s verging on profitability and working on partnership deals with software and data vendors. And it’s hiring.

“We’re looking for salespeople who can help sell our software and consultants both in-house and external who can help on consulting engagements, implementations and analysis,” Stirk said.

As the brains behind the outfit, technology whiz Stirk recognizes his management limitations and is looking for his replacement. Then maybe he’ll be able to write that dissertation after all.