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WIRED–Web Wonders



AIMS 2000 may have an identity problem (its name is about to

be changed), but it has no trouble attracting business, with

a four-fold jump in its revenues during the past two years

Revenue at AIMS 2000 may be growing by leaps and bounds, but that isn’t helping to solve one of the company’s biggest problems: its name is rapidly becoming outdated.

Company President Mark Mosch thinks the name of the Web infrastructure company makes it sound as if it’s associated with Ames Financial Corp., which it isn’t. The other problem is that six months from now, it will be 2001.

“There’s some identity confusion, and what am I going to do in January?” said Mosch. “This is the biggest priority of my marketing director, to change the name, which will probably happen in the next couple of months.”

Located in the bowels of downtown amid the ongoing construction of the Alameda Corridor rail project, AIMS 2000 provides software, networking and Internet systems for a number of firms in and around Los Angeles.

The company recently completed a project for Higher Octave Music Inc., a new age label owned by Virgin Records America. In addition to revamping the firm’s Web page, AIMS linked it to the company’s existing accounting system, making it much easier for Higher Octave to keep track of products sold over its site.

“So many Internet companies, especially the ones doing Web site development, are unreliable,” said Sharon Wilson, Higher Octave’s vice president of marketing. “AIMS redesigned our site, incorporating some things we already had and enhanced our database and (e-commerce) search capabilities. We almost doubled our (online) orders switching from our shopping cart to theirs. The order rate was small to begin with, but even so, just by flipping a switch, orders doubled. It was something we hadn’t anticipated.”

Managing growth

It was the kind of project that highlights AIMS’s ability to redesign existing systems and make them compatible with the Internet.

“Our skills are in data integration within a Web site,” Mosch said. “We can go into a mixed environment with all sorts of different programs and develop a site that uses the existing system to the best advantage.”

In 1997, AIMS posted revenue of $600,000, and Mosch expects that figure to top $4.2 million this year. The company is one of Microsoft Corp.’s certified solution providers and has been consulted by the software giant about small-business applications.

Since December, AIMS has grown from a staff of 25 to more than 40, and raised $300,000 in mezzanine financing from angel investors to help add the staff needed to attract bigger clients.

AIMS is the result of a 1997 merger between two companies with roots in L.A.’s apparel industry that needed each other to better compete. One was Mr. Software, a company founded in 1984 by Scott Chaban that designed programs known as Apparel Information Manual Solutions, or AIMS, for apparel firms. The company had more than 1,000 clients.

The other was Global Computing Solutions, a small-business network services provider launched by Mosch and partner Shahin Kohan in 1996.

Global Computing started doing contract work with Mr. Software, but the two companies quickly realized the possibilities of expanding were greater if they merged, which happened in just a matter of months.

Rolling with the shakeout

The newly formed company continued to sell its software and networking services, moving into Web design in 1998 as clients realized they needed some kind of Internet presence. Developing e-commerce systems now accounts for 40 percent of AIMS’s revenue.

A number of nascent Internet companies have sought the firm’s services in recent years as they tried to take advantage of the flood of venture capital available in L.A. As payment, AIMS has taken equity positions of as much as 25 percent in some clients.

The recent drop-off in the valuations of public and private Internet companies means some of that equity isn’t going to be worth the sweat that AIMS put in. Mosch isn’t worried because AIMS doesn’t book equity positions as income from a given job. Still, if a client does have a spectacular initial public offering at some point, so much the better. “We look at it as a (potential) bonus,” Mosch said. “We don’t count it as revenue.”

Even so, the company has felt the impact of the recent tech shakeout. With money growing tighter, some startups have been less willing to spend lots of money up front for Web site design. Instead, they are more likely to allocate funds for upgrades over time as revenue comes in, Mosch said.

The company’s rapid addition of staff, combined with a slowdown in revenue, means that spending for the first half of the year will outstrip income, making the company unprofitable for the first time in its history. But given the amount of incoming business, AIMS expects to end up in the black by the end of the year.


AIMS 2000

Year Founded: 1997

Core Business: Web infrastructure design and service

Revenues in 1997: $600,000

Revenues in 1999: $2.4 million

Revenues in 2000 (projected): $4.2 million

Employees in 1997: 8

Employees in 2000: 40

Goal: To expand the size and scope of services to larger companies

Driving Force: Southern California’s Internet revolution and the

growing need for Web sites connected to other business systems

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