Getting Better Answers Faster: Providence Software Startup Dynadec Goes Way Beyond the Traveling Salesman Problem

6/15/09Follow @wroush

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do some optimization that could be used day-to-day, operationally, to address a different class of problems [in areas like] on-demand logistics, on-demand resource allocation. We did a lot of research to try to scale the technology and find the right techniques to address these problems with under the time constraints that people have.

What that research has been about, in the last seven years, has been finding new ways to deal with uncertainty, and changing optimization from long-term planning to making very quick, high-quality decisions. The work was funded by the NSF and the ONR for a long time, but it was not finding its way into a commercial product. I wanted to seize the opportunity, so I took it to the technology licensing office at Brown.

X: Were they helpful?

PVH: Yes, I think they have been very helpful. They took a couple of months and analyzed the technology, and they founded the company with me and invested the initial capital. So they were very helpful. They really said, “Okay, this looks like a great opportunity.”

X: I’m curious how you take a philosophy of optimization and build a viable product and a company around it.

PVH: That’s a good point. Let me answer in two stages. The first thing I would like to say is, optimization has been widely used, but I don’t think it’s reached its potential. You need, first, a good platform, a good tool, and the platform we have is that. But you also need a lot of expertise in how to use the platform for solving these problems, which are some of the most difficult problems in computer science. You typically have to explore a very large search space in an intelligent manner. So you need both the technology and the modeling expertise. We are not trying to sell technology. We’re trying to be a solutions company and develop sophisticated solutions for a variety of areas like resource allocation, so that people can develop applications faster and specialize them for their own companies.

X: Okay, well, there are companies that move things around in the real world like airlines and then there are companies that make software to help them manage that—ITA Software here in Cambridge would be an example. I can see how an optimization platform might be interesting to ITA, but how many big companies that are doing things on the ground even have the expertise to know that they have an “optimization” problem?

PVH: I think we see two different channels for our products. One is the one you just mentioned—companies like ITA. There are a couple of companies we are talking to that would benefit from integrating our solution into their technology. But you’d be surprised how many really major corporations in the U.S. have very limited optimization technology in place. We’re not talking to the IT departments, we’re talking to the operational people. They know what problems they have to get solved, and what they want is a solution to the problem they have right now. The airlines, for example, have been users of optimization for a long time, but it’s a limited form that is not very resistant to disruption; when something happens, they are not very good at reacting. That’s a great opportunity for us. Where things are dynamic and uncertain, that is where we want to focus and fill a need which is not filled.

X: So you’re going after some very big problems—but how do you narrow that down to an addressable market?

PVH: When I created the company, I knew I didn’t have the basic expertise to transform it into a successful business. I don’t have the skills. So that is what we have been trying to do first—build a management team that has the skills to find the market and make the right choices for the technology. And one of the first things we have been doing over the last three months has been to decide where we need to focus, where we know the technology is going to do best. Routing, scheduling, and workforce management are three areas that are very dynamic, typically operating under uncertainty, so we know that the technology matches very well with these areas.

The key right now is to try to focus the company and execute. We tell people that what we want to do is build a pilot system, and show you what we can do. And if you like that, we can engage in a long-term relationship. We can quickly demonstrate the value of the company to these partners, and then they can decide if it is useful to them. So we have pilot programs of four to six weeks where we take a piece of a problem and show them what we can do. It’s very convincing.

X: It sounds like, for now, you’re more of a services or consulting company than a software company.

PVH: At the first stage, we will engage customers in these three particular areas, and in the next stage, over the next two years, we will be focusing on developing the [Comet] application in response to their needs. Currently, we are engaging customers so we can get the input of the problems they have, but it’s mostly for refining and making sure that the applications that we will be showing in some years will be what the market wants. We want to be a software company, and the way to do that is to … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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