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The Honolulu Advertiser
Posted on: Thursday, July 5, 2001

Tiny Kailua firm finds success online

By John Duchemin
Advertiser Staff Writer

A two-person Internet company in Kailua has become a role model for start-up Hawai'i technology outfits — and for anyone who ever wanted to run a business from the living room.

Beth Carvin and Bruce Daly run a promising Internet business called Nobscot from their Kailua home. The company provides online exit interviews for firms such as the 10,000-employee First Tennessee Bank.

Deborah Booker • The Honolulu Advertiser

Nobscot Corp., a developer of online human resources tools, has landed contracts not only with some of the state's largest employers, but also with one of the nation's largest regional banks, the 10,000-employee First Tennessee Bank.

These contracts to provide online exit interviews are worth several thousand dollars per month to Nobscot founders Beth Carvin and Bruce Daly, who started the business in April and still run it on a slender shoestring from their home near the beach.

Nobscot's revenues have increased to the point that the pair plan to hire about 10 sales people to drum up more business on the Mainland. Their target: any company with 3,000 or more employees.

Nobscot's software offers an easy way for big companies to keep an eye on employee issues and monitor management, said Carvin, who dreamed up the idea and serves as Nobscot's resident human resources expert, sales force and dealmaker.

Customers, including First Hawaiian Bank and new convert Bank of Hawaii, use the Nobscot Web site to give confidential exit surveys to departing employees. These interviews go into an online database, which the client can use to spot potential patterns — and fix problems that may cause other employees to jump ship.

Such surveys are great tools for reducing costly work-force turnover, but they're often underused by big companies, which can have a tough time keeping track of personal issues — domineering middle managers, dysfunctional subdepartments — that can drive away talented employees, experts say.

"It's always good to hear why people are really leaving," said Gaylynne K. Sakuda, human resources director for the 500-employee Kahala Mandarin Oriental. "But the larger your company gets, the more difficulty you can have trying to track things, and there's more need for computerization."

Computerized exit interview tools, however, are scant. Big companies have to either invent their own software, or outsource exit interviews to consulting firms like Gallup.

Enter Carvin. The 38-year-old, a former human resources officer at First Hawaiian, had long dreamed of starting a viable Web company, and was convinced she had discovered an Internet niche.

So last summer she persuaded Daly, her 40-year-old companion from college days at the University of Massachusetts in Amherst, to quit his job as a programmer for Hewlett-Packard's Hawai'i operations and concentrate on Nobscot.

While Daly refined the software, Carvin tried to drum up interest. Among the general technology community, enthusiasm ranged from scant to nil.

"We'd talk to venture capitalists, but they wouldn't get it — their eyes would glaze over," she said.

Human resource departments, however, were a different story. Carvin managed to sign up First Hawaiian, her former employer, and Liberty House as free-trial clients.

Encouraged by the initial success, Carvin started calling human resources departments at medium-sized companies across the United States. In June the strategy paid off as First Tennessee became Nobscot's largest client.

Now that they have several reputable customers, Carvin and Daly hope Nobscot's business will start to snowball. They have rented server space in an Atlanta data center, have a patent pending on the software and have signed up an Oregon human resources consulting firm to resell their products.

Carvin said Nobscot has received inquiries from many employers with 20,000 to 50,000 employees. And they are in serious negotiations — to the point of discussing pricing plans — with one American manufacturer with more than 100,000 employees.

Since Nobscot bills on a per-employee scale, that would be an enormous coup for Carvin and Daly, whose operating expenses to date have largely consisted of the lost salaries from their former jobs.

Carvin and Daly see the Mainland as their main market. Other than its initial customer base and its business address, Nobscot bears few ties to Hawai'i. The company is incorporated in Delaware, and its name derives from a community in suburban Massachusetts.

Still, the company's founders see no reason to leave. They enjoy the lifestyle perks of Windward Oahu, and are working with the University of Hawai'i to adapt the Nobscot survey software for student surveys and class evaluations.

And they have not had problems doing business from Hawai'i — a concern of some local software developers.

"We talked about that aspect, but we see no reason not to stay," Carvin said.