Arkansas' 3E Software Picked for Accelerator

by Sarah Campbell-Miller  on Monday, Feb. 11, 2019 12:00 am   3 min read

Joe Ehrhardt

3E Software Inc. of Springdale is one of 10 companies, and the only one from Arkansas, chosen to participate in the inaugural ICBA ThinkTECH Accelerator, sponsored by Independent Community Bankers of America and hosted by the nonprofit Venture Center of Little Rock.

Each company will receive a $75,000 investment from the ICBA, along with mentoring and training from ICBA’s and the Venture Center’s network of mentors. Participants will also meet with representatives from thousands of community banks.

The accelerator kicked off last month and will end with the companies pitching their products or services at ICBA LIVE in Nashville, Tennessee, on March 18 and at the Venture Center on March 27.

3E Software will be pitching a product it has been selling for years: Teslar, a software-as-a-service product.

“We tell people all the time, they say, ‘In one sentence, what do you do?’ We say, ‘We create highly efficient banks,’” CEO Joe Ehrhardt told Arkansas Business. He founded the company 10 years ago but said it was just a typical software firm working for Walmart vendors for the first few years, before it started selling Teslar.

“Teslar is like a toolbox. We tell people there’s lots of tools. There’s a hammer, screwdriver. And no single tool is going to give you amazing efficiency,” he explained. “But if you do it across the whole industry, your entire bank — and Teslar has lots of modules — then you see a lot of efficiency gains.”

For example, Ehrhardt said, lenders can access Teslar and “see everything they need to do for the day. ... Everything that a lender does, outside of meeting that customer day-to-day, is what Teslar is trying to do in one system. So it’s one platform to bring together what’s normally five platforms, 10 platforms, to one place.”

The product’s aim is to help people complete tasks in hours instead of days, he said.

3E Software’s smallest client right now is a bank that has just $75 million in assets. Its biggest clients are banks with almost $20 billion in assets, Ehrhardt said.

But that niche it serves, community and regional banks, accounts for most of the industry — all but the approximately 50 very large national banks, like Bank of America and Wells Fargo — Ehrhardt said.

He said the company began as a “bootstraps” setup, but decided to raise $1.4 million in capital about a year and a half ago. Before that, it had always been profitable. 3E Software returned to profitability this year.

“That’s our goal, to stay that way. But you never know. As you grow, maybe you’ve got to get more capital,” Ehrhardt said. “There’s always that fine line between bootstrapping and doing it yourself … or going out and finding external sources.”

3E Software chose to raise capital then because, Ehrhardt said, “the old thought is, if you can double [revenue] every year … that’s great. But if you start with a penny, it’s going to take you a lot of years to double. And technology’s changing so fast that by the time you get to that critical mass, you might be outdated.”

He declined to disclose the company’s financials, but said 3E Software’s goal this year is to increase revenue by 150 percent. Ehrhardt said the company is on track to do that.

The company has about 18 employees now and is working to hire a staff of 40 by the end of the year.

Ehrhardt, who has 20 years of experience in banking, said he’s looking for talent with banking experience because it’s easier to teach people the technology than it is to teach them the industry. But finding qualified software engineers and programmers in a tight labor market where wages are up and where they have to be lured from larger companies, like Walmart, has been a challenge, he said.

Ehrhardt hopes the new accelerator will help 3E Software overcome other challenges it faces. He said the company needs help understanding public relations, marketing, the mindsets of current and potential clients and perspectives from outside Arkansas so that it can grow as it wants to.

Unlike other startup founders, Ehrhardt is not looking for an exit. He’s not looking to sell the company once it’s big enough. “Our objective, in my opinion, is to build a world-class tech company here in northwest Arkansas that helps financial institutions across the country,” he said, and the accelerator is one way to do that.

(Correction: A previous version of this article stated that 3E had worked for retailers like Walmart. It previously worked for Walmart vendors. We have corrected the error.)

 

 

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