Michigan Web firm rides torrent of growth

Liquid Web is one of mid-Michigan's biggest success stories. Launched in 1997, the managed Web-hosting company serves more than 20,000 clients in 120 countries. In 2009, it opened a 90,000-square-foot data center in Delta Township just west of Lansing.

Liquid Web has expanded from 19 employees in 2005 to about 150 in 2009 to nearly 300 today, creating the kind of high-skilled jobs Michigan needs for a return to prosperity.  Last month, it was listed as one of INC. Magazine's fastest-growing companies for the fifth straight year. Gov. Rick Snyder highlighted its success in his State of the State address last winter.

Bridge Magazine's Chris Andrews sat down recently with company founder and CEO Matt Hill to talk about his company's growth and prospects for Michigan.

Bridge: Why did you start Liquid Web in Michigan?

A: I'm actually a Michigan native. I grew up just south of Lansing in Holt. I started Liquid Web when I was 16. I already had a few employees by the time I was done with high school.

Bridge: Where did you go to college?

A: I didn't go to college. I was self-taught, largely the Internet, ironically. I was just always really driven. Liquid Web was my third company. While I was in high school, I had Tim Burton Studios, as well as a couple of major record labels. It was a different Internet back then.

Bridge: We hear all the time about the gap between the workers that tech companies need and the people coming out of Michigan schools. How difficult is it to find Michigan workers with the skills Liquid Web needs?

A: It really depends on the position. On the system administrator and system engineering roles, more of the first lines, we find people pretty easily inMichigan. Part of that, unfortunately, is because there is huge competition for employment. We do have a bit more limited success in positions that require years of experience.  

For the huge majority of positions, Michigan has been a great state to operate. We pull people out of (Michigan State University), (Lansing Community College), mostly, as well as out of (the University of Michigan). We hire based on what people know, not necessarily based on what their training is. LCC has actually done a number of things to cater programs to us. They have been a great partner, as has MSU.

Bridge: Do you have challenges recruiting workers from out of state?

A: The senior positions are higher-paying, and they require a lot of experience. We've had a lot of trouble getting people to relocate. They are mostly in California and the Southwest. The Midwest seems like this frozen place to them, quite honestly.

Bridge: What impact has the change in state business taxes had on your hiring plans?

A: It hasn't had any direct effect. We are still in a state of rapid expansion. Our focus is always based on what types of growth the market is going to bear for us, how fast we can grow. As far as altering our hiring plans due to tax conditions, we can't. If taxes go up, it challenges our model a little bit, because it becomes more expensive to operate. If taxes are lower, we will be leaner and more efficient and because of that we will be more successful. If we grow because we have advantages for whatever reasons, one of which could be advantages in the tax situation, then we become more competitive nationwide because our clients are national and global. That allows us to add people.

Bridge: Have the changes in Michigan's business tax structure made you more competitive?

A: I feel like a lot of things that are happening are moving my company into a more competitive position from where it might have gone if we had continued down the path we were on. We were getting hit pretty bad by some of the taxes that were in place.

Bridge: Have you other had other states try to recruit Liquid Web?

A: Pretty regularly. States and nations. Europe tries to do a lot of business stuff. We have been in talks with Ireland. As far as states it's been a handful, less than 10.

Bridge: Have you seriously considered moving?

A: Not based on them approaching us. A lot of that relates back to the fact that we are in a state of rapid expansion. We do have a Southwestern presence, but that's a necessity for geographic diversity. It has nothing to do with another state approaching us. It's just a requirement of a lot of our clients.

We plan currently to have Michigan remain our global headquarters and keep the bulk of our technical staff here, as well. We could have facilities in five more states; and as long as our call center and our core operations are here, almost all of the jobs will be here. You can build a huge facility, a 200,000-square-foot facility and have tens of thousands of servers in it, and run the whole thing with 10 to 15 people. That's very typical.

Bridge: What are your plans in terms of growth in Michigan?

A: As far as employment, it's going to continue to grow. We add a little below 10 people a month right now. If growth picked up, it might become 20.

Bridge: When friends and family visit Michigan, what is the one place you tell them they have to see?

A: Most of what people appreciate about Michigan is Up North; it's the beaches; the West Coast, more northerly and the beaches; and it's things like Mackinac Island. That's the unique aspect of the Michigan experience, as most people see it.

Bridge: What are your civic activities? Does Liquid Web encourage its executives and employees to be involved in public life?

A: We don't have a huge focus on that. The company itself does some things. We recently donated quite a few computers that weren't of use to us anymore to the Information Technology Empowerment Center to help underprivileged families. We are active in women in computing, which is an effort to get women more interested in computer science programs.

The best thing we can do to benefit the community is grow our employee base.  The more focused I am on business, the better for everyone. It's better to give somebody a job than anything else we do.

Bridge: How has state government helped you?

A: Michigan Works helped us hire in the neighborhood of 20 to 30 employees to work in the system administrator role. When we were having a hard time finding qualified candidates in the area and we really needed to grow quite rapidly, they were able to help us with the education aspect and get some federal dollars to help with the training.

Bridge: What advice do you have  to young entrepreneurs in Michigan?

A: The same advice as entrepreneurs from anywhere: Get started, and keep moving forward. That's how you reach any destination. Persistence is more important than absolutely anything else.