Brothers' Software Discovery Transforms Television and Radio Commercial World
Luke Stephens had a degree in computer information systems from UCM and a great new job. His younger brother, John, was attending UCM, earning the same degree with the assistance of a full-ride scholarship. Then, they came up with a better idea — a software solution that revolutionized the broadcasting industry — and things began to change.
Company Purchased for $32 Million
Along with partners Ed Adams and Michael Margraf, the Stephens brothers formed Optimal Solutions, Inc. The Lee's Summit, MO, software firm provides real-time tracking of traffic and continuity for radio and television. Their first sale in 1997 to a fledgling Florida television network led to the purchase of their company this spring for $32 million.
Adams and Margraf were working with the broadcast industry in 1995, brokering advertising sales between broadcasting stations and advertising agencies. Over and over, they heard about the need to track the content of broadcast air time in real time instead of the delayed report summaries that then were available.
Luke Stephens was working with Anheuser Busch, Inc., when he was approached by Adams and Margraf. They believed he could complete the task of developing the software. It didn't take him long.
With equipment and an office set up in the basement of his St. Louis home, he developed software that would allow broadcasters to track air time in real time from multiple locations. The system allows salespeople to access and update the schedule, also in real time, providing a minute-by-minute schedule required by broadcasters.
By 1997, it was time to create a prototype, and Luke recruited his brother. With the help of Harry Poynter, who coordinates the Harmon College internship program, and Mustafa Kamal, chair of UCM's computer information systems department, John was approved for an internship while working on the project. The opportunity allowed the idea to bloom into a company with an unlimited future.
The big break came when Paxson Communications, located in West Palm Beach, FL, liked what they saw in the prototype and signed an 11-year contract.
"They took a chance on three guys and an unproven system," Luke said. "We only had a prototype, and they were opening eight brand new stations and launching a new network. They purchased our software, which was still in prototype, for the opening of the PAX television network." The time was August 1998.
With only that prototype in hand, work began in earnest on the development of the final product. Luke moved temporarily to West Palm Beach, working for several months in office space provided by Paxson. John soon followed, and the brothers set to work polishing their product.
First Customer was Paxson TV Network
The initial purchase by Paxson launched OSi's product, and sales followed to additional stations in both small and large markets. As word traveled through the broadcasting industry about the new product that made life easier for station management, the company began to grow.
A permanent location in Lee's Summit allowed OSi to continue to develop its products to meet customer demands. Competitors also began to take notice.
"We were cutting into the business of one of our major competitors," Luke said, "but many of our potential customers were signed to long-term contracts with the competition. Once those contracts began to expire, we began to add clients."
Bought by Harris Corporation
One competitor that noticed was Harris Corporation, a major provider of delivery solutions for existing and evolving broadcast markets. Harris eventually purchased one of OSi's major competitors and then began conversations with OSi about becoming part of its corporation.
Discussions continued, and OSi became part of the Harris family of companies. For some, it would have been an extremely successful conclusion to a 10-year career, but for the founders of OSi, it merely meant bigger and better opportunities. But the OSi founders wanted to be sure that acquisition by a larger corporation would not affect their formula for success.
"When the opportunity with Harris came along, we didn't want to disturb what we had going," Luke said. "OSi's traffic software will become the industry standard, and we will continue to add to our core products, but we also wanted to stay faithful to our core values when we became part of Harris."
They didn't need to worry. The CEO of Harris told them to continue what they had been doing. "He told us he liked our management model, and implied it would be applied to other software divisions."
OSi Still Growing
OSi's corporate offices in Lee's Summit occupy a large part of the second floor of a new office building. Due to recent growth of the company, OSi recently completed the renovation of more square footage they have leased adjacent to their current offices.
The office is quiet, with the more than 50 employees working at computer work stations. Most of the employees are young, and 10 are recent graduates of UCM's computer information systems program. Many were interns with OSi through the Harmon College's internship program, as were both the Stephens brothers.
OSi continues to seek the university's CIS interns, providing them with valuable experience in the business world. "It's a great opportunity for us to acquire new employees," John said. "We're products of the internship program, and we know its value. We know that UCM will provide us with the quality employees we're looking for."
Wants More CIS Graduates from UCM
Sundaresh Sathasivan, manager of development for OSi, hopes more Central Missouri CIS graduates will find a home at OSi. "We'd definitely like to have more employees from UCM," Sathasivan said. "The interns who have joined us have been very knowledgeable, and as employees, they have become critical to our success. The internship is a great opportunity for us to evaluate the potential of a possible employee, as well as for them to evaluate our organization."
As OSi continues to grow, the Stephens brothers stay focused on the values that allowed them to be successful. They don't take success for granted. "The broadcasting industry is changing rapidly, and the coming mandated shift to digital television will have an effect," Luke said. "The advertising dollar is shrinking, and it's up to us to stay current."
Professor Remembers Two Brothers
Kamal remembers the Stephens brothers. They were hard workers, he said, and he's not surprised at their success. "John came to me asking to be allowed to complete his internship with Luke, who needed his help to get the company started," Kamal said. "John didn't quite have the coursework needed for an internship, but I saw an opportunity to allow a student to begin on the ground floor with a new company and learn from scratch. It was the start of a relationship with OSi that remains beneficial today for our interns."
Kamal also uses OSi and the Stephens brothers as an example for students. "Two brothers had a dream, and they put it on paper," he said. "But they also worked hard. That's what I tell my students; if you work hard, the sky's the limit."
— Mike Greife '74