South African Startup Sets Up Shop in Durham
Why Device Magic chose Durham, and not Dallas, as its U.S. hub
BY LAURA BAVERMAN
Filed Under: NEWS: Startups
The Triangle's best recruiters are its entrepreneurs—the people who choose to build their companies within its bounds despite the lure of better talent, more money or a bigger community elsewhere.
A fancy marketing campaign is just never as effective as good old-fashioned word-of-mouth.
That's why the story behind Device Magic's new office in Durham is so compelling. The Johannesburg company's founders, high school friends Dusan Babich and Mike Welham, knew they needed a headquarters in the U.S.—they offered a mobile technology for field teams and had a potential client list of HVAC, plumbing and other service companies, educators and nonprofits, building inspectors and delivery companies.
In South Africa, the men raised money in the mid-2000s for a developer runtime technology for Nokia and Symbian-powered smartphones. When the iPhone came out and eroded the marketshare of Microsoft and Nokia, they shut down and pursued consulting work. Consulting led to building applications that replaced paper processes, and that led to the creation of Device Magic in 2010.
The perfect use case for today's tool, which operates on any smartphone, is for a worker who has to collect information or operate remotely. It's easy to record information, scan barcodes, take photos or record video through the app. Biggest name customers prior to opening up shop in Durham include LEGO and Google in Europe, which used the tool at marketing events.
Soon after the launch, the pair decided that the U.S. market would be key to their growth as a software-as-a-service company. For help with customer development here, they applied to a handful of accelerator programs and in 2011 joined the TechStars-affiliated Tech Wildcatters accelerator in Dallas. With its plethora of Fortune 100 companies and B2B expertise, they figured Dallas was as good a place as any outside the expensive and competitive Valley to start up.
But Dallas's startups were young and Babich says it lacked the plenty of resources and capital he'd hoped for.
A chance meeting with Shoeboxed CEO Taylor Mingos at a Small Business Web event in San Francisco that year clued Babich into the startup community in Durham.
"Taylor said, 'You have to come to Durham,'" Babich recalls.
Two years later, after setting up shop and launching the business back in Johannesburg, he finally made a visit. And Mingos pulled out all the stops. He introduced the team to the folks at Adzerk and ReverbNation, Sharefile and Bronto. Babich learned that North Carolina had a high immigration rate from South Africa. And he liked the East Coast time zone—it was a bit more convenient for his team in Africa.
"He did quite a good job selling me on the area," Babich says. "It's less distracting than in New York or the Valley and more focused on building profitable scalable businesses. A nice time zone, nice climate and the people have gone out of their way to be helpful and hospitable."
Then, Eric Boggs at RevBoss agreed to help by handling outbound sales, lead generation and getting customers on board quick and timely. He also offered to share an office at American Underground @Main.
Since the office opened in February, Device Magic has hired a small team to service new customers. It is now servicing clients like the admissions department at the University of North Carolina at Asheville. UCLA and the construction and engineering firm URS Corp. are also U.S. customers, along with dozens of building and HVAC contractors.
Though they'll keep a South African development shop, Babich and Welham plan to move here once they secure the appropriate visas.
"Whatever growth we're achieving, we expect to do even better when we're here," Babich says. "People want someone local they can speak to. This is where our products are really resonating."
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