Alteryx Billionaire Dean Stoecker, A Slow And Steady Approach

Dean Stoecker saw the possibilities for big data before most people figured out that the internet represented infinite potential for the savvy entrepreneur. In 1997, he co-founded a data science firm called Spatial Re-Engineering Consultants (SRC) and then patiently waited for the market-reality to catch up with his imagination.

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“We were building big-data analytic cloud solutions back in 1998,” Stoecker said in an interview. At that time, there wasn’t a strong demand for analytics services and Stoecker’s first customer was a mail-out marketing company that paid Alteryx $125,000 to help them better target their coupon offerings.

During that time, he focused on growing his startup into a lean, efficiently-run endeavor that was turning a profit from day one. He was careful to avoid most of the financial traps that many mid-90s internet companies fell into. “We didn’t spend ahead of revenue. We didn’t hire ahead of revenue,” he said. “We never calculated burn rates. That was a big topic in the whole dot-com era. We were not running the business like a dot-com.”

In 2006, Stoecker and the two other co-founders decided to move the company away from their consulting business base. As part of that pivot, SRC rolled out software that enabled customers to run their own data analysis. They rebranded the company Alteryx – a nerdy-joke play on words for changing two variables simultaneously: “Alter Y, X” – in 2010.

Business has been booming since then, he successfully raised $163 million in capital before taking the company public in 2017. Its stock price is up almost 900 percent and Stoecker, himself, is estimated to be worth approximately $1.2 billion. Also, the company produced $28 million in profits on $254 million in revenue in 2018. Even though business was slower to come than he first thought, Stoecker never doubted that it would happen

“People ask me, ‘Did you ever think it would get this big?’” he said. "And I say, ‘Yeah, I just never thought it would take this long.'"

Stoecker grew up in Boulder, Colorado as the youngest child in his family. His father was an inventor who spent part of his professional life building liquid nitrogen tanks for NASA. From there, his father decided to make a career change and started selling “pre-cut” vacation homes in Colorado.

“My father was an entrepreneur who built A-frame houses,” he remembered. “[W]e would see the life of the entrepreneur at the kitchen table – collecting money from customers, paying bills, and investing for the next stages of growth.”

Stoecker worked with his father as a teenager and was able to finance his college degree with earnings he had made in high school. He received a bachelor in economics from the University of Colorado Boulder in 1979, then went on to obtain his MBA from Pepperdine.
His first real exposure to the data industry came with his sales job at Connecticut-based Donnelly Marketing Information Services. While there, he began to understand how challenging it was to build a profitable business while utilizing publicly-available data. "Companies tried to be good at three core competencies – data, software, and analytics. I realized to be successful you needed to own one of those,” he said in a 2018 interview.

After seven years with Donnelly, Stoecker realized it was time for a change. “I told my wife I am either going to buy a business or get a pink slip. At 3:30 in the afternoon I called my wife and said I had gotten the pink slip. With three partners in 1997, we decided to focus on analytics."

Stoecker had seed money that a customer had given them back in 1998 but he never touched it. For the next fourteen years, he and his partners bootstrapped the company through 20 to 25 percent annual growth, never lost money and always paid their bills. His biggest failure, he says, is that he waited until he was 40 to start a business.

Even though Stoecker is coming up on 62nd birthday, he shows no interest in slowing down. When he looks at 22 years of business displayed as a timeline across an Alteryx office wall, he reflects on those first two decades. “The good stuff hasn’t even occurred yet,” he said. “I’m going to need a bigger wall.”