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|Sunday, November 22, 2009|
The goal, according to CEO David Childers, was to give clients yet another avenue to report internal wrongdoings within a company — harassment, theft, security breaches. If an employee were too timid to report, say, embezzlement in the real world, maybe their outgoing, aggressive alter ego in Second Life would take care of business.
“Maybe when they put on the mask of their avatar, they become much more bodacious . . . much more capable of exposing a fraud without fear,” says Childers, his native Oklahoman drawl coloring his adjectives.
Lack of interest at the time prevented testing the CEO’s surmise — “We were so far ahead of our time it was crazy,” he says — but this fall, a client actually called and wanted to know if employees’ Second Life avatars could report issues through the EthicsPoint system.
“Obviously we will be going back and putting more emphasis on that,” Childers says, happily validated.
Co-founded by Childers in 1999, EthicsPoint hit its initial stride by offering secure, web-based reporting systems and email communications at a time when telephone hotlines and snail mail ruled the day. The pace picked up after Sarbanes-Oxley in 2002. Angel investors graced the company with $4.1 million in 2003, and in 2005 EthicsPoint recast its application to accept data from a much broader range of sources.
“We found that people weren’t capturing and documenting those things that came in over the transom as well as they were the stuff on the hotline,” Childers says, noting that hotline reports only accounted for 7% to 10% of the issues present in an organization. “If you could get it all together though … you could get a much better feel for the actual risks and issues that are occurring in your enterprise.”
Turns out that EthicsPoint was on the right track — and then some. Revenue kicked up from $3.6 million in 2005 to $12.9 million in 2008; Childers expects to see $17.5 million this year and more than $20 million — and profitability — in 2010. Numbers like that are right in line with the company’s goal of 25% to 30% annual growth and have somewhat altered EthicsPoint’s take on being acquired.
“We always believed that we would have been prey in a rollup or an acquisition strategy,” says Childers, noting that EthicsPoint has been approached several times. “Today, looking around, we’re open-minded to an acquisition on our own and leading a rollup to be able to inorganically make the company bigger.”
But, he adds, the business would always consider any offer that proved to be the right fit at the right price and the right time.
With 130 employees in the Portland metro region, EthicsPoint now serves 2,300 clients around the world, including 161 global Fortune 500 businesses with names such as Siemens and Coca-Cola. It works in more than 20 different sectors, with banking, finance, education and health care providing the most clients.
EthicsPoint also prides itself on retaining more than 90% of its recurring revenue every year. This year, it’s 98%. Even so, that’s where the company has had to focus even more because in the soured economy, prospects that might see the value of EthicsPoint’s application simply don’t have the budget for anything new.
“We’re using this time to really talk with our existing clients more,” says Childers, citing as one example the twofold increase in regional user groups hosted by EthicsPoint this year.
Childers, a 55-year-old graduate of Oral Roberts University and the former CEO of Oregon Scientific, says EthicsPoint has also been cultivating increased European business, making application tweaks where needed to address specific “points of pain” for clients, and closely watching two emerging realms ripe for its solutions: social media and sustainability.
Already, EthicsPoint is using software to monitor company names and fraud-related words as they appear on social media sites like Twitter and Facebook. And with sustainability, Childers says all of the money around carbon credits and other green initiatives is an open invitation for malfeasance.
“Follow the money,” he says. “If there’s going to be money there, there’s going to be an opportunity for someone to manipulate that.”
Friday, February 27, 2015
BY OB STAFF
Oregon Business held its 22nd annual 100 Best Companies to Work For in Oregon celebration Thursday night in the Oregon Convention Center.
Friday, February 20, 2015
BY AMY MILSHTEIN | OB CONTRIBUTOR
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Friday, January 30, 2015
BY JACOB PALMER | OB DIGITAL NEWS EDITOR
For those who were working, here are a few highlights of Charlie Hales' State of the City address.
Monday, January 26, 2015
BY LINDA BAKER
The 2014 Bend Venture Conference set a record for the most cash, investments and prizes awarded at an angel conference in the Pacific Northwest. Investments in the six winning companies exceeded $1 million. The 11th annual conference was hosted by Economic Development of Central Oregon.
Thursday, January 08, 2015
BY CAMBIA HEALTH SOLUTIONS & OREGON BUSINESS COUNCIL | OP-ED
Businesses have a significant stake in the health of Oregonians. In fact, we cannot succeed without it. By committing to using our companies as levers for good health, we invest in our people, our business, our quality of life and our economy.
Thursday, February 05, 2015
BY JACOB PALMER | OB DIGITAL NEWS EDITOR
We ask chiefs of staff for the scoop on Oregon legislators.
Monday, February 23, 2015
Yeah, we know: Oregonians are way too cool for umbrellas. But today’s stylish, high-tech models will soften the resistance of the most rain hardened.
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